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12.3. Refund of VAT to Non-Residents

Bulgaria allows for the deduction of input VAT to offset output VAT for non-residents registered for VAT. If the input VAT exceeds output VAT in a given period, the balance will be carried forward in the following 2 months to offset VAT payable. If a balance remains after 2 months a refund will be paid. A shorter carry forward term with no offset can apply when zero-rated supplies account for 30% or more of an enterprise's total supply.

VAT refunds are also available for non-residents with no establishment in Bulgaria that are not registered for VAT. Non-resident enterprises in EU Member States are generally eligible to claim VAT refunds electronically via the VAT tax portal of the state in which they are resident under EU Directive 2008/9/EC. Non-resident enterprises in non-EU countries are eligible to claim VAT refunds if reciprocal treatment for Bulgarian resident enterprises is granted by that country. VAT refund is also available to taxable persons established in Northern Ireland subject to certain conditions. Effective 1 July 2021, VAT refund is available for distance sales of goods and supplies of goods facilitated by electronic interfaces under the Union scheme, as well as distance sales of goods under the scheme for goods imported from third (non-EU) countries or territories.

A new system of proportional input VAT deduction, for assets which are used for both business and personal use, is applicable from 1 January 2017.