Place of Supply of Goods in Bulgaria
This article will outline the ways to determine the place of supply for the different types of supplies of goods under the Value Added Tax Act (VATA). This is essential for VAT taxation because it determines the regime of taxation of supply. The principle that every supply is subject to taxation under the law of the country on whose territory it is performed.
The substantive nature of the goods determines the place of performance according to the territory, on which the final operations are carried out the final operations on the suitableness of the goods for use, or the territory from which the goods are being moved so as to be used.
The place of supply of goods which are not dispatched or transported is the place where the goods are when ownership passes or upon the actual handing over of the goods under Art. 6 (2) VATA.
The place of supply of goods which are dispatched or transported either by the supplier or by the recipient or by a third person is the place where the goods are at the time when dispatch or transport to the recipient begins (Art. 17 (2) VATA).
The place of supply of goods by an intermediary in a triangular operation to an acquirer in a triangular operation is the Member State where the acquirer in a triangular operation is registered for VAT purposes. The term ‘triangular operation’ is defined in Art. 15 VATA.
According to Art. 4 of the Regulations for the Application of VATA (RAVATA), in the cases of supply of goods transported from third countries or territories to a place within the territory of the country, the place of transaction of supply shall be within the territory of the country if the supplier of the goods is an importer.
The place of supply of goods, which are assembled or installed by or for the account of the supplier is the place where the goods are assembled or installed.
The place of supply of goods, restaurant and catering services effected on board of ships, aircraft or trains during the transport of passengers is the territory of the country in those cases listed in Art. 18 (1) VATA. Outside these cases, the place of supply of goods, restaurant and catering services effected on board of ships, aircraft or trains during the transport of passengers is outside the territory of the country.
The place of execution when it comes to supply of natural gas through a natural gas system situated on the territory of the European Union or a network connected to such a system or when it comes to supply of electricity or of heating or cooling energy through district heating or cooling networks is regulated under Art. 19, items 1, 2 and 3.
Distance selling is also regulated under a separate tax procedure in VATA (Art. 20 VATA). The definition of distance selling of goods is contained in Art. 14 VATA. The place of supply of goods for the purposes of distance selling is the territory of the Member State, where the transport terminates, if all conditions listed in Art. 14 (1), items 1, 2, 3 and 4 VATA are fulfilled simultaneously, accordingly, the supplier is registered under this Act on grounds different from the registration for intra-European Union acquisition; the supplies carried out by the person under item 1 on the conditions of distance selling to a Member State exceed the amounts determined by the law thereof for the current year or the preceding calendar year. Where there is no such condition, the place of supply is the territory of the country, except for the cases where the supplier has notified the territorial directorate by place of registration that their preferred place of supply be the territory of another Member State where the transport terminates, and the person in question is registered for VAT purposes in the said Member State.
The place of supply under the terms of distance selling is the territory of the country where the following conditions are simultaneously fulfilled: the supplier is a person registered for VAT purposes in another Member State; the supplies effected under the terms of distance selling for the territory of the country will exceed the amount of BGN 70,000 for the current calendar year or have exceeded the said amount for the last preceding calendar year. (this sum does not include the VAT due in the Member State where the supplier is registered for VAT purposes, nor does it include the supply of excisable goods).
This provision is not applicable, where the place of supply is the territory of the country, where the supplier is registered in pursuance of Art. 100 (3) VATA (the person may opt for optional registration regardless of the sum under item 2 - BGN 70,000 - if they have notified the territorial directorate of the Member State, where they are registered that their preferred place of supply be the territory of the country.