This article will provide an overview of the options for registration under the Bulgarian Value Added Tax Act (VAT Act) that for foreign companies in Bulgaria might become obligatory, as well as an information for the necessary documentation required for the VAT registration.

A mandatory registration according to the VAT-Act in Bulgaria is required for any foreign company engaged in the following activities:

• Delivery of items that are assembled or installed in accordance with Art. 97 Para. 1 VAT-Act;
• Deliveries of services for which the tax liability is shifted to the recipient of the service in accordance with Art. 97a VAT-Act;
• Delivery of telecommunications services, radio and television services and electronically rendered services in accordance with Art. 97b (1) VAT-Act;
• Dispatch transactions in accordance with Art. 98 Para. 1 VAT-Act.

The requirements that a person must meet in order to qualify for the above-mentioned VAT-Act filing options are not the subject of this Article. Here you can find further information on this topic.

Depending on whether the foreign company has its registered office in another Member State of the European Union (EU) or not, we can distinguish between two types of registration under the VAT-Act for foreign legal entities:

1. Registration under the VAT-Act of a company established in a third country whereas there is no legal agreement on mutual assistance

In this event there are two possibilities for registration in Bulgaria available – depending on whether the company has a permanent establishment in the country of its economic activity or not. In both cases, the company is subject to a special registration under the Bulgarian VAT Act, unless the permanent establishment is a branch of the foreign company. The branches shall be registered in accordance with the general legal requirements that apply to the registration of all Bulgarian companies.

For all other cases of registration under the VAT-Act, the foreign company has to appoint an accredited representative in Bulgaria. The accredited representative may be either a natural person or a Bulgarian legal entity. The natural persons shall have a legal capacity, as well as a permanent address or permanent residence permit in the country.  The legal entities shall not be involved in any liquidation or insolvency proceedings and shall have no due taxes liabilities and social security contributions (Art. 135 VAT-Act).

The tax representatives represent the foreign companies with regard to all tax matters and are jointly and severally liable for all their obligations.

It should be noted that all amendments, including the dismissal of the accredited representative, shall be notified within 14 days to the competent district department of the Bulgarian National Revenue Agency. A new accredited representative shall also be named within this period, otherwise the company is subject to official deregistration under the VAT Act by the NRA.

2. Registration under the VAT-Act of a company, which is based in an EU member state or a third country, whereas a legal agreement on mutual assistance has been concluded between both countries.

On the contrary to the above mentioned companies, these companies have the right to choose either to be registered according to the general legal requirements or to be registered through an accredited representative (Art. 133 para. 6 VAT-Act). Since the choice of the accredited representative is free, such entities are granted number of concessions, as follows:

• the foreign companies are not obliged to report a change in circumstances, including the dismissal of the accredited representative, to the NRA, as well as they are not obliged to appoint a new accredited representative within the same period;

• such entities cannot be unregistered ex officio by the NRA according to the VAT-Act if they do not fulfill their obligations mentioned under the previous point;

• In such cases, the tax representative is not jointly and severally liable for the foreign company’s obligations.

3. Documents for the registration according to the VAT-Act for foreign companies from a third country and/or an EU member state, which companies have decided to appoint a tax representative.

The standard documents for the VAT registration, which companies have to submit during the registration procedure are:

• Filed registration form;
• information on taxable transactions during the 12 months preceding the application;
• information on taxable intra-Community acquisitions for the current year;
• a statement on the continuity of the business;
• list of totals and balances;
• Questionnaire;
• notarized power of attorney – copy and original, if the documents are submitted by an authorised representative and, if applicable, any existing contracts;
• list of attachments;

The registration by an accredited representative requires the submission of additional documents (Art. 74 para. 3 DV, VAT-Act), as follows:

• notarized contract between the foreign company and the accredited representative on the assignment of the corresponding obligations;
• Copying of the proof of identity if the accredited representative is a natural person
• a certificate issued by the competent tax authorities on the application by the person of a domestic place of performance for the supplies regarding remote sale ;

4. The NRA maintains a register for all persons registered under the Bulgarian VAT Act by acquiring information from other public registers such as the Bulgarian Commercial Register in Bulgaria and the BULSTAT Register. Since foreign companies are listed in none of the registers mentioned above, they have to register with the NRA before the obtaining of the VAT registration. After this registration is completed, the companies get a service number which serves as a Unified Identification Number (UIC) or BULSTAT Code. The same documents are required for this registration as for the registration of a foreign employer in Bulgaria, namely the copies and originals as follows:

• official excerpt from the commercial register for the legal person, issued by the competent authorities in the country of registration, certified by an apostille (except for persons registered in Austria) and translated by a sworn translator. The official form must include the name of the company, the registration number of the legal person (if applicable), the authorized representative and the registered office and business address.
• a tax declaration issued by the competent tax office in the country of registration, which must also be authenticated with an apostille and translated by the sworn translator;
• If the documents for the assignment of a service number are submitted by an accredited representative, a notarised power of attorney must be presented. The power of attorney may be certified as follows:
• by a Bulgarian notary;
• by a Bulgarian consulate abroad;
• by a notary abroad, where the State is a signatory to the Hague Convention, the notarial certification must be legalised by an apostille. The originals of the documents are subject to legalisation and translation in Bulgaria.
• If the State in which the power of attorney is certified is not a signatory State to the Hague Convention, the document must be legalized by the competent authorities (which correspond to the Bulgarian Ministry of Justice or Foreign Affairs) and subsequently by the Bulgarian embassy abroad in that State. After sending the original documents to Bulgaria, this document is to be translated and legalized by the Consular Department of the Ministry of Foreign Affairs.