VAT deregistration in Bulgaria: when and how

VAT registration is easy to start and easy to forget about. Leaving the VAT system needs more care: there are rules on when you can do it, and the final VAT bill can be larger than expected.

When deregistration is required

Deregistration is mandatory in situations such as:

• the company ceases to exist, for example after liquidation or a merger,
• the activity that required registration has ended, for example a foreign business stops holding stock in Bulgaria,
• the NRA finds that the grounds for registration no longer exist, or that the business does not meet its obligations.

When a company is liquidated or wound up, there are short deadlines for informing the National Revenue Agency (NRA), so deregistration should be part of the closure plan from the start.

When deregistration is optional

A business that registered because of its turnover, or voluntarily, may be able to deregister when its taxable turnover falls below the threshold. Conditions apply, including how long you have been registered, so check before you file.

How the procedure works

1. Application. You file an application with the NRA, giving the grounds for deregistration.
2. Review. The NRA checks the grounds. In a voluntary case, the review takes around seven days, followed by a deregistration act or a reasoned refusal.
3. Deregistration act. Deregistration usually takes effect on the date the act is served. If the company has ceased to exist, the date of termination applies.
4. Final return. You file a VAT return for the last period, including the month in which the act was served.

The VAT you may have to pay back

This is the part that surprises businesses. On deregistration, VAT is generally due on the goods and fixed assets you still hold on which you deducted input VAT when you bought them: stock, equipment, vehicles, sometimes property.

In practice:

• List all assets and stock on which VAT was deducted.
• Value them according to the VAT rules.
• Include the VAT in the final return and make sure the cash is available.

For businesses with large assets, this amount can decide whether deregistration is worth it at all.

Before you apply

• Check whether you can deregister, and from when.
• Estimate the VAT due on assets and stock.
• Make sure all previous returns, VIES declarations and payments are in order: open issues slow the procedure.
• Plan the end of related obligations, such as Intrastat or OSS.

How we can help

We check whether deregistration makes sense, calculate the VAT on assets, file the application and the final return, and deal with the NRA until the act is issued. VAT registration · VAT compliance