Reverse charge VAT in Bulgaria: who charges it and when

Reverse charge VAT means the tax on a supply is chargeable to the customer rather than to the supplier. The supplier issues an invoice without a rate or VAT amount, marked "reverse charge" (обратно начисляване), and the customer charges the VAT itself with a protocol under Art. 117 of the Bulgarian VAT Act (ЗДДС) and, where it has the right to input tax credit, deducts it in the same VAT return. This is how services from foreign suppliers, goods bought from another EU member state, waste and, until the end of 2026, grain are taxed.

When does the reverse charge apply

As a rule, the supplier registered under the VAT Act charges VAT (Art. 82, para. 1). The reverse charge is an exception and applies only in the cases the Act lists:

• 01Services with their place of supply in Bulgaria from a supplier not established in Bulgaria, when the customer is a taxable person (Art. 82, para. 2, item 3). This covers Google and Meta ads, cloud services and foreign SaaS.
• 02Gas, electricity, heating and cooling through networks from a supplier not established in Bulgaria, when the customer is VAT-registered (Art. 82, para. 2, item 1).
• 03Intra-community acquisitions: goods dispatched from another member state by a supplier VAT-registered there (Art. 13 and Art. 84).
• 04The acquirer in a triangular transaction (Art. 82, para. 3 and Art. 15).
• 05Gold materials or semi-finished products of 325 thousandths or more and investment gold where the supplier opted to tax the supply, when the customer is VAT-registered (Art. 82, para. 4 and Art. 161).
• 06Waste and services for processing it, and until 31 December 2026 also grain, oilseeds and emission allowances, when the customer is VAT-registered (Art. 82, para. 5, Art. 163a and Annex 2).

Bulgaria has no reverse charge for construction work or construction materials. Directive 2006/112/EC allows one for construction work (Art. 199, para. 1, point (a)), but the VAT Act has not introduced it.

Imports of goods from outside the EU are not reverse-charged either. Import VAT is charged by customs (Art. 56 of the VAT Act) and owed by the importer (Art. 83, para. 1). The exceptions are deferred accounting for import VAT under Art. 167a for certain goods in Annex 3, and imports under investment projects (Art. 57, para. 1).

When you buy: who charges the VAT

Who charges the tax on a purchase depends on where the supplier is, what you buy and whether you are VAT-registered:

Only a VAT-registered business issues a protocol. A business without registration registers first: under Art. 97a for services and under Art. 99 for EU goods above the threshold (see the section on unregistered businesses below).

If a foreign supplier charged you its own VAT because it did not know you are a business, that tax cannot be deducted in your Bulgarian VAT return: input tax credit under Art. 69, para. 1 covers tax charged by a supplier registered under the Bulgarian VAT Act. Give the supplier your VAT number and ask for a new invoice.

When you sell: what the invoice says

When the tax is chargeable to the customer, the invoice shows neither the rate nor the VAT amount, only "reverse charge" and the legal basis for it (Art. 114, para. 4 of the VAT Act). An intra-community supply of goods is different: it is zero-rated (Art. 53, para. 1), so the invoice shows the 0% rate and its basis, and the regulation also requires the words "reverse charge". The implementing regulation (ППЗДДС) sets the wording by type of supply:

An invoice for a service is issued within 5 days of the tax event (Art. 113, para. 4), and for an intra-community supply of goods by the 15th of the month after the tax event (Art. 113, para. 5). The VIES return is filed with the VAT return by the 14th of the following month (Art. 125, paras. 2 and 5). For sales to foreign clients in detail, with an example, see how to invoice foreign and EU clients.

If the invoice shows VAT anyway, the issuer owes that tax even though the law makes it chargeable to the customer (Art. 85 of the VAT Act). An invoice with tax that should not have been charged is wrongly issued: it is cancelled and a new one is issued (Art. 116, paras. 1 and 3 of the VAT Act), and if it is already in the supplier's or the customer's ledgers, a cancellation protocol is also drawn up (Art. 116, para. 4). A credit note is not the right document here: it is for reducing the taxable amount or for a supply that is undone. The difference between the two is covered in credit and debit notes.

How the customer charges the tax: a protocol within 15 days

The customer charges the tax with a protocol issued no later than 15 days after the date on which the tax became chargeable (Art. 117, para. 3 of the VAT Act). The protocol is mandatory under Art. 117, para. 1, item 1 for services from foreign suppliers and for intra-community acquisitions, and under item 4 for gold and Art. 163a supplies. What the protocol contains and how it is numbered is covered in the Art. 117 protocol.

The deadline runs from chargeability, not from receipt of the invoice. Chargeability depends on the purchase:

A protocol issued on time belongs to the tax period in which it was issued. If the deadline is missed, the tax is due for the period in which it became chargeable (Art. 86, para. 2), and that period is corrected.

The right to input tax credit arises when the tax becomes chargeable (Art. 68, para. 2). For services and the other Art. 82 cases it is exercised with the protocol (Art. 71, item 2). For an intra-community acquisition the protocol and the supplier's invoice are needed (Art. 71, item 5), and for gold and Art. 163a supplies from a taxable supplier also the supplier's invoice (Art. 71, item 2). The protocol goes into both the sales ledger and the purchase ledger: in the VAT return the base and tax are in boxes 12 and 22, and the credit in boxes 31 and 41. There is no credit in the cases under Art. 70, para. 1, for example goods and services used for entertainment; the tax on the protocol is then paid. How both ledgers are filled in is covered in the VAT sales and purchase ledgers.

Example: €5,000.00 of goods from Germany

A VAT-registered Bulgarian company buys equipment from a German supplier. The goods arrive in October 2026. The supplier issues its invoice on 20 October 2026, with both VAT numbers and no German VAT. The invoice was issued before 15 November, so the tax becomes chargeable on its date (Art. 63, para. 4 of the VAT Act).

Had the supplier issued its invoice on 20 November, the tax would have become chargeable on 15 November 2026 (Art. 63, para. 3), and the protocol deadline would have been 30 November. An advance paid before delivery does not change these dates (Art. 63, para. 5). No VIES return is filed for the purchase: Art. 125, para. 2 requires one only for supplies made.

Waste, scrap and grain: the domestic reverse charge

The reverse charge under Art. 163a of the VAT Act also applies between two parties in Bulgaria: the tax is chargeable to the customer when it is VAT-registered, whether the supplier is a taxable or a non-taxable person (Art. 163a, para. 2). The goods and services are listed in Annex 2 to the VAT Act:

The rules for these supplies:

• 01The supplier writes "обратно начисляване по чл. 163а, ал. 2 ЗДДС" on the invoice (Art. 163v of the VAT Act and Art. 97a, para. 2 of the regulation).
• 02The customer charges the tax with an Art. 117 protocol within 15 days. When it buys from individuals who are not taxable persons, it issues one protocol for all such purchases in the month, on its last day (Art. 163b).
• 03An advance makes the tax chargeable when paid (Art. 163a, para. 3).
• 04When waste is sold to the state or a state or municipal body, the supplier charges VAT (Art. 163a, para. 4).
• 05Art. 163a, para. 2 covers only VAT-registered customers. Sales to the EU and outside it follow the general rules for intra-community supplies and exports (Art. 163g).

The draft VAT amendments of 23 September 2026 do not extend Part II. Unless a law extending it is passed before the end of the year, grain suppliers charge VAT normally from 1 January 2027.

What changed on 1 January 2026

Several rules on the reverse charge and the related registration changed on 1 January 2026:

• 01Goods assembled or installed by a foreign supplier are no longer reverse-charged: Art. 82, para. 2, item 2 was repealed (State Gazette No. 115 of 2025). The place of supply is where the goods are installed (Art. 17, para. 4), and the supplier registers under Art. 96, para. 3 or 4 and charges Bulgarian VAT.
• 02The VAT registration threshold for intra-community acquisitions is €10,000 per calendar year (Art. 99, para. 2, as amended by State Gazette No. 70 of 2024).
• 03An EU service supplier registered in its own country to apply the EU small enterprise scheme in Bulgaria charges no VAT, and the customer does not self-charge (Art. 82, para. 2, item 3). On the invoice it states its identification number under that scheme, ending in "-EX" (Art. 114, para. 14 and Art. 168k, para. 5).
• 04Goods from an EU supplier applying the small enterprise exemption in its own country are not an intra-community acquisition (Art. 13, para. 4, item 11).

If the business is not VAT-registered

A business without VAT registration can still owe reverse-charge VAT, and then it registers first:

• 01Services from a supplier not established in Bulgaria: registration under Art. 97a, para. 1 of the VAT Act, with no turnover threshold, applying at least 7 days before the tax becomes chargeable (Art. 97a, para. 4). The business charges the tax with a protocol, files a VAT return every month and has no right to input tax credit (Art. 70, para. 4).
• 02Goods from the EU: registration under Art. 99 only when intra-community acquisitions exceed €10,000 in the calendar year. Below the threshold you charge no VAT on the acquisition. When the supplier dispatches the goods or arranges transport, the purchase is a distance sale (Art. 14, para. 1) with its place of supply in Bulgaria (Art. 20, para. 1), and the supplier charges Bulgarian VAT, including through OSS. The exception is a supplier established in only one member state whose sales to other EU countries did not exceed €10,000 in the current and previous year and who has not opted to tax in the buyer's country: it charges its own country's VAT (Art. 20b). If you collect the goods from the supplier yourself, there is no distance sale and the supplier also charges its own country's VAT.
• 03The small enterprise scheme does not exempt a business from these obligations. The exemption covers the small enterprise's own supplies (Art. 168b, para. 4), not its purchases.

For a business registered only under Art. 97a or Art. 99, the tax charged is a real cost: it pays it without deducting it.

What the draft for 2027 and 2028 proposes

What the draft proposes for e-invoices and the VAT return is covered in mandatory e-invoicing in Bulgaria from 2028, and the other changes in Bulgaria tax changes 2027.

Common mistakes

• 01Counting the 15 days from receipt of the invoice. The deadline runs from chargeability (Art. 117, para. 3), which for monthly ads is the date payment falls due (Art. 25, para. 4).
• 02Showing VAT on an invoice where the tax is chargeable to the customer. The rate and tax are left off (Art. 114, para. 4), and VAT shown is owed by the issuer (Art. 85). The exception is an intra-community supply of goods, which is zero-rated under Art. 53, para. 1.
• 03Self-charging VAT on goods installed by a foreign supplier. Since 1 January 2026 the supplier charges Bulgarian VAT.
• 04Treating an advance for EU goods as making the tax chargeable, or forgetting that an advance for a foreign service does. The rules differ: Art. 63, para. 5 and Art. 25, para. 7.
• 05Deducting input tax credit when registered only under Art. 97a or Art. 99. There is no such right (Art. 70, para. 4).
• 06Charging VAT on a hotel abroad because the supplier is foreign. The place of supply of a service connected with property is where the property is (Art. 21, para. 4, item 1), and there is no reverse charge in Bulgaria.
• 07Keeping the reverse charge on grain after 31 December 2026 without checking whether it was extended.

In smetni.app

When you sell a service to an EU business with a format-valid VAT number, the app fills in the 0% reason "Services to a business abroad" on the line, which you can change, and the invoice prints "Reverse charge" and the basis under Art. 21, para. 2 of the VAT Act. This is on every plan. In the Purchases module (Pro plan and up), an invoice without VAT from a foreign supplier can be recorded as the document type "Protocol (art. 117)": lines without a rate get 20% self-charged VAT. You enter the protocol number yourself; the app does not issue or print the protocol. On the Business plan the protocol also goes into both ledgers in the Declarations module. The app does not support the Art. 163a domestic reverse charge. See the guides to VAT and tax rates, purchases and declarations, and plans and pricing.