- Value Added Tax Act – Art. 81, Par. 1, Item 1
The ordinance sets out the procedure and the documents for reimbursement the legitimately accrued VAT to foreign persons that are settled and registered for the purposes of VAT in another member state of the European Community, for goods purchased, services provided and import performed at the territory of Bulgaria.
Persons entitled to VAT reimbursement (conditions that define a person as a „foreign person”):
Rights to claim VAT reimbursement have all the taxable persons (persons who perform independent economic activity, regardless of its purposes and results), for which all the following prerequisites are fulfilled for the period referring to the claim for tax reimbursement:
1. the person has no registered office and address of management, permanent entity, permanent address or habitual abode at the territory of the country;
2. the person has not made deliveries at the territory of the country according to the VATA, except for the delivery of:
- transport services and services related to international transport according to Art. 30 and 31 of the VATA;
- goods and services for which the tax is collected from the recipient of the delivery, according to Art. 82, Par. 2 of the VATA.
3. the person is registered for VAT purposes in the member state where it has a residence.
Prerequisites for the right for reimbursement
1. A person is entitled to reimbursement of VAT accrued for goods and services acquired and imported, which consequently shall be used for taxable deliveries performed by this person in the country where it is settled, providing that these deliveries could receive tax credit if they were performed at the territory of the country. Also, right for tax credit occurs in the cases when the purchased goods and acquired services are used for: deliveries of goods with international transport and deliveries related to international transport.
2. A person is entitled to partial reimbursement of the tax regarding goods and services if in the member state, where it is settled, the person performs deliveries with right for deducting tax credit, as well as deliveries with no such right. The amount of the tax is calculated on the basis of the information from the certificate, issued by the member state where the person is settled.
3. The amount of the tax, for which the right for reimbursement has occurred during the calendar year or the remaining months, shall not be less than BGN 50.
Exercising the right for reimbursement and documents required
The right for VAT reimbursement occurs when the reimbursable tax becomes collectable, and is executed individually or through an agent authorized by the foreign person who acts on behalf and at the expense of this person. In order to exercise the right for tax reimbursement the following documents shall be submitted to the competent revenue authority:
1. request for VAT reimbursement according to a form, filled by the person in Bulgarian, except for the information about person’s name and address which has to be filled in the official language of the country where the person is settled;
2. declaration that all conditions for nomination of a person as a foreign one have been fulfilled;
3. original certificate following the required form, which is issued by the competent tax authorities in the country where the person is settled, as well as a certified translation of this certificate in Bulgarian. This certificate shall prove that the person has been performing economic activity during the calendar year when the grounds for reimbursement occurred;
4. original copies of the tax documents for received deliveries or documents for performed import for which VAT reimbursement is claimed;
5. written power of attorney for authorizing an agent if the person exercises his right for reimbursement via an agent. The authorization shall be made in written for every request.
Term for asserting
The right for reimbursement can be exercised at the latest by July 30th during the year which follows the year when the right for reimbursement has occurred.
The request for reimbursement can refer to a period shorter than 1 calendar year, but not less than 3 months. In that case the tax can be reimbursed if its amount is equal to or exceeds BGN 400. Furthermore, the request for reimbursement can refer to a period shorter than 3 months, if this period is a remainder of the calendar year and the amount of the tax is not less than BGN 50.
VAT is reimbursed by the competent Bulgarian revenue authority in BGN (Bulgarian levas) at the bank account, which is specified in the request for reimbursement, up to 6 months after the receipt of the request. The costs for the transfer of the reimbursed tax are at the expense of the foreign person.