VAT in Bulgaria is a topic worth understanding well – whether you run a business or simply make purchases in the country. Bulgaria applies a classic VAT system in line with European Union regulations, but as always, the devil is in the details. In this article, you will learn what VAT in Bulgaria looks like in 2025, which VAT rates apply, when VAT registration is required, and what to pay attention to in both local and international transactions.
How does VAT work in Bulgaria?
The Bulgarian VAT system is based on the same principles as in other EU Member States. Value Added Tax is imposed on most goods and services, and the obligation to charge and remit VAT lies with the seller. The consumer bears the cost of the tax as part of the gross price. Businesses can deduct input VAT on purchases, meaning VAT is effectively paid at each stage of the supply chain, but only on the value added.
The obligation to account for VAT applies to both domestic and foreign companies that operate in Bulgaria or sell goods and services within the country. For sales to customers in other EU countries, different rules apply – in many cases, the reverse charge mechanism or a 0% VAT rate is used, but only if specific conditions are met.
VAT rates in Bulgaria in 2025
The applicable VAT rates in Bulgaria are relatively straightforward. In 2025, three levels remain in force:
Standard VAT rate: 20% – applies to the vast majority of goods and services sold on the domestic market, including electronics, clothing, cosmetics, household appliances, construction services, transport services, and many others.
Reduced VAT rate: 9% – applies, among others, to accommodation services (hotels, guesthouses) and certain printed publications. In recent years, Bulgaria temporarily introduced additional reduced rates in response to inflation and economic conditions, but as of 2025, the scope has returned to the standard framework.
Zero VAT rate (0%) – applies mainly to exports of goods outside the EU and intra-Community supplies of goods to other Member States. It may also apply to certain transport services, provided specific conditions are met.
If you are asking yourself how much VAT is in Bulgaria, you must consider not only the nominal rate but also the type of goods or services to which it applies. This is particularly important in cross-border activities.
When does VAT registration become mandatory in Bulgaria?
Entrepreneurs are required to register for VAT in Bulgaria if they exceed a specific turnover threshold. In 2025, this threshold amounts to BGN 166,000 per year (approximately EUR 85,000). This means that a company generating taxable turnover above this amount in Bulgaria must apply for VAT registration.
The obligation may also arise earlier – for example, when a foreign company starts business activities in Bulgaria. In the case of electronic services or online trade, the obligation to account for VAT arises regardless of the turnover threshold, as VAT is settled based on the place of consumption (i.e. the customer’s country).
It is worth noting that a VAT-registered taxpayer in Bulgaria must maintain full records of sales and purchases, submit monthly VAT returns, and file VIES reports for intra-EU transactions.
VAT in Bulgaria and international transactions
If you run a business and sell goods or services to or from Bulgaria, several scenarios should be distinguished:
Sales to private customers in Bulgaria – Bulgarian VAT must be charged, even if you are a company from another EU country, unless you use the OSS (One Stop Shop) system.
Sales to VAT-registered businesses in Bulgaria – most often subject to the reverse charge mechanism, meaning the buyer accounts for VAT.
Purchases of goods from Bulgaria – if you are a company from another EU country, you should have an active EU VAT number to avoid Bulgarian VAT and settle the tax in your home country.
Application of the 0% VAT rate for intra-Community supplies is only possible if both parties are VAT-registered and the goods actually move between countries.
VAT refunds and obligations of foreign companies
Companies registered in other EU countries may apply for a refund of VAT paid in Bulgaria, provided certain conditions are met. This includes expenses such as accommodation, transport, trade fairs, or goods purchased for resale.
VAT refund applications are submitted electronically via the tax portal in the applicant’s home country, which forwards the request to the Bulgarian tax authorities. The deadline for submission is the end of September of the year following the tax year concerned.
For companies established outside the EU, separate procedures apply, often requiring the appointment of a fiscal representative in Bulgaria.
VAT in Bulgaria from the consumer’s perspective
For private individuals purchasing goods or services in Bulgaria, VAT is included in the price. There is no need for separate tax settlement, but differences in VAT rates can affect price levels. For example, accommodation services may be cheaper than in countries with higher VAT rates due to the reduced 9% rate.
Private individuals generally cannot reclaim VAT unless they act as businesses and meet the registration or refund requirements.
VAT in Bulgaria explained
VAT in Bulgaria is a transparent, three-tier system: 20% standard rate, 9% reduced rate, and 0% for international transactions. VAT applies to all businesses operating on the Bulgarian market or cooperating with Bulgarian contractors. The applicable VAT rate depends on the type of goods or services.
How much VAT applies in Bulgaria depends on the specific situation and the taxpayer’s status. Registration and VAT compliance can be straightforward if the rules are known. The Bulgarian system follows EU directives, but local details such as registration thresholds, monthly reporting, and conditions for applying the 0% rate should not be overlooked.
For entrepreneurs planning to operate in Bulgaria or engage in trade with Bulgarian partners, understanding VAT regulations is essential for safe and compliant business operations.