Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

March 17, 2021
2021-5314

Bulgaria may “deactivate” VAT registrations of UK businesses following Brexit

Bulgaria, which is a Member State of the European Union (EU), has introduced changes to its Value Added Tax (VAT) law relating to United Kingdom (UK) businesses that are registered for VAT in the country, following the UK departure from the EU (Brexit). These rules also apply to businesses resident in other non-EU countries with which the EU has not concluded an agreement for mutual assistance similar in scope to Directive 2010/24 and Regulation 904/2010.

According to the Bulgarian authorities, VAT registrations of persons established in the UK may be automatically deactivated. This may lead to a Bulgarian VAT charge arising on available assets for which VAT has been deducted and to an inability to deduct VAT on domestic purchases, imports, and reverse charge services. To avoid deactivation, a UK business (or other non-EU business) may need to appoint a local VAT representative.

According to the Bulgarian VAT Act, a taxable person established or with a head office in the UK (or an affected third country) may remain registered for VAT in Bulgaria if the person appoints a local fiscal representative and notifies this appointment in writing to the Bulgarian National Revenue Agency by 31 March 2021.

A Bulgarian fiscal representative is jointly liable for the foreign person’s local VAT obligations. Such representative may be a Bulgarian natural or legal person. If no such representative is appointed by the end of March 2021, the VAT registration is terminated by the administration and the person may be deemed liable for Bulgarian VAT on any available assets for which input VAT credit was deducted (as of the VAT deregistration date).

To avoid potential automatic deactivation of a Bulgarian VAT registration, affected businesses should review their VAT registration status and consider appointment of a fiscal representative, as well as notifying the tax authorities and the Registry Agency by 31 March 2021 if a representative is appointed.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Bulgaria EOOD, Sofia

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more