Registration under VATA and value-added tax identification number
The following article will introduce you to the registration procedure under the Value Added Tax Act by examining when it is compulsory for local and foreign persons and when it is is a matter of choice.
The terms and conditions of the registration under the Value Added Tax Act (VATA) are outlined in Part VI, Chapter Nine of VATA. The legislator has provided that any taxable person who is established, as well as one that is not established, within the country, and who carries out taxable supplies of goods or services on which tax is not payable by the recipient, shall be subject to such registration.
Compulsory registration under VATA
Any taxable person having a taxable turnover of BGN 50,000 or more for a period not exceeding 12 consecutive months, preceding the current month is obligated to submit an application for registration (Art. 96 (1) VATA). This does not mean that the obligation for registration does not necessarily arise only after the 12 months have elapsed.
The obligation for registration does not apply to persons for whom the following conditions are simultaneously fulfilled:
1. they supply services electronically to recipients who are non-taxable persons, who are established or have a permanent address or usually reside within the territory of the country;
2. they are not established within the territory of the European Union;
3. they are registered for VAT purposes for their activity referred to in Item 1 in another Member State.
Compulsory registration at the initiative of the taxable person requires the submission of an application for registration within the terms under Art. 96 (1) VATA to the competent territorial directorate of the National Revenue Agency. The person must provide an e-mail correspondence address in the application for registration. If the person fails to indicate an e-mail address for a period of more than three months as from the date of occurrence of the obligation to notify, then the competent revenue authority may refuse to register or may terminate the registration of the said person (Art. 176, item 5 VATA).
Within 7 days after receipt of the application, the revenue authority verifies the grounds for registration.
Within 7 days after completion of the verification under, the revenue authority issues an act whereby it shall effect the registration or shall refuse to effect the registration, stating the reasons for such refusal. According to Art. 103 (1) VATA, the date of delivery of the registration act is deemed a date of registration under the Act. A registration certificate is also delivered to the registered person simultaneously with the delivery of the registration act, pursuant to Art. 104 (1) VATA.
At the date of registration the person must prepare a registration list in standard form (Annex № 2 RAVATA) of the assets within the meaning of the Accountancy Act and the services which the person is entitled to deduct tax credit on, as per Art. 74 or Art. 76 of the Act, and this registration list must be submitted no later than 7 days from the date of registration.
Where the taxable person registered under the Act has not complied with their obligation to register within the statutory time limit, the revenue authority may register it on their own initiative upon establishing that the obligation for registration under VATA has arisen for the person in question. This is effected by issuing a registration act by the revenue authority. The date of registration is deemed the date of delivery of the registration act (Art. 103 VATA).
According to the amendments to Art. 3 VATA (SG No. 108/2007), compulsory registration also arises for persons practicing a liberal profession, including as private enforcement agents and notaries
Other cases of compulsory registration
According to Art. 97 (1) VATA, the registration requirement under VATA applies to each person who is established in another Member State, who is not established within the territory of the country and who effects taxable supplies of goods which are assembled or installed within the territory of the country by or for the account of the said person. The application for registration must be filed no later than 7 days prior to the occurrence of the chargeable event for the supply. This registration does not take place when the recipient of the delivery is registered under this Act.
As of 1.01.2010, an obligation was introduced to register in case of supplies of services the tax for which is chargeable on the recipient. Thus, under Art. 97a VATA, any taxable person under Art. 3, (1), (5) and (6) receiving services with the place of supply within the territory of the country of supply within the territory of the country where such services are taxable and for which the tax is chargeable on the recipient under Art. 82 (2) shall be subject to registration.
According to Art. 98 (1) VATA, the registration requirement under the Act also applies to each taxable person who effects a supply of goods whereof the place of transaction is within the territory of the country under the terms of distance selling referred to in Art. 14 of the Act. The application for registration must be filed no later than 7 days prior to the occurrence of the chargeable event for the supply with which the total value of the distance sales over the current year exceeds BGN 70,000.
According to Art. 99 VATA, the registration requirement under the Act also applies to each non-taxable legal person and taxable person which is not registered in pursuance of Arts. 96, 97, 98, Art. 100 (1) and (3), and Art. 102, and which effects intra-European Union acquisition of goods. This obligation is carried out when the total value of the taxable intra-European Union acquisitions for the current calendar year exceeds BGN 20,000.
VATA has removed all restrictive conditions on optional registrations. According to Art. 100 therein, any taxable person, for which there are no conditions for compulsory registration under Art. 96 (1) will be entitled to be registered under this Act.
With the exception of registration for intra-European Union acquisitions, a person may not be registered, whoe registration was terminated or refused by the revenue administration pursuant to Art. 176 of the Act, until the grounds for refusal of registration are eliminated, accordingly the grounds for deregistration, or upon expiration of 24 months from the beginning of the month following the month of the deregistration or refusal of registration.
Registration under VATA of a person terminated with or without liquidation
This is one of the cases that occur in practice because although the Act obliges such persons to deregister (Art. 107, item 4, letter "a" VATA), they often continue to carry out independent economic activity even after the company is terminated.
Because of the need for standardisation of such practices, the NRA has issued a Letter ref. № 24-31-134/20.03.2009, which outlines its opinion on the fact that a company cannot remain registered for VAT while in liquidation, regardless of the fact that the said company conducts independent economic activity.
Logically it follows that the person deregistered on the above grounds cannot once again opt for "optional" registration.