The following amendments to the Regulation for the implementation of the VATA entered into force on 28 February.
- Supplies of goods between a taxable person established in Bulgaria/Member State of the EU and its branches/other structures in a Member State/Bulgaria are not considered a supply of goods for VAT purposes, but an internal turnover. The same rule applies to the provision of services. In addition, the provision of services between the branches/other structures in Bulgaria and those in another Member State, of a taxable person established in a Member State, are also treated as internal turnover.
- New provisions have been introduced to determine which country’s rules for documentation should be followed. The general rule is that, where either the supplier or the recipient is located in Bulgaria, and the other is located in a Member State, invoices and credit notes should be issued in the form of the State where the place of supply is. The recipient should issue an invoice/credit note according to the rules of the VATA for an intra-Community supply of goods. In the case of an intra-Community acquisition of goods, the recipient should issue an invoice according to the rules of the Member State where the place of supply is. In the latter case, a Protocol under Article 117 of the VATA should also be issued.
- In cases where no VAT is to be charged, the rules for documentation now specify when invoices/credit notes should include the grounds under a particular provision of the law for why no VAT is payable, or the text “reverse charge”, or both. The rules are also supplemented with the requirement that the invoice/credit note for an intra-Community supply of goods should explicitly state the text “reverse charge” and the particular provision of the VATA relied upon for the non-charging of VAT.
- Amendments have been made with respect to agreement for invoicing between a supplier and a recipient. Taxable persons established in the territory of Bulgaria, where the place of supply is Bulgaria, qualify to enter into such agreements. Agreements may be executed orally or in writing. Parties are free to determine the terms and conditions and what information to include. The term is no longer limited. In addition, the Regulations no longer stipulate the scenarios where an agreement would be considered terminated; this should be regulated by the parties.
The National Revenue Agency should still be notified of the agreement by the supplier and, if executed in writing, be provided with a copy.
Other amendments to the Regulation, which are in compliance with the amendments of the VATA announced in the State Gazette, edition 94/2012, relate to:
- The right to deduct VAT (not initially deducted) for the supply of goods and services used entirely for taxable supplies thereafter;
- Electronic invoices;
- The invoicing of advance payments; and
- The timing for submission of the asset list with the National Revenue Agency following VAT registration.
Law: Regulation for the Implementation of the VAT Act; the Bulgarian VAT Act.