Company VAT Registration Under Bulgarian Tax Law

Corporate Clients Insights, Corporate Tax

In this note, we review key VAT registration requirements applicable to companies under Bulgarian law. We do not address other categories of taxable entities such as partnerships, foundations, individuals engaged in taxable supplies or state-owned enterprises. Companies represent the predominant vehicle for business activity in Bulgaria and the registration rules applicable to them form the core framework for indirect taxation.  The previously mentioned categories may be subject to particular rules or considerations which would require separate treatment and we will cover this in a separate article.

Bulgaria’s Value Added Tax (VAT) system mandates specific registration procedures for companies engaging in taxable supplies. 

Legal Framework

VAT registration in Bulgaria is governed primarily by the Value Added Tax Act (VATA), itself enacted in accordance with Council Directive 2006/112/EC on the common system of value added tax (VAT Directive). The domestic Regulations for the Application of the Value Added Tax Act (RAVATA) provide detailed procedural requirements for VAT registration, specifying documents required, submission procedures and administrative timelines.

Bulgaria, an EU Member State since 2007, applies common EU VAT rules and transposes EU directives on registration generally consistently with EU law. 

Mandatory Registration Requirements

Turnover Trigger

Under Section 96 of VATA (as amended), mandatory VAT registration is triggered when a taxable person’s annual turnover exceeds BGN 100,000 (approximately €51,100). This threshold calculation includes all VAT-able supplies made within Bulgaria during any consecutive 12-month period, including advance payments received for future supplies.

Other Registration Triggers

Beyond the general turnover-based threshold described above, VATA establishes mandatory registration in several other circumstances:

1. Intra-Community Acquisitions: Section 99 of VATA mandates registration for entities whose intra-Community acquisitions exceed €10,000  within a calendar year.
2. Reverse Charge Transactions: Section 97a of VATA requires registration for recipients of services that are subject to the reverse charge mechanism.
3. Foreign Companies: Non-EU entities must register for VAT regardless of turnover when making (deemed) taxable supplies in Bulgaria. 

Registration Procedures

Application Process

Section 96 of VATA establishes that VAT registration applications must be submitted to the competent territorial directorate of the National Revenue Agency (NRA). The NRA serves as the competent authority for VAT registration under Section 196 of VATA. The authority maintains comprehensive registers of VAT-registered entities and coordinates with EU-wide VAT information exchange systems. The application must be submitted within seven days of the date on which the VAT liability arises.

Under Section 101, the NRA must complete its examination within seven days of receipt, issuing either a registration certificate or a reasoned refusal decision. 

Where registration is sought on grounds other than turnover, processing is limited to three days.

Required Documentation

RAVATA specifies completed registration forms, evidence of incorporation, information regarding anticipated taxable transactions, and details of business activities. Foreign companies face additional requirements including appointment of accredited representatives in some cases.

Voluntary Registration

Section 100 of VATA permits voluntary VAT registration for entities whose supplies remain below the mandatory threshold. Voluntary registration enables input VAT recovery and full participation in the VAT supply chain, but creates binding obligations that persist for a minimum 24 months from the beginning of the calendar year following registration.

Compliance and Submission Requirements

Monthly Reporting Obligations

Bulgarian VAT operates on a monthly reporting cycle, requiring registered entities to submit VAT returns by the 14th day of the month following the reporting period. The legislation mandates electronic submission of VAT returns with qualified electronic signature (QES) authentication or a Personal Identification Code (PIC), issued by the NRA.

Payment Obligations

VAT payments must accompany return submissions by the same deadline as the filing deadline. Interest charges apply to late payments at rates determined by reference to the Bulgarian National Bank base rate plus 10 percentage points.

Penalties and Enforcement

Section 178 of VATA establishes penalties ranging from BGN 500 to BGN 5,000 for failure to register within required timeframes. Entities failing to register face additional penalties equal to 100% of the uncharged VAT with a minimum penalty of BGN 500. 

Section 182(2) of VATA allows for reduced penalties when a VAT document is issued or recorded after the required tax period. In such cases, although the delay constitutes a violation, the sanction is limited to 25% of the uncharged VAT or the VAT stated in the unrecorded document, with a minimum fine of BGN 250. This approach encourages voluntary correction of errors while maintaining compliance incentives.

Section 179 imposes penalties of BGN 500 to BGN 10,000 for failure to submit VAT returns within prescribed deadlines. The legislation establishes a progressive penalty structure for VAT charging errors, ranging from 5% for corrections within six months to double the tax amount for corrections beyond 18 months.

Recent Legal Developments

The VAT registration threshold was increased to BGN 166,000 effective January 1, 2025, then subsequently reduced to the current BGN 100,000 effective April 1, 2025.

Recent amendments introduce Standard Audit File for Tax (SAF-T) requirements effective January 1, 2026, mandating submission of structured financial data in XML format with monthly submission requirements.

VAT Information Exchange System

Bulgaria participates in EU-wide VAT coordination mechanisms, including the VAT Information Exchange System (VIES) and various special schemes for cross-border transactions. Non-EU companies which are required to register must generally appoint fiscal representatives for VAT purposes.