Services for Implementing VAT, OSS Regime, VIES, and Intrastat Declaration

In its long-standing practice, the Balantrix Accounting has gained invaluable experience in working with various tax systems for taxing goods, services, and trade. This experience covers both the territory of the Republic of Bulgaria and the European Union.

We will introduce general concepts for working with the Value Added Tax Act, the One-Stop Shop (OSS) service, VIES (VAT Information Exchange System), and the Intrastat system.

VAT Registration

Value Added Tax is used to tax the consumption of goods and services, placing the burden on consumers by taxing goods and sales.

The Value Added Tax Act (VATA) regulates the process of VAT registration. The National Revenue Agency (NRA) maintains a special register where individuals with a VAT identification number are entered.

What necessitates VAT registration?

Not all individuals are subject to VAT registration. First, you must meet the following criteria:

Your company’s registered office must be within the country;
You engage in independent economic activity, such as trade, manufacturing, or service provision;
The place of service provision is in the Republic of Bulgaria.

VAT Deregistration

The recent changes in the VATA came into effect on January 1, 2023. Through these changes, the threshold for mandatory registration increased to 100,000 BGN.

These changes were met with controversy and raised questions about VAT deregistration.:

VAT deregistration can only be carried out if the grounds are defined by law. The NRA can initiate deregistration, but it can also be initiated on the initiative of the obligated person;
After deregistration, we no longer have the right to charge VAT on sales, and the right to a tax credit is also forfeited.

OSS

On July 1, 2021, new rules for online sales to end customers in the EU were adopted. They regulate the One-Stop Shop (OSS) service.

OSS allows companies located in more than one EU member state not to register in each country where they operate.

In the EU, there is a threshold of €10,000, which is lower than the previous tax thresholds. If a supplier is not registered under OSS, they must register for VAT in the country where the recipient of the goods or services is located. If they were previously registered for VAT but register under OSS, they are subject to deregistration in the respective country.

VIES

The VAT Information Exchange System (VIES) is an electronic system for sharing VAT information in the EU. It provides access to VIES declarations of companies registered and operating within the EU.

VIES declarations are submitted using a template – Annex 14 – prepared based on aggregated data from the registers under Article 124, Paragraph 1 of the VATA.

The existence of VIES is mandated by the elimination of fiscal customs control in the EU.

Who, when, and how to submit a VIES declaration?

VIES declarations are submitted by traders registered for VAT in one member state when:

Making deliveries of goods to traders registered for VAT in one country to another member state;
Providing services under Articles 22-24 of the VATA within another member state;
In triangular operations;
The supplier submits a VIES declaration but does not charge VAT within the EU.

Intrastat

The Intrastat system facilitates the exchange of information between EU member states by creating a database related to the exchange of goods within the Union. It includes all community goods, such as:

Goods produced or acquired within the EU;
Goods imported from countries outside the EU that have passed through a customs regime for admission into free circulation;
Goods produced in the EU from materials from the two previous points.

“Acquisition” and “dispatch”

of goods are introduced through Intrastat, replacing the traditional “import” and “export.”. All movements of goods from EU member states to Bulgaria are considered “acquisitions,” while movements from Bulgaria to another member state are considered “dispatches”.

Who and when submits Intrastat declarations?

Declarations under Intrastat are submitted by so-called Intrastat operators. They are registered for VAT and trade in community goods, having reached a specified annual turnover for arrivals and dispatches.

On November 3, 2022, the order of the Chairperson of the National Statistical Institute (NSI) was published, defining the thresholds for acquisitions and dispatches, namely:

For the ” Acquisitions ” flow – BGN 700,000 (value for 2022 – BGN 520,000);
For the “Dispatches” flow – BGN 1,000,000 (value for 2022 – BGN 780,000).