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Import VAT in Bulgaria: When Can Your Business Recover It?
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When goods enter Bulgaria from outside the European Union, import VAT is normally due during customs clearance. For a business, this VAT may not be a final cost. It can often be deducted as input VAT, but only when the legal conditions and documentation are correct.
Paying for the goods is not enough. The company claiming the VAT must have the right to deduct input VAT, use the goods for activities that carry a deduction right and be correctly identified in the customs documents.
When can import VAT be deducted?
A Bulgarian business can generally deduct import VAT when the imported goods are used for taxable business activities.
A common example is a company importing products from a non-EU supplier and later selling them through taxable sales. If the company has the appropriate VAT registration, is shown as the importer and holds the required customs evidence, the import VAT can normally be treated as deductible input VAT.
Before claiming it, check that:
- The VAT registration gives the company a right to deduct input VAT.
- The goods are used for taxable activities.
- The company is named as importer in the customs document.
- The import VAT has been paid where required.
- The customs document is included correctly in the VAT records.
Not every Bulgarian VAT registration gives the same deduction rights. Some limited registration grounds do not allow input VAT recovery. This is worth checking before the first import rather than after the goods have cleared customs.
Why the importer details matter
A common mistake is that the Bulgarian company pays for the goods, but another party appears as importer.
For a standard import VAT deduction, the business claiming the credit must hold a customs document that identifies it as the importer. This becomes particularly important when a courier, supplier, freight forwarder or customs representative handles the clearance.
Businesses involved in customs procedures also use an EORI number. The company and EORI details used for the shipment should correspond to the intended importer.
Which documents should you keep?
The customs file is the core evidence. A supplier invoice alone is not enough.
- The customs import document showing your company as importer.
- Evidence that import VAT was paid, where applicable.
- The supplier invoice for the imported goods.
- Transport and shipping documents.
- Accounting records linking the goods to the business activity.
Quick import VAT check
| Condition | What to verify | Main risk |
|---|---|---|
| VAT status | Registration permits input VAT deduction | Limited registration may not qualify |
| Business use | Goods support taxable activity | Exempt or private use can restrict deduction |
| Importer | Company is named in the customs document | Payment alone does not prove entitlement |
| VAT evidence | VAT is documented and paid where required | Missing evidence can block the claim |
| VAT reporting | Customs document is recorded correctly | Incorrect reporting can delay recovery |
When is import VAT claimed?
Under the Bulgarian VAT Act, the right to deduct input VAT can generally be exercised in the tax period in which the right arises or in one of the following 12 tax periods. The customs document must be reflected in the purchase ledger and the deduction included in the VAT return.
A deduction does not automatically mean an immediate bank refund.
If deductible VAT exceeds VAT due for the period, the result may be VAT for refund. Under the standard Bulgarian procedure, the amount can first be used against VAT due in the following two consecutive tax periods. Any remaining balance is then handled under the applicable offset and refund rules.
When can recovery be restricted?
Import VAT may be restricted or denied when:
- The goods are used for exempt activities.
- The goods are used privately or outside the company’s economic activity.
- The wrong entity is shown as importer.
- Required customs or payment evidence is incomplete.
- The goods cannot be linked to taxable business activity.
What should you do before the shipment arrives?
Before customs clearance, confirm who will act as importer and check the company details that will appear in the declaration. Send the import information to your accountant before release. After clearance, keep the complete customs file with the accounting records.
This check can prevent a serious problem: VAT may have been paid, yet the company may still be unable to deduct it because the documentation does not support the claim.
ASB Accounting Services Bulgaria can assist with Bulgarian VAT compliance, import documentation reviews and the correct reporting of eligible import VAT.
This article provides general information and does not constitute tax, accounting or legal advice. Each import should be reviewed according to its specific facts and documentation.