When doing business or living in Bulgaria, it is essential to understand the country’s taxation system. Value Added Tax (VAT) plays a significant role in Bulgaria’s economy and is known by a specific name. So, what is the name of the VAT in Bulgaria? Let’s find out!

The name of the VAT in Bulgaria

In Bulgaria, the Value Added Tax is commonly referred to as “Данък върху добавена стойност” (DДС). Translated into English, this is pronounced as “Danak varhu dobavena stoynost.”

DДС is levied on the supply of goods and services within Bulgaria, as well as on imports. It is an indirect tax that consumers ultimately bear while businesses act as intermediaries for tax collection.

Importance and rate of DДС in Bulgaria

DДС is a crucial revenue source for the Bulgarian government, helping to fund public services and infrastructure development. The current standard rate of DДС in Bulgaria is 20%. This applies to most goods and services, with certain exceptions and reduced rates for specific categories.

The reduced DДС rates are as follows:

  • 9% for hotel accommodation services, books, newspapers, and magazines;
  • 5% for some agricultural products, medicines, medical devices, and social housing;
  • 0% for intra-community supplies and exports of goods and services outside the European Union (EU).

DДС registration and obligations

In Bulgaria, businesses that reach or exceed a specified annual turnover threshold are required to register for DДС. This threshold is currently set at 50,000 Bulgarian Leva (BGN) (approximately 25,564 Euros).

Once registered, businesses have various obligations related to DДС, including:

  • Issuing valid DДС invoices;
  • Collecting DДС from customers on taxable supplies;
  • Filing periodic DДС returns with the Bulgarian tax authorities;
  • Settling any DДС liabilities or claiming refunds;
  • Maintaining DДС records for a prescribed period of time.

DДС, known as the Value Added Tax in Bulgaria, is a fundamental aspect of the country’s taxation system. It contributes significantly to the national budget while affecting both businesses and consumers. Understanding the name, importance, and rates of DДС in Bulgaria is vital for anyone involved in economic activities within the country. By adhering to the DДС regulations, businesses can ensure compliance, avoid penalties, and contribute to the growth of the Bulgarian economy.

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