The conditions and procedure for exercising the right to deduct a tax credit are regulated in the Value Added Tax Act (VAT Act).
A registered person is entitled to a tax credit for the tax due from him for: goods or services received by him under a taxable supply; a payment made by him before the occurrence of a taxable event for a taxable supply; an import made by him; the tax due from him as a payer.
A situation is possible in which a person registered in Bulgaria under the Value Added Tax Act (VATA) owns real estate, purchased with a tax credit, with which the person wants to register a new company. Several important questions arise in this hypothesis. First of all, is it possible to contribute with real estate purchased with a tax credit to a new company that is not a VAT registered person. The second important question that should be answered is what would happen to the tax credit for the real estate in the event that the new company is a registered or non-registered person for VAT purposes.
When providing services to foreign clients, Bulgarian companies find themselves in a situation where they must document the payment of taxes abroad to the Bulgarian tax authorities.
When registering a branch of a foreign trader in Bulgaria, a question arises whether the expenses for travel and business trips of the managers of the foreign trader, which are reported in Bulgaria, are subject to tax credit deduction.
These are the general rules for the Vat taxation of intra-EU services in accordance to the Bulgarian Value Added Tax Act (VATA).
The intra-EU goods supplies are subject to special rules. Here is the VAT taxation procedure for some of the most common intra-EU services provided:
General intra-EU supply taxation rules
The general rules for this type of supplies are listed in Chapter 5 Taxation of intra-community supplies of VATA (articles 51 to 53). Continue reading “VAT on intra-EU services”
Advance payments are a key component of the Value Added Tax Act (VATA) in Bulgaria, due to the fact that they have a direct relation to the VAT charging obligation and with the tax credit deduction rights. Here is a short overview of the types of advance payments and their relationship with invoice issuance as well as the rights for tax deduction for advance payments and the deposits made as such payments: Continue reading “Advance payments in accordance with VATA”
