The standard VAT rate is 20%. It applies to domestic taxable supplies, intra-Community acquisitions of goods and importation of goods from non-EU countries.

A reduced rate of 7% applies only to accommodation provided by a hotelier as part of a tourist package tour.

The following exemptions are envisaged in the Bulgarian VAT Act:

• With credit (= 0% VAT rate) - including but not limited to: export supplies; international transport of goods and passengers; intra-community supplies of goods; sales of duty-free goods in duty-free shops, where such sale is considered export as per the Duty Free Trade Act; certain transactions related to international trade, and specific supplies under international treaties.
• Without credit – including but not limited to: transfer of land and limited property rights over land (excluding building land and attached land plots to new buildings), the rental of land and transfer of old buildings or parts thereof, the rental of buildings or parts thereof for residential purposes to individuals other than sole trader (an option to tax is available for these transactions); financial and insurance services; certain educational and cultural services; health services and some other specific supplies.

There are also specific exemptions from import VAT and VAT on Intra-community acquisitions of goods.

Certain supplies and services are subject to the reverse charge mechanism (i.e. the liability to pay tax is shifted to the customer which is VAT registered in the country), e.g. supply of licences, patents, know-how, intellectual property rights, advertising services, consultancy services, provision and processing of information; supply of real estate related services provided by consultants, architects, engineers, supervisors, intermediaries and brokers; supplies of goods with assembly/ installation, provided by an EU resident supplier without a fixed establishment in Bulgaria, etc.

The mandatory VAT registration threshold is BGN 50,000 of taxable supplies carried out in the last 12 months.

The threshold for registration based on intra-community acquisitions is BGN 20,000 in a calendar year.

The registration threshold for distance sales is BGN 70,000 for distance sales with place of supply in Bulgaria carried out during the current calendar year or in the preceding calendar year. A taxable person performing distance sales of goods may choose to register before reaching the above threshold.

Persons established in other EU Member States and supplying goods with assembly/installation to Bulgarian customers non-registered for VAT purposes in the country are obliged to register in Bulgaria irrespective of their taxable turnover.

Voluntary VAT registration is possible irrespective of the taxable turnover.

Foreign entities may register for VAT purposes in Bulgaria only through a fiscal representative (unless they have local branches in Bulgaria). The fiscal representatives are jointly liable for the VAT liabilities of the foreign company.

VAT is due monthly, by the 14th day of the following month.

VAT can be claimed in VAT returns and is recoverable within:

• 30 days for persons who have effected zero rated supplies, intra-community transport of goods (including services related thereto) and work on movable goods with a place of supply in another Member State within the last 12 months exceeding 30% of the total value of all taxable supplies they have made in the same period, as well as by large investors that meet certain conditions;
• 3 months (for offsets) and 45 days (for effective refund) – in all other cases.

Foreign entities with no legal presence in Bulgaria are entitled to VAT refund subject to the statutory conditions (under the Bulgarian and EU VAT refund regulations).

The physical movement of goods as a result of the so-called “dispatches” and “arrivals” should be reported for Intrastat purposes (i.e. movements and supplies of goods from/to the territory of Bulgaria, respectively to/from EU Member States).

The filing of Intrastat returns is obligatory only for persons that are VAT registered in Bulgaria and exceed the reporting thresholds for arrivals and dispatches (i.e. BGN 250 thousand for arrivals and BGN 400 thousand for dispatches)
The filing deadline is the 10th day of the month following the month in which the arrivals or dispatches occur.

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