VAT Registration (VATA) – what you need to know

VAT registration (VATA) is a serious step for any company. Sometimes it is confusing to understand when a company has the obligation to register under VATA. As well as when it is better to proceed to voluntary registration.

Who can register for VAT (VATA)?

You can undertake voluntary VAT registration (VATA) if you make taxable deliveries under the Value Added Tax Act. The registration can be made at any time. It is possible, even when you haven’t reached the mandatory threshold of BGN 50,000 for the previous 12 months.

VAT registration (VATA) can be made by Ltd.; ST; PLC, etc.

Who has the obligation to register for VAT (VATA)?

VAT registration (VATA) becomes obligatory upon realized turnover of taxable supplies in excess of BGN 50,000 for the previous 12 months. In this case, you have the obligation to apply for VAT registration (VATA) within 14th of the month following the month in which this turnover is reached.

VAT registration (VATA) is also mandatory in some specific cases. The most common of them is under Article 97a of the VATA. It refers to services on which the tax is payable by the recipient registered for VAT (VATA) in an EU country. This obligation to register under the VAT Act arises no later than 7 days before the date of the tax event at which the tax becomes due.

When is it good to make a voluntary VAT registration (VATA)?

There are companies that decide to register for VAT (VATA) voluntarily, even though they have not reached the turnover of BGN 50,000. By registering for VAT (VATA), they will be able to deduct the tax paid to other companies from the tax they charge on their sales.  Thus, they will only contribute to the budget the difference between the two amounts.

VAT registration (VATA) has another effect – you give the impression to your business partners that your business is large and well-established. Even if that’s not always the case.

It is important to know that VAT registration (VATA) also carries an increased document turnover. The necessary declarations must be submitted in due course, otherwise you face serious fines.

Another important point of is that the prices at which you sell will now include VAT.  The 20% VAT you owe to the budget for each sale, you must provide for pricing.

T&G Consulting can advise you on whether you fall under the mandatory registration column, as well as assist you with the registration itself.