Tax rates
Standard rate: 20%
reduced rate 9%
the accommodation provided in hotels, shelters in places of accommodation or chalets; books; baby food and hygiene materials.
Zero rate: Export of goods
Supply of goods within the European Community International transport services, and related services
Supplies of gold (except for gold as an investment) to central banks of EU member states
Certain transactions in connection with international trade, and certain supplies under international agreements
Sales of duty-free goods in duty-free shops, where sales are exports for the purposes of customs legislation.
Supply of goods
Supplies of goods and withdrawal for private use (self-supply) are taxable, as far as there are no exceptions
Place of supply of goods
in principle, wherever the object is situated at the time the power to dispose of the goods is acquired (static supply)
in the case of transport or dispatch by purchaser or supplier, where transport or dispatch begins (moving supply)
Import from third countries: if supplier is liable for import VAT, in importing country
Delivery by water, air or rail inside the EU: point of departure
Special provisions for chain and triangular transactions
Supply of services
Supply of services and private use / supply of services without consideration (self-supply) are taxable, as far as there are no exceptions
Place of supply of services
A differentiation is made between services rendered
- to taxable persons (“Business to Business”, “B2B”) or
- to non-taxable persons (“Business to Customer”, “B2C”).
For purposes of determining the place of the supply of services,
- taxable persons (within the EU holding a VAT registration number) and
- non-taxable legal entities holding a VAT registration number will be considered as “taxable persons”
Basic rule
| B2B |
B2C |
| Place of recipient (The place where the recipient of services has established his business) |
Place of supplier (The place where the supplier of services has established his business) |
Special cases
|
B2B |
B2C |
| Supplies of services by intermediaries |
Place of recipient (basic rule) |
Place of the underlying transaction |
| Property services |
Place of the property |
Place of the property |
| Cultural, artistic, scientific, educational, sports, entertainment or similar services, like services in connection with fairs and exhibitions including services of the respective organizers |
Place of recipient (basic rule) |
Where the services are physically carried out |
|
Admission and other related services for events like
fairs and exhibitions
|
Place of the event
(no Reverse Charge System for admission
etc.)
|
Where the services are physically carried out |
| Passenger transport |
Distances covered |
Distances covered |
| Transportation of goods (without intra-Community goods transportation) |
Place of recipient (basic rule) |
Distances covered |
| Intra-community goods transportation |
Place of recipient (basic rule) |
Place of departure |
| Ancillary transport services |
Place of recipient (basic rule) |
Where the services are physically carried out |
| Appraisal and processing of movable tangible objects |
Place of recipient (basic rule) |
Where the services are physically carried out |
| Restaurant and catering services |
Where the services are physically carried out |
Where the services are physically carried out |
| Restaurant and catering services in connection with intra-community passenger transport |
Place of departure |
Place of departure |
| Renting of means of transport for up to 30 days |
Where the means of transport is actually put at the disposal of the customer |
Where the means of transport is actually put at the disposal of the customer |
| Renting of means of transport for over 30 days |
Place of recipient (basic rule) |
Place of recipient
Special regulations for renting pleasure boats
|
| “Listed services” to third country customers |
|
Place of recipient |
| “Listed services” to customers in the EU |
|
Place of supplier (basic rule) |
| Electronically supplied services, such as telecom, radio and TV services 2) |
Place of recipient (basic rule) |
Place of recipient 3) as of January 1, 2019: place of supplier in case the total revenue does not exceed the amount of EUR 10,000 4)
|
Mini-One-Stop-Shop (MOSS) / One-Stop-Shop (OSS)
Currently taxable persons from an EU member state or third country – who provide electronically supplied services, telecom, radio and TV services to consumers within the EU – can, subject to certain conditions, make use of simplifications within the MOSS system. The taxable person will thereby only be registered for VAT purposes in the member state where the headquarters of the economic activity and/or the permanent establishment are located.
As of July 1, 2021 a registration in the country of destination is not required anymore for the following services, because sales can be declared in one member state of the EU via the One-Stop-Shop (OSS) and VAT can be payed in a centralized way:
- B2C services
- Supplies to consumers: turnover threshold is eliminated (exception for micro-businesses).
- Import: Tax exemption for imports from goods with value < EUR 22 is eliminated; Import One-Stop-Shop (IOSS) is applicable for imports to consumers for goods with value < EUR 150
- Platforms: certain platforms are treated as if they delivered the goods by themselves (notional delivery); platform may become a tax debtor
Reverse charge (reversal of tax liability)
Generally for all transnational supplies of services and work supplies; exceptions: entry tickets and toll
Requirements
Supplier is a foreigner (no residence, no place of business or permanent establishment in Bulgaria involved in providing the service).
Customer is an entrepreneur
(even with non-taxable activities) or tax-exempt legal entity holding a VAT identification number, or a legal entity under public law
Consequences
Invoice without VAT, indication that tax liability is transferred to the customer, both parties’ VAT registration numbers
Customer owes the VAT Supplier is liable for VAT
Application also
apply to areas susceptible to fraud (sale of scrap, sales of industrial crops, etc.)
Tax reliefs
Exemption (Input VAT deductible even though no VAT chargeable on supply of goods and services)
- Exports
- Intra-Community supplies
- Sales revenues for sea and air transport
- Processing under contract on goods for export
- Cross-border transport of goods
- Cross-border sea and air transport of passengers
- Mediation of above services
- Renting to diplomats
Zero rates (“non-genuine” tax exemption) (Input VAT is not deductible)
- Banking, insurance services
- Certain financial services
- Education and training services
- Betting
- Health care services
- Supply of undeveloped land not scheduled for development
Deductible input VAT
VAT invoiced to the business for the supply of goods and services
In general no deduction of input VAT in respect of
- expenses not deductible for the purposes of the business (e.g. expenses related to private use of company assets)
Reimbursement:
Effective in 30 days of the date of filing of the VAT return, following a 3 months set-off procedure, except in cases of initiated tax audit.
Input VAT correction
In case of fixed assets (resp. major repairs): If the circumstances which have been relevant for the input VAT deduction change subsequently, a corresponding positive or negative input VAT correction must be made.
As a general rule, the observation period for input VAT correction is 5 years. The observation period for input VAT correction related to properties is generally 20 years.
Real estate
Rentals
Generally liable to VAT (exception for non-taxable persons when used for residential purposes)
Sales
Liable to VAT: newly constructed buildings. Exception applicable for old buildings. Sale of non-developed land is exempt; seller may opt for liability to tax at 20%
Refund of input VAT for Bulgarian taxable persons within the EU
Electronic application (via portal.nra.bg) has to be made by the Bulgarian taxable person at its competent Bulgarian tax office at the latest by
September 30 of the following year. Separate applications are required for each member state.
Filing of original invoices is only necessary if required by fiscal authorities of the respective member state.
Minimum amount of refundable input VAT: EUR 400 (EUR 50 if the refund period coincides with the calendar year)
Foreign taxable persons
Taxable persons with no place of business or permanent establishment in Bulgaria
Registration
Obligation to register if taxable supplies of goods or services with place of performance in Bulgaria are made, regardless of threshold applicable for local taxable persons and in case no reverse-charge is applicable for these supplies.
Refund of input VAT for taxable persons domiciled in the EU
If no sales are made in Bulgaria, electronic application at the competent tax office in the EU member state (originating country) of the taxable person within the EU by September 30 of the following year at the latest
Refund of input VAT for taxable persons not domiciled in the EU
If no sales are made in Bulgaria, refund has to be applied for by June 30 of the following year at the latest
Official form, original invoices to be submitted. Minimum input VAT refundable: EUR 400 (EUR 50 if the refund period coincides with the calendar year). The procedure is applicable for short list of third countries.
