A small amount does not remove the obligation
A new company with little turnover buys EUR 50 of Meta advertising. That transaction alone may create a Bulgarian VAT obligation because the general threshold is not the only ground for registration.
Article 97a is a separate ground and may apply whether turnover is EUR 2,000 or EUR 20,000.
What does Article 97a cover?
A taxable person receiving taxable services with a place of supply in Bulgaria must register where the VAT is payable by the recipient.
The provision also covers a taxable person established in Bulgaria supplying certain B2B services with a place of supply in another EU Member State where the customer accounts for the VAT there.
The brand name is not enough
Google, Meta, Microsoft 365, SaaS, hosting, and cloud products are common warning signs, but the platform name does not determine the answer.
The invoicing legal entity, its country, the precise service, the recipient, and the place of supply must be checked. An invoice from a Bulgarian supplier charging Bulgarian VAT may have a different treatment.
The deadline comes before the first relevant supply
The application is due no later than seven days before VAT on the first relevant supply becomes chargeable, whether through an advance payment or the tax point.
If an owner activates advertising on a company card and the invoice reaches the accountant at month-end, the review may already be late. Online services should be discussed before activation.
What follows after registration?
Where VAT is payable by the Bulgarian recipient, the invoice is not processed merely as an ordinary expense. The required document, reverse charge, and VAT reporting must be determined.
Registration solely under Article 97a does not provide a right to deduct input VAT and should not automatically be treated as equivalent to general VAT registration.
What do we check for a foreign service?
Before recording the transaction, we organise the key facts.
- Which legal entity is the supplier and where is it established?
- What is the service and who is the recipient?
- Where is the place of supply?
- Who is liable for VAT?
- When is the first payment or tax point?
- Did a registration ground arise before the invoice?
- How should the transaction be reported for VAT?