The process of VAT registration is governed by the Value Added Tax Law (VAT Law) and its implementing rules.
According to the VAT Law, the National Revenue Agency (NRA) establishes and keeps a special register that is part of the register under Art. 80, Par. 1 of the Tax Procedure Code, which shall contain all persons that are officially entered into the Commercial Register and the BULSTAT Register.
VAT registration is done by the National Revenue Agency (NRA). In order to make a VAT registration, general registration under Art. 80, Par. 1 of the Tax Procedure Code is required, which registration is done automatically for all persons entered in the Commercial Register and the BULSTAT Register.
Upon entry in the register of the NRA all persons receive an identification number for VAT purposes, before which the sign “BG” is put.
Subject to VAT registration is:
- any taxable person that is established in the Republic of Bulgaria and is making a taxable supply of goods or services.
- any taxable person that is not established in the Republic of Bulgaria and is making a taxable supply of goods or services other than those for which the tax is payable by the recipient.
A taxable person is any person that carries out any economic activity independently, whatever the purpose and the results.
An independent economic activity is the activity of producers, merchants and persons supplying services (including in the field of mining and agriculture), as well the exercise of a freelancer (including private bailiff and notary). Independent economic activity is also any activity carried out on a regular basis or by profession, including the exploitation of tangible or intangible property for the purpose of obtaining income therefrom.
VAT registration is of two types – obligatory and optional.
Obligatory VAT registration
Obligation to register upon reaching the taxable turnover of BGN 50,000.
A taxable person, upon reaching the taxable turnover of BGN 50,000 or more for a period not longer than 12 consecutive months before the current month, is required within 14 days of the expiration of the tax period during which they reached this turnover to apply for VAT registration /Art. 96, Par. 1 of the VAT Law/.
From the moment of their registration under the VAT Law, the taxable person is liable to charge VAT on taxable supplies carried out, and also to use a tax credit on the supplies they receive. Compulsory registration under the VAT Law is done through an application of the taxable person or by initiative of the revenue authority.
Obligation for registration for supplies of goods for assembly and installation
Subject to VAT registration shall be any person established in another Member State that is not established in the country and makes taxable supply of goods, which are mounted or installed within the territory of the country by or on his behalf when the recipient of that supply is not registered under the VAT Law /Art. 97 of the VAT Law/.
Registration obligation arises not later than 7 days before the date of the chargeable event for the supply comes.
Registration obligation for supplies of services on which the tax is payable by the recipient
Subject to VAT registration shall be any taxable person under Art. 3, Par. 1, 5 and 6 of the VAT Law that receives services with place of performance within the territory of the country, which services are taxable and the tax on which is payable by the recipient under Art. 82, Par. 2 of the VAT Law /Art. 97a of the VAT Law/.
Subject to VAT registration shall be any taxable person under Art. 3, Par. 1, 5 and 6 of the VAT Law, established in the country, that provides services under Art. 21, Par. 2 of the VAT Law with place of performance within the territory of another Member State.
Persons are obliged to submit application for VAT registration no later than 7 days before the date on which the tax becomes chargeable (advance payment or taxable event), and the tax base of the service received is subject to taxation.
Registration obligation for remote sale of goods
Subject to VAT registration shall be any taxable person making the supply of goods within the territory of country in terms of remote sale /Art. 98 of the VAT Law/.
Registration obligation arises not later than 7 days before the date of the tax event for the supply, by which the total remote sales in the current year exceeds the amount specified by law – BGN 70,000.
Registration obligation for intra-Community acquisition
Subject to VAT registration shall be any non-taxable legal person and any taxable person that is not registered on other grounds and is performing intra-Community acquisition /ICA/ of goods when the total value of taxable intra-Community acquisitions for the current calendar year exceeds BGN 20,000 /Art. 99 of the VAT Law/.
Registration obligation arises not later than 7 days before the date of the chargeable event for the supply, by which the total value of taxable intra-Community acquisitions exceeds BGN 20,000 without VAT, due or paid in the Member State from which the goods are transported or shipped. Intra-Community acquisition that exceeds this threshold is subject to taxation under this Law.
The acquisition of new transport vehicles and excisable goods do not fall within this case.
Optional VAT registration
The VAT Law enables any taxable person that carries out independent economic activity and for which there are no requirements for compulsory VAT registration, to apply for VAT registration /Art. 100 of the VAT Law/.
Registration under the general rules:
Any taxable person that is not subject to obligatory VAT registration under Art. 96 of the VAT Law, is entitled to be registered under this Law /Art. 100, Par. 1 of the VAT Law/.
Registration for intra-Community acquisition
Any taxable and non-taxable legal person, for which there are no conditions for compulsory registration on ICA, is entitled to be optionally registered under this Law for intra-Community acquisition /Art. 100, Par. 2 of the VAT Law/.
Registration for distant sales
Any taxable person may be registered under this Law regardless of the amount of deliveries under the conditions of remote sale, when informing the tax authorities of the Member State in which they are registered for VAT purposes that it wishes their distance sales to have location within the territory of the country /Art. 100, Par. 3 of the VAT Law/.
Registration initiated by the revenue authority
In case a revenue authority finds that a person has failed to fulfill their obligation to submit application for registration on time, it registers them by issuing of a registration act, if the conditions for registration are met.
VAT registration is done by the person obliged or entitled to be registered, who submits an application form to the competent territorial directorate of the National Revenue Agency /NRA TD/.
The application shall be submitted:
1. personally when the taxable person is a capable physical person or a sole trader;
2. by a person with representative power when the taxable person is a legal person or a cooperative;
3. by a person with representative power under the articles of association when the taxable person is an unincorporated association or an insurance fund;
4. by an accredited representative under Art. 135;
5. by a person specifically authorized to do so by the persons under it. 1, 2, 3 and 4, having a notarized power of attorney.
The application may be filed electronically under the Tax and Social Insurance Procedure Code.
The application for registration must contain the grounds for registration and the documents specified in the Regulations for Application of the VAT Law attached.
Within 7 days after receiving the application, the revenue authority shall verify the grounds for registration.
Within 7 days after the inspection is completed, the revenue authority shall issue an act, by which it performs or refuses to carry out registration, providing grounds for the refusal.
The date of VAT registration shall be the date of service of the registration act.
Registration of a foreign person that is not established in the Republic of Bulgaria
According to Art. 133 of the VAT Law, subject to registration is:
- A foreign person who has a permanent establishment on the territory of the country from which they carry out business and meets the requirements for compulsory or optional registration under this Law.
- A foreign person who is not established in the country but makes taxable supplies located on the territory of the country and meets the requirements for compulsory or optional registration under this Law.
A foreign person is registered through an accredited representative (an exception to this policy is for branches of foreign persons – they are registered under the general terms). Registration is done at the NRA TD Sofia.
An accredited representative may only be a capable physical person domiciled or resident in the country or a local legal person that is not announced insolvent or going into liquidation, and has no due and unpaid tax liabilities or social security contributions levied by the National Revenue Agency /Art. 135, Par. 1 of the VAT Law/.
An accredited representative represents a foreign person in all their tax obligations under the VAT Law. An accredited representative shall be jointly and unlimitedly liable for the obligations of the foreign person under the VAT Law, except pursuant to Art. 133, Par. 6 of the same.
Upon termination of the accredited representative or the occurrence of other circumstances that lead to that person’s inability to perform their duties under this Law, the foreign person is required to determine a new accredited representative /Art. 133, Par. 4 of the VAT Law/ within 14 days from the date of the occurrence of the new circumstances.
Registration in connection with the electronic supply of services by persons that are not established in the European Union
The right of registration under this line is governed by Art. 152 of the VAT Law. Entitled to such registration is any taxable person that fulfills all the following conditions:
- carries out deliveries of services electronically, the recipients of which are non-taxable persons established or domiciled or habitually resident in a Member State;
- is not established in the European Union;
- is not required to register for VAT on other grounds on the territory of the country or on the territory of another Member State.
Persons submit an electronic application for registration before the NRA TD – Sofia, or deregistration respectively. The requisites and the form and manner of submission of electronic applications for registration and deregistration are announced on the website of the NRA.
The NRA TD – Sofia informs the person electronically for the registration, the identification number and the date of registration within 7 days of receipt of the application.а