How to cancel an invoice in Bulgaria: protocol and limits

In Bulgaria, cancelling (анулиране) is the only permitted way to fix a wrongly compiled invoice: corrections and additions to an issued invoice are not allowed, so the wrong document is cancelled and a new one issued (Art. 116, para. 1 of the VAT Act, ЗДДС). If the wrong invoice is already in either party's VAT ledger, a cancellation protocol is also drawn up. A correct invoice whose amount changes later is not cancelled but adjusted with a note.

When an invoice is cancelled

An invoice is cancelled when it is wrongly compiled or corrected (Art. 116, para. 1 of the VAT Act). The Act expressly treats these invoices and notes as wrongly compiled:

• 01No VAT charged although it was due, for example an exemption applied without a legal basis (Art. 116, para. 2).
• 02VAT charged although it was not due, for example on a service to an EU business where the customer owes the tax (Art. 116, para. 3).
• 03The wrong VAT rate, for example 9% instead of 20% (Art. 116, para. 6).

The Act does not list other errors, but in practice an error in a mandatory item under Art. 114, such as the wrong customer, identification number, quantity or amount, also makes an invoice wrongly compiled (see Bulgarian invoice requirements). A corrected invoice, for example a paper copy with an amount written over, is cancelled too. The same rules apply to credit and debit notes.

An invoice with VAT that was not due must be cancelled, because VAT shown on an invoice is owed by whoever showed it (Art. 85 of the VAT Act). The scenarios are in reverse charge VAT in Bulgaria.

How to cancel an invoice: steps

The issuer cancels the invoice. Under self-billing, unless agreed otherwise, the recipient that issued it on the supplier's behalf cancels it (Art. 79a, para. 8 of the regulation implementing the VAT Act, ППЗДДС).

1. The issuer cancels the wrong invoice. It is not destroyed, and the issuer keeps every copy (Art. 116, para. 5 of the VAT Act; Art. 78, para. 5 of the regulation), so the recipient returns its paper copy.
2. The issuer issues a new invoice with the correct details and a new number. The issue date is new; the tax event date stays the date of the supply (Art. 114, para. 1, items 3 and 10 of the VAT Act).
3. If either party has already entered the wrong invoice in its ledger, a protocol under Art. 116, para. 4 is drawn up.

The cancelled number stays with the cancelled invoice and is never reused; the invoice remains in the sequence, so no gap arises (Art. 78, para. 2 of the regulation); see invoice numbering in Bulgaria.

The cancellation protocol

A cancellation protocol is needed when the wrong or corrected invoice is already in the supplier's sales ledger or the recipient's purchase ledger (Art. 116, para. 4 of the VAT Act). It may be omitted when the cancelled and the new invoice are issued on the same date (Art. 81, para. 4 of the regulation).

It is drawn up for each party, and both the issuer and the recipient keep it (Art. 116, para. 4 of the VAT Act; Art. 78, para. 6 of the regulation). The recipient claims input VAT on the new invoice if it holds the protocol (Art. 58, para. 1 of the regulation), so when in doubt, the protocol is the safer choice.

Four items are mandatory (Art. 116, para. 4, items 1-4); the other fields in this template are recommended:

How a cancelled invoice goes into the VAT ledgers

The entry depends on whether the invoice was cancelled in its month of issue or in a later month (annex 12 to the regulation).

The recipient adjusts the input VAT already claimed in the month of cancellation by entering the cancelled invoice in its purchase ledger (Art. 78, para. 3 of the VAT Act). The columns are explained in Bulgarian VAT sales and purchase ledgers.

Cancelling an invoice after the VAT return is filed

An invoice cancelled after the return for its month of issue was filed is reported in the month of cancellation; the filed return is not refiled (annex 12 to the regulation).

Art. 126 of the VAT Act covers a different case: documents left out of the ledgers or entered wrongly. A correct invoice entered with the wrong amount is not cancelled; the entry is corrected by refiling until the filing deadline, normally the 14th (Art. 126, para. 2), and after that by written notice to the National Revenue Agency (НАП, the NRA) (Art. 126, para. 3, item 2).

Example: 9% instead of 20%

A VAT-registered company supplies catering to an events agency on 15 September 2026 and the same day issues invoice No. 0000000318 for a taxable amount of €1,000.00 with 9% VAT of €90.00, a total of €1,090.00. Catering is not among the 9% supplies in Art. 66a of the VAT Act, so it is taxed at 20% (Art. 66, para. 1). The customer, the agency, is VAT-registered, includes the catering in its own taxable service to its client and has full input VAT recovery; it enters the invoice in its September purchase ledger. A business buying catering for its own event usually has no input VAT credit (Art. 70, para. 1, item 3 of the VAT Act). The error is found on 6 October 2026.

The September return is not refiled. Both parties show €110.00 more VAT in October: charged by the supplier, claimed by the customer. If the customer has already paid €1,090.00, it pays another €110.00.

The entries are for October, but the new invoice raises the tax and is issued after the 5-day deadline in Art. 113, para. 4 of the VAT Act. Under Art. 86, para. 2, tax on a document not issued on time is due for the period in which it became chargeable, here September. Confirm with your accountant whether interest is therefore due on the €110.00 difference from the September deadline.

Cancel or issue a note: decision table

Cancellation fixes an error in the invoice, while a note records a change after a correct invoice (Arts. 115 and 116 of the VAT Act).

A credit note does not replace cancellation for a wrong rate: it covers a change in the taxable amount or a rescinded supply (Art. 115, para. 1), as explained in credit and debit notes in Bulgaria. "Storno invoice" (сторно фактура) is not a VAT Act term: it usually means a cancellation or a credit note, and the right document depends on the reason.

When cancellation is not possible

The rules restrict cancellation in three cases:

• 01A document already cancelled cannot be cancelled again, nor can the entry that cancelled it (annex 12 to the regulation).
• 02After a final revenue authority act, such as a tax audit assessment, cancellation is possible only once the assessed liability is paid or offset (Art. 116, para. 7 of the VAT Act; Art. 67b, para. 2 of the regulation).
• 03After VAT deregistration, the person notifies the NRA in writing within 5 days of finding the error, and the NRA permits or refuses a new document (Art. 126, para. 5 of the VAT Act).

The VAT Act sets no general deadline for cancellation, except on registration under Art. 96: invoices issued between crossing the threshold and service of the registration act are corrected under Art. 116 within 5 days of service (Art. 116, para. 8). The Tax and Social Insurance Procedure Code (ДОПК) does not regulate invoice cancellation; under it, no tax assessment proceedings are opened once 5 years have passed from the end of the year in which the return was or should have been filed (Art. 109, para. 1). For an invoice from a previous year, confirm the consequences with your accountant.

In smetni.app

In the Sales module cancelling sets the invoice's status to cancelled: the document and its number are kept, and the number is never reused. An invoice can be cancelled from issued, sent or overdue; a paid invoice cannot be cancelled directly. While the invoice has active credit or debit notes, cancelling is blocked and the notes are cancelled first. A cancelled invoice cannot be edited and takes no payments. A document already shared in the client portal opens there with a cancelled notice, and the portal list hides cancelled documents. smetni.app does not generate the Art. 116, para. 4 protocol: where it is required, you draw it up separately. Cancelling is on every plan; the sales ledger is on Business and up. See Sales, Document numbering, Declarations and plans and pricing.