VAT Registration

BULGARIANT VAT REGISTRATION

Bulgarian legislation provides for two main types of VAT registration – obligatory and voluntary. Under the general rule, taxable persons are obliged to register for VAT purposes once their taxable turnover reaches BGN 50 000 (≈ 25 560 EUR) for the last 12 consecutive months.

Voluntary VAT registration and its benefits

However, each company performing independent economic activity may apply for voluntarily VAT registration at any time from the first day of its corporate registration as long as it has not reached the above threshold.

The voluntary registration is a general one and allows a deduction for any input VAT due by the recipient of supplies of goods and/or services used for further performance of taxable supplies. It is recommendable for any company the activity of which covers more than VAT exempt supplies such as financial, insurance, health, educational, etc. services.

Our experience shows that the immediate voluntary VAT registration is highly recommended for any new company which already performs or is planning to perform taxable supplies and:

• Needs to make substantial initial investments in goods and services to be used for performance of its future taxable supplies. If VAT registered, the company will be entitled to deduct the input VAT due in respect of those goods or services; and/or
• Plans shortly after its incorporation to: 1) perform intra-community acquisitions of goods the total amount of which will go over BGN 20 000 (≈ 10 220 EUR) within a given calendar year, and/or 2) obtain taxable services with place of supply in Bulgaria for which the company as recipient should self-charge VAT, and/or 3) perform services with place of supply in another EU member state. The reason is that if your company obtains/performs any of the above goods and/or services without already having VAT registration it has to apply for a special one which does not give right to VAT credit due for the related input supplies.

For our clients who are planning to invest in a Bulgarian company the activity of which will cover any of the hypotheses we offer two alternative solutions:

• Purchase of a VAT registered ready-made company. This service saves our clients a lot of time and money related to the administrative obligations related to a VAT registration: drafting documents, certifications and/or apostille, filing, dealing with the tax authorities, etc. Buying a VAT registered ready-made company allows you to start immediately any actions related to the taxable activity of your investment; or
• Services related to the voluntary VAT registration of your newly incorporated company. We will take care of all related steps and will save you the related hustle and battle with the tax administration.