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    How VAT in Bulgaria Works

    Vat refund in Bulgaria

    ASB Editor

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    Understanding the VAT (Value Added Tax) system in Bulgaria is essential for businesses involved in local trade, EU acquisitions, or importing goods. Here’s what you need to know about how VAT works, including its refund mechanism.

    Standard VAT Rate in Bulgaria

    In Bulgaria, the standard VAT rate is 20% for most goods and services. Businesses that are VAT-registered and engaged in taxable supplies, such as:

    • Local supplies of goods and services
    • Intra-EU acquisitions performed in Bulgaria
    • Importing goods from outside the EU must follow strict VAT reporting and payment regulations.

    VAT Documentation and Reporting

    To stay compliant, businesses must:

    1. Issue proper documentation for all deliveries made and received.
    2. Record transactions in both purchase and sales journals.
    3. Submit monthly VAT reports and pay the due VAT electronically through the National Revenue Agency (NRA).

    How to Get a VAT Refund in Bulgaria

    Businesses eligible for a VAT refund must submit their VAT refund return by the 14th of the month following the reporting period. Notably the tax period is always one calendar month.

    VAT Refund Process

    Once submitted, the VAT refund process begins. There are two verification procedures:

    • Standard Verification – Takes 30 days after VAT declaration submission.
    • Detailed Revision – This can take up to three months, with possible extensions if additional information is required. This typically happens when:
      • The refund amount is significant
      • It’s your first time claiming a refund
      • There are errors in the declarations

    After completion, an Interception and Recovery Act is issued, and the VAT refund is transferred to your bank account. However, If you have outstanding public debts, these will be deducted from your refund.

    VAT Tax Credit and Avoiding Double Taxation

    Bulgarian law allows businesses to deduct VAT already paid on:

    • Goods and services received
    • Prepayments made before the taxable event
    • Imported goods

    This ensures that VAT is only paid on added value, thus preventing double taxation along the supply chain.

    Need Expert VAT Assistance?

    If you have questions about VAT registration, refunds, or compliance, reach out to ASB Accounting Services Bulgaria for personalized tax consulting.