Registering for taxes is an obligation all individuals and entities must do for their taxable income. Companies must pay different kinds of taxes depending on the type of venture they carry out. Value Added Tax is charged on the sales of goods purchased or services rendered by a business locally based or one with a branch office within the country. Those who fail to pay this tax, end up paying fines and financial penalties. It is advised that a business owner registers his or her company for a value-added tax number and ensures annual reports are filed when due.
If you are looking to learn more about VAT, registration, and all there is to know about how it works in the country, this guide provides the necessary information you require.
Types of VAT
There are two different VAT rates here: The standard rate of 20 percent and the Intermediary rate of 9 percent.
Registration
You must register and fill out an application with the government before commencing business activities within the state. The late application attracts penalties and fines. After presenting the required documents, you will be issued a personal tax number.
Processing Time
After submitting the required documents, it will take at least a month for you to acquire the tax number.
Documents Required
The following are some of the documents that one must present during registration:
- Completed registration form
- Proof of activity within the territory
- Power of attorney (if an agent is utilized)
- Copy of Articles of Association, etc.
Hiring A Fiscal Representative
EU companies do not need to hire a fiscal agent to represent them during tax registration. While non-EU corporations must pay fiscal agents to stand in and carry out their taxable activities within the country. Fiscal representatives are liable for the VAT owed by the businesses they represent.
Returns
A company is required to report its VAT position by filing monthly VAT returns. There is no tax period here. The returns must be filed online before the 14th of the month succeeding the tax month it relates to. Filing of Annual recapitulative return is not necessary.
Thresholds
If a company exceeds specific thresholds, it must file an Intrastat statement. The thresholds in the country are:
- Arrivals – BGN 430,000
- Shipments – BGN 270,000
Invoice
As a rule, a company that supplies goods or services is obliged to give out an invoice with value-added tax to customers. The VAT Directive mentions the minimum information that must be on each invoice. For some, countries can add additional information. One must pay attention to the conversion rates when there is a difference in currency used on the invoice and the point of transaction, and to certain statements which may justify the legal reason for not charging the tax.
Refunds
There are lots of ways you can obtain a refund of a paid tax. However, reclaiming foreign VAT differs depending on whether a company is established in Europe and/or is identified for VAT here:
The company has a VAT number in the country
Simply submit a refund application within the timeframe required by local regulations. A refund of credit is claimable within 30 days after submitting the return where the person has affected supplies in the last 12 months before the current month at a value above 30% of the taxable supplies.
The company is established in a European country but has no VAT number
Apply for a refund online from the country of residence, in the form and within the time limits required.
The company is established outside Europe and has no VAT number
Can appoint a tax representative to present the refund application in the form and within the time limits required.
