Credit and debit notes in Bulgaria: when and how to issue

In Bulgaria a credit note (кредитно известие) is issued when, after the invoice, the taxable amount of the supply falls or the supply is rescinded, and a debit note (дебитно известие) when the taxable amount rises (Art. 115, paras. 1 and 3 of the VAT Act, ЗДДС). The note is issued within 5 days of the circumstance and states the number and date of the invoice and its reason. The supplier enters the note in its sales ledger for the month of issue, and the recipient cannot defer a credit note under the 12-month window that applies to invoices. An error in an invoice is not corrected with a note: the wrong invoice is cancelled.

When a credit or debit note is issued

A note to the invoice is mandatory when, after the invoice was issued, the taxable amount of the supply changes or the supply is rescinded (Art. 115, para. 1 of the VAT Act). A decrease or a rescission calls for a credit note, and an increase for a debit note (Art. 115, para. 3). The supplier issues the note (Art. 115, para. 1). The recipient may issue it on the supplier's behalf only under self-billing, with a prior agreement between the parties (Art. 113, para. 11 of the VAT Act and Art. 79a of the regulation implementing the VAT Act, ППЗДДС).

What the deadline is

The note is issued no later than 5 days after the circumstance that changes the taxable amount or rescinds the supply (Art. 115, para. 2 of the VAT Act). The circumstance is a specific, dated event: the discount agreement, the return of the goods, the rescission of the contract.

For a supply with an invoice for an advance received, the deadline runs differently. The note is issued within 5 days of the date the advance is refunded, offset or otherwise settled for consideration, and covers the amount refunded, offset or settled (Art. 115, para. 2). Example: an advance of €1,200.00 including VAT is invoiced on 3 August 2026, the contract is rescinded on 1 September and the money is refunded on 15 September. The credit note is due by 20 September 2026.

What the note contains and how it is numbered

The note contains every element of an invoice under Art. 114 of the VAT Act and two more: the number and date of the invoice it relates to, and the reason for issuing it (Art. 115, para. 4). The document is titled "Кредитно известие" (credit note) or "Дебитно известие" (debit note). The reason describes the specific circumstance, for example "10% trade discount under the agreement of 14.09.2026". A paper note is issued in at least two copies, for the supplier and for the recipient (Art. 115, para. 5).

The note's number has ten digits and comes from the same sequence as the invoices: numbers ascend without duplicates or gaps and do not depend on the document type (Art. 78, para. 2 of the regulation). A separate credit note sequence starting at 0000000001 is not allowed. Numbering continues past the end of the year (Art. 78, para. 3 of the regulation). The requirements for the invoice itself are covered in Bulgarian invoice requirements.

Does a credit note show a minus sign

The VAT Act and its implementing regulation do not say whether amounts on the credit note itself carry a minus sign. The note states the taxable amount and the tax under Art. 114, and a reason that makes clear the amount is being reduced. What matters is that it shows by how much the taxable amount and the tax are reduced.

In the VAT ledgers a credit note reduces the taxable amount and the tax, so its values are entered as negative figures. Annex 12 to the regulation allows a minus sign in value fields, and for a rescinded supply it expressly requires the note to be entered with values equal to the original entry but with the opposite sign. The document type in the ledgers is code 02 for a debit note and code 03 for a credit note (annex 12 to the regulation).

How the note goes into the ledgers, and in which period

The supplier enters an issued note in the sales ledger for the tax period in which it was issued (Art. 124, para. 2 of the VAT Act). The recipient has different timing for credit and debit notes.

The recipient enters a credit note even when the supplier is no longer VAT-registered (Art. 124, para. 5).

When the circumstance and the note fall in different months, for example a discount agreed on the 30th and a note dated the 2nd of the next month, the two provisions point to different periods for the recipient. Art. 124, para. 5 of the VAT Act requires recording for the period in which the note was issued, while Art. 78, para. 3 of the VAT Act requires the input tax credit adjustment in the period in which the circumstance arose. Neither provision refers to the other, so in that case confirm the period with your accountant.

Example: a 10% discount a month after the invoice

A VAT-registered company delivers equipment on 7 August 2026 and issues invoice No. 0000000215 dated 10 August 2026 for €2,000.00 plus 20% VAT of €400.00, a total of €2,400.00. The customer, also VAT-registered, enters the invoice in its purchase ledger for August. On 14 September 2026 the parties sign an agreement for a 10% trade discount on this supply.

If the customer has already paid €2,400.00, the supplier refunds €240.00 or the parties offset it by agreement. If the invoice is unpaid, the customer owes €2,160.00. The columns follow annexes 10 and 11 to the regulation and the cells follow the VAT return in annex 13; with partial input tax credit the recipient uses columns 12 and 13 and cells 32 and 42.

When no credit note is issued

No credit note is issued when there is no invoice for it to refer to: Art. 115, para. 1 of the VAT Act requires a note only for a supply "for which an invoice has been issued". The most common case is a sale to a private individual who is not a taxable person, for which an invoice is not mandatory (Art. 113, para. 3, item 1). A VAT-registered supplier reports these sales in a monthly sales report (Art. 119, paras. 1 and 2). The VAT Act has no specific rule for refunding such a sale, but according to NRA opinions the reduction is shown as a negative amount in the report for the month of the refund, backed by a document for the refund. A storno receipt under Ordinance N-18 is mandatory only for cash refunds (Art. 31, para. 4 of N-18); for a refund by card or bank transfer the correction is recorded on the basis of the payment documents. Online sales are covered in Stripe and the Bulgarian invoice.

If the individual did receive an invoice, for example at their request (Art. 113, para. 6), the change is documented with a note: invoices and notes are issued whether or not the recipient is registered under the Act (Art. 79, para. 1 of the regulation).

No note is issued simply because the customer does not pay. Non-payment alone is not a ground under Art. 115; the tax is reduced with a credit note only when the customer was VAT-registered at the time of supply, the receivable is uncollectible and every condition of Art. 126a, para. 1 of the VAT Act is met, for example written notice to the recipient and proof of collection efforts (Art. 126a, para. 1, items 4 and 5; Art. 126b, para. 1). In the ledgers such a note has its own code, 23 (annex 12 to the regulation).

Credit note or cancelling the invoice

A credit note documents a real change after a correct invoice, while cancellation (анулиране) removes a wrongly compiled invoice. Corrections and additions to invoices and notes are not allowed: wrongly compiled or corrected documents are cancelled and new ones issued (Art. 116, para. 1 of the VAT Act). Documents that omit tax that should have been charged, charge tax that should not have been, or apply the wrong rate also count as wrongly compiled (Art. 116, paras. 2, 3 and 6).

The protocol under Art. 116, para. 4 states the reason for cancellation, the number and date of the cancelled and of the new document, and the signatures of the persons who drew it up for each party. It may be omitted when the cancelled and the new document are issued on the same date (Art. 81, para. 4 of the regulation), and both the issuer and the recipient keep it (Art. 78, para. 6). The recipient exercises input tax credit on the new document if it holds the protocol (Art. 58, para. 1 of the regulation).

Notes to customers in the EU and outside it

A note to a foreign customer follows the VAT treatment of the invoice. For a service under Art. 21, para. 2 of the VAT Act to a business in another member state and for an intra-Community supply of goods, the note carries "обратно начисляване" (reverse charge) and the relevant provision (Art. 79, para. 2, items 3 and 5 of the regulation, which expressly refer to "the invoice/note"). The relief that lets a note omit the rate or the basis for not charging VAT (Art. 115, para. 7 of the VAT Act) does not apply to intra-Community supplies (Art. 115, para. 7) or to supplies with their place of supply outside Bulgaria (Art. 79, para. 16 of the regulation).

The VIES return is compiled from the ledger data (Art. 117, para. 4 of the regulation), so a note to an intra-Community supply or to a service under Art. 21, para. 2 with its place of supply in another member state is reflected there as well. The exception is documents for advances received on intra-Community supplies of goods, which are not included in the VIES return (Art. 117, para. 4 of the regulation).

Common mistakes

• 01A separate credit note sequence starting at 1. Notes continue the shared sequence with invoices (Art. 78, para. 2 of the regulation).
• 02A credit note instead of cancellation for a wrong rate or for VAT that was not due. Such an invoice is wrongly compiled and is cancelled (Art. 116, paras. 3 and 6 of the VAT Act).
• 03A note without the invoice number and date, or without a reason (Art. 115, para. 4 of the VAT Act).
• 04A note issued after the 5 days, for example when the discount is agreed but the note waits for month end. The deadline runs from the circumstance (Art. 115, para. 2), and for an advance from the refund.
• 05A credit note only because the customer does not pay. Without the conditions of Art. 126a, para. 1 of the VAT Act, non-payment is not a ground for a note.
• 06The recipient postponing a credit note to a later month, as it may with invoices. The 12-month window does not apply to credit notes (Art. 124, para. 5 of the VAT Act).
• 07A debit note for additional goods. New goods are a separate supply and get a new invoice (Art. 113, para. 1 of the VAT Act).
• 08A credit note for a refund on a sale to a private individual with no invoice. There is no invoice for the note to refer to (Art. 115, para. 1).

In smetni.app

In the Sales module you create a credit or debit note linked to the original invoice and fill in the reason for the correction. The note takes the next number from the series of the invoice it corrects, in the same sequence as the invoices. A cancelled number is never reused, and active linked notes can block cancelling the invoice. With the Stripe connection (Pro plan and up) a Stripe credit note becomes a Bulgarian credit note; see Sales, Document numbering and plans and pricing.