Special cases of registration and deregistration under VATA
This article will examine the special cases of registration under VATA - those resulting from the transformation of companies (merger, consolidation, dissolution and separation), as well as the special cases of registration and deregistration in respect of foreign entities operating in the territory of Bulgaria.
The special cases of registration and deregistration under VATA concern companies, which have been transformed pursuant to Chapter Sixteen of the Commerce Act (CA), Arts. 15 and 60 of the same, where in-kind contribution is performed, as well as foreign persons not residing in the country and their registration and deregistration under VATA.
Compulsory registration as a result of transformation
The scope of taxable persons is detailed in Art. 10 (1) VATA.
No supply of goods or services has taken place under VATA, where the supply to the transferee from the transforming corporation, from the transferor or from the contributor of a non-cash asset results from the transformation of a commercial corporation according to the procedure established by the Commerce Act (Art. 10 (1), item 1 VATA).
However, registration under this Act is compulsory for such transformations, if the transformed entity is a registered person any (Art. 132 (1) VATA).
The taxable person must submit an application for registration within 14 days after the recording of the circumstance referred to in Art. 10 (1) of the Act in the Commercial Register or entry in the BULSTAT Register (Art. 132 (2) VATA).
The date of registration is the date of recording of the circumstance referred to in Art. 10 of the Act in the Commercial Register or entry in the BULSTAT Register. (Art. 132 (3) VATA).
The taxable person is entitled to a tax credit for the available assets at the date of registration of the company pursuant to Art. 74 (2), item 3 VATA by submitting a registration list of available assets, excluding those received pursuant to Art. 10 VATA. The deadline for submission of the said list is 45 days from the date of entry of the transformation in the Commercial Register or entry in the BULSTAT Register.
Registration of a foreign person which has a branch in the country
Branches of foreign persons in the territory of the Republic of Bulgaria are registered under VATA in accordance with the standard procedure under Chapter Nine of VATA - Art. 133 (1) of the Act.
The registration is compulsory as per Art. 96 (1) VATA, it is also compulsory in the cases of supplies of goods which are assembled and installed (Art. 97 VATA); supplies of services, for which the tax is chargeable on the recipient (Art. 97a VATA); supplies of radio- and telebroadcasting services carried out electronically (Art. 97b VATA); distance selling of goods (Art. 98 VATA); intra-European Union acquisitions (Art. 99 VATA) and optional as per Art. 100 VATA.
Upon recording in a special register of the National Revenue Agency, an identification number for VAT purposes, having a prefix "BG" must be given (Art. 94 (2) VATA).
Any taxable person having a taxable turnover of BGN 50,000 or more for a period not exceeding 12 consecutive months last preceding the current month are obligated to submit an application for registration under this Act within 14 days after the lapse of the tax period during which such turnover has accrued to the said person (Art. 96 (1) VATA). The taxable turnover is the sum of taxable amounts of the following supplies effected by such person: taxable supplies, including supplies liable to tax at 0% rate; supplies of financial services under Art. 46 VATA; supplies of insurance services under Art. 47 VATA (Art. 96 (2) VATA).
There are also some exceptions, namely any supplies of financial and insurance services, if not related to the core activity of the person (Art. 96 (3) VATA); supplies of tangible or intangible fixed assets, as well as any supplies under Chapter Eight of VATA; supplies whose place of transaction is within the country as per Art. 21 (6) VATA; advance payments on supplies prior to the occurrence of the chargeable event (Art. 51 (1) VATA).
Registration of a foreign person not residing in the country
Any foreign person, who has a fixed establishment within the territory of the country from which the said person carries out economic activity must be registered through the agency of an accredited representative (Art. 133 (1) VATA). The foreign person needs to fulfil the requirements for compulsory or optional registration.
A foreign person who is not established within the territory of the country but effects taxable supplies whereof the place of transaction is within the territory of the country and who satisfies the conditions of this Act for compulsory registration or for optional registration under VATA must be registered through the agency of an accredited representative (Art. 133 (2) VATA).
The registration is carried out by the accredited representative at the territorial directorate of the National Revenue Agency.
Upon dissolution of the person who is an accredited representative, or upon occurrence of other circumstances which lead to an impossibility for such person to fulfil the obligations thereof under this Act, the foreign person is obligated to designate a new accredited representative within 14 days after the date of occurrence of the intervening circumstances (Art. 133 (4) VATA).
Documents required for VAT registration of foreign persons not residing within the country
Where the registration of a foreign person not residing in Bulgaria is carried out under Art. 133 VATA, the following documents must be submitted to the territorial directorate of the National Revenue Agency:
- Application for registration under Art. 101 (1) VATA - Annex 1.
- A certificate by the competent tax authorities of current tax registration abroad of a non-resident person and a translation thereof (Art. 74 (3), item 1 RAVATA).
- The original of a notary certified contract in the country between the non-resident person and the accredited representative on the occasion of assignment of obligations under Art. 135 (2) and (3) VATA (Art. 74 (3), item 2 RAVATA).
- A copy of the identity documents where the latter is a natural person (Art. 74 (3), item 3 RAVATA).
- A document by the competent tax authorities certifying registration for VAT purposes in another Member State - for the registration under Art. 98 and Art. 100 (3) VATA (Art. 74 (3), item 4 RAVATA).
- A document by the competent tax authorities certifying that the latter authorities are notified that the person wishes the place of transaction of the distance sales effected thereby to be within the territory of the country (Art. 74 (3), item 5 RAVATA).
Termination of registration of the foreign person
The registration of a non-resident person registered in pursuance of Art. 133 VATA is terminated if the general conditions for deregistration under the Act are fulfilled (Art. 134 (1) VATA).
The deregistration procedure is contained in Art. 109 VATA.
If the necessary conditions for re-accredited representative of a foreign person are met (Art. 133 (4) VATA) and the said person does not comply with the statutory period of 14 days, their registration may be terminated at the initiative of the National Revenue Agency. A deregistration act is issued (Art. 134 (3) VATA). In this situation, the act issued is not delivered to the person and the date of registration is considered the date of expiry of the time limit under Art. 133 (4) VATA.