VAT registration Bulgaria: complete guide

Bulgaria first introduced the Value Added Tax in 1994. Since 2007, as part of the European Union, it complies with the EU directives for VAT. 

The National Revenue Agency, otherwise known as the NRA, is the authority in charge of administering VAT taxes and regulating VAT registration in Bulgaria.

Companies trading in Bulgaria and supplying taxable goods or services must follow the Bulgarian legislation and, as in other EU countries, this includes the responsibility to proceed with VAT registration in Bulgaria, and complete regular VAT returns and reports. 

Your accountant can help your company with VAT registration in Bulgaria, as well as with other tax reports. A new or established company needs to count on the services of a reliable accounting company that can take care of their accounting needs, tax reports, and bookkeeping.

We can only recommend Accountancy Bulgaria, a reliable and trustworthy accounting company with years of experience, and experts that can deal with the specific accounting needs of your company and tailor personalized solutions to, ultimately, allow you to focus on your business’ growth. 

How much is VAT in Bulgaria?

The VAT rate in Bulgaria is 20% and most products and services are liable to VAT, meaning that legal entities and taxable individuals, like freelancers, must register for tax with the appropriate authorities.

For certain products and services, the VAT tax may be exempt or it may be a reduced rate.

Reduce VAT rate (9%):

·       Hotel accommodation and touristic establishments

VAT rate 0%:

·       International transport of goods 

·       International transport of passengers or supplies

·       Duty-free goods

Exempt of VAT:

·       health care;

·       social security and welfare;

·       certain supplies related to culture or religion;

·       necessary supplies related to land and buildings;

·       gambling;

·       postage services.

Read also: Accountancy Bulgaria: your trusted tax advisor in Bulgaria

How and when to do VAT registration in Bulgaria

VAT registration in Bulgaria is required for all Bulgarian companies and freelancers who sell VAT taxable products or offer services subject to VAT in this country, as long as they reach in a fiscal year the 100,000 BGN limit (which is approximately 51,000 euros). 

VAT registration in Bulgaria is voluntary for any companies or taxable individuals that record sales under the threshold limit. 

The Bulgarian legislation regulates the circumstances under which VAT registration in Bulgaria is required for foreign businesses if they are operating in Bulgaria without starting a company in Bulgaria. It includes the following cases:

·       When bringing goods into Bulgaria;

·       When storing products in a warehouse in Bulgaria for resale for more than three months;

·       When distance selling to private individuals in Bulgaria (for example, online);

·       When selling items from Bulgaria to other EU countries in a year.

VAT registration Bulgaria for freelancers

Depending on the business model (B2B or B2C), VAT registration in Bulgaria has to be done differently. Your accountant can help you with this process, and if still unsure if an accounting company is a good option for your business, look no further, opt for a free consultation with Accountancy Bulgaria, and start designing the strategies that will help your business succeed.

We mentioned different business models, B2B means business to business, while B2C means business to customer.

In the case of B2B freelance businesses providing services to companies in the EU, VAT registration in Bulgaria is compulsory before providing the services. 

In the case of B2C businesses providing services directly to customers outside the EU, mandatory VAT registration in Bulgaria has to happen after reaching the threshold of 100,000 BGN (for 2024), and 166,000 BGN (from 1st Jan 2025).

Another option is B2C businesses offering services to customers within the EU. In this case, VAT registration in Bulgaria must happen after reaching the threshold of 10,000 EUR for the past 12 months. It is important to mention that in this case, the VAT tax rate corresponds to the percentage of VAT from the country of residence of the client (which in Germany is 19%, in Ireland 22%, etc).

Read also: Tax agent in Bulgaria: why you do need one before doing business in the country

Conclusion

VAT registration in Bulgaria varies depending on the business model, as well as where the customer receiving the goods or services is located. 

Accountancy Bulgaria can help with VAT registration in Bulgaria, keeping up records, and presenting the required documentation to the NRA. They are best equipped to assess your and offer tax advice that can prove fundamental to the success and growth of your business.