Persons registered for VAT in Bulgaria, who trade in goods with other EU countries, must complete statistical reports, known as Intrastat, if the value of the goods received/dispatched from/ to the EU exceeds certain thresholds. The statutory thresholds for Intrastat declaration for 2009 are BGN400,000 for dispatches and BGN250,000 for arrivals. Intrastat returns are submitted monthly in electronic format by the 10th day of the month following the respective month.
Deductibility and recovery of VAT A taxable person registered for VAT may recover input tax from output tax if the purchases are related to taxable sales or sales to foreign persons that would have been taxable if performed on the territory of the country. The right to deduct input VAT arises when the VAT becomes chargeable and can be exercised within the same month or during the following three months. Excess of input over output VAT is offset against VAT payable within two months. If afterwards, there is undeducted input VAT, it is subject to a refund within 30 days following the submission of a VAT return requesting the repayment. A 30day term for refund without obligatory offsetting applies to exporters and major investors.
Under certain circumstances, foreign non-registered persons may also refund Bulgarian VAT. The refund is allowed to businesses that are not established in Bulgaria. For businesses established in the EU, refunds are made under the terms of the EU’s 9th VAT Directive. For businesses and individuals established outside the EU, a refund is allowed under the terms of the EU’s 13th VAT Directive if their country allows reciprocal refunds to Bulgarian businesses.
Incentives A special incentive applies for major investors allowing them to self-assess VAT on imports (instead of paying it at customs clearance, as usual) and to enjoy a shorter (30-day) refund term with no additional two-month deduction. The incentive applies to entities that have obtained prior permission from the Minister of Finance.
Penalties Various penalties apply for breaches of VAT obligations, the most significant one being a penalty equal to the amount of unpaid VAT due, in addition to the VAT due.
Customs duties Customs duties are applied for the importation of goods from third (nonEU) countries. The customs duty Doing business in Bulgaria 2010
rates are determined according to the Combined Nomenclature applicable in all EU Member States. As an EU Member State, Bulgaria is a party to the free-trade agreements concluded by the Community. Customs suspensions, quotas or anti-dumping measures, introduced by the EU, are also applicable in Bulgaria. EU customs legislation is directly applicable in Bulgaria. Control is exercised mainly at clearance at the border. However, there are exemptions allowing persons having the status of ‘approved economic operator’ to be subject to post-clearance control and/or to clear goods at a place chosen by them.
Excise duties The following groups of goods are subject to excise duties in Bulgaria:
• Alcohol and alcoholic beverages • Tobacco products • Energy products and electricity The amount of the excise duty depends on the type of the goods and can be determined as a flat rate based on quantity, proportionally to the value, according to the specifics of the goods (e.g. alcohol percentage) or a combination of these. The taxable base is assessed on the specific measures set for each type of excise goods (volume, number, engine power).
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