Anyone interested in opening a company in Bulgaria as a step forward in growing and developing their business needs to look into getting a VAT number in Bulgaria.
It is an obligation for Bulgarian companies to apply for VAT registration before the start of their business activities. Foreign companies operating within the limits of Bulgaria also need to obtain a VAT number. European-based companies do not need an appointed fiscal representative, a requirement that is compulsory for non-EU companies.
For those thinking of company registration in Bulgaria and registering for a VAT number, it is a must to count on the services of an experienced accounting company like Accountancy Bulgaria. Not only do they have years of experience helping companies grow to their maximum potential, but they will be able to offer advice and tailored solutions to your business needs.
For further info, book a free consultation through the website https://accountancybulgaria.com/.
Table of Contents
Who needs a VAT number in Bulgaria?
- Local companies offering VAT-taxable goods and services,
- Foreign companies offering VAT-taxable goods and services in Bulgaria,
- Natural persons involved in VAT-taxable commercial transactions of goods/services in the EU.
All companies and tax-liable persons that sell taxable products or services in the country and reach an annual limit of 100,000 BGN (about 50 thousand euros) must register for a VAT number. Companies or taxable individuals that produce a lesser amount can register for VAT if they prefer, as it is optional.
It’s highly recommended to have an accountant in Bulgaria, to take care of the general bookkeeping of your company or business, but also to deal with VAT reports, and all your taxes needs. If you are not sure whether your business in Bulgaria needs a VAT number or not, this is the place to start.
VAT number
When the application for a VAT number is approved, the company will receive a unique VAT number.
All European Union countries have the same format for VAT numbers. For Bulgaria, the VAT number will have BG at the beginning, which is the country code, and will be followed by an identification number, commonly known as a Bulstat code.
Foreign companies and VAT number
Foreign companies are expected to register for VAT in Bulgaria. For those businesses involved in trading and getting earnings above the threshold of 100,000 BGN in a year on VAT-taxable products and services, the application must be presented within 14 days of the month when the limit has been exceeded.
When does a foreign company need a VAT number in Bulgaria?
The following commercial activities require a VAT registration in Bulgaria (regardless of the company being Bulgarian or it being a foreign company):
– Bringing products into Bulgaria,
– Storing products for resale in Bulgaria for a period longer than three months,
– The sale of products from Bulgaria to other European countries,
– Organization of events in Bulgaria,
– Sell of products online (even from outside the country into Bulgaria).
Once the company registers for a VAT number, it may take around 2 weeks for the process to be completed.
What goods and services are subject to VAT?
The VAT rate in Bulgaria is usually 20% and it applies to goods and services that are taxable, including importing goods from other European countries. This is a tax that is paid by the consumer and collected by the seller.
Certain services, like hotels and the tourist industry, count with a reduced VAT of 9%.
And in Bulgaria, VAT is zero for international transport of goods and passengers.
There are also other goods and services that are exempt of VAT in Bulgaria:
– Social security
– Healthcare
– Goods related to religion or culture
– Postal services
– Gambling
– Goods related to building
Conclusion
The first step is to find out if your company is required to get a VAT number and understand if it is working within the VAT taxation system in Bulgaria.
As Bulgaria is part of the European market, there are many regulations regarding VAT, including the presentation of invoices, credit notes, etc.
The best way to stay compliant is to engage the services of an accountancy company that will take care of all your business needs: from company formation in Bulgaria to tax consultancy, annual reports, and payroll.
