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Outsourcing VAT Compliance with KPMG in Bulgaria

Outsourcing VAT Compliance with KPMG in Bulgaria

VAT compliance is known as the process of preparing and filing VAT returns. In Bulgaria, it takes more than that.

VAT compliance is known as the process of preparing and filing VAT returns.

Many foreign businesses pursue VAT registration in Bulgaria due to chain transactions, storage arrangements, distance sales operations or other specific reasons. 

With the changes to place of supply rules from 2015, broadcasting, telecommunications and e-services companies may choose to register for VAT in Bulgaria due to the shorter statute of limitations compared to the mini-one stop shop solution suggested by the EU Commission. 

While it should be a straightforward administrative process, VAT compliance in Bulgaria has its specifics, which need to be addressed carefully, also taking into account the costs involved. Outsourcing the VAT compliance to a dedicated professional VAT team with a good technology solution would provide the required assurance at reasonable cost levels.

Despite being harmonised with the EU VAT legislation, the Bulgarian VAT rules are still specific and provide for a number of procedures and reporting requirements. The VAT return package includes detailed lists of all sales and purchase documents with transaction details mapped to various VAT classifications. These are submitted monthly in a special “TXT” format in the Bulgarian language. Short filing and payment deadlines apply. Corrections of past periods are generally cumbersome, if allowed at all. 

Coupled with the strict control procedures of the Bulgarian revenue authorities, local VAT compliance puts forth many challenges for businesses, especially international companies which have no presence, but only maintain VAT registrations in Bulgaria. 

Businesses need to invest in expensive technical solutions to adjust their internal accounting systems for preparation of Bulgarian VAT returns and for issuing invoices according to the local requirements.

What is our solution?

KPMG in Bulgaria has a dedicated team of professionals taking care of all aspects of the local VAT compliance, from processing of transaction data to the required formats, issuing invoices, signing and submission of the VAT reports, to dealing with tax control procedures.

Our approach is based on three fundamentals:

Compliance and communication

KPMG in Bulgaria will aim to ensure that your company is operating in full compliance with the Bulgarian VAT rules, no matter what your business sector may be. We will tell you whether you need to register for VAT in Bulgaria or not and advise you on the relevant local VAT complexities that would come with transferring your international operations to Bulgaria. 

You will get ongoing practical advice on the company’s position in terms of VAT treatment, optimisation opportunities and potential risks.

 A dedicated compliance team will prepare and submit your VAT and Intrastat returns and issue local invoices where needed. Your Account Manager will ensure timely and swift communication with you and with the local tax office. 

KPMG in Bulgaria will be your face and assistant during tax control procedures.

Processes and technology

We understand that outsourcing an important financial function such as VAT compliance usually comes with many challenges. The specifics of the Bulgarian VAT rules may make it even more challenging. 

We combine our knowledge and practical experience to implement a secure and efficient compliance process aimed to best suit you needs. When processing your transaction data into the VAT reports, we run various internal checks and verifications aimed to eliminate errors and omissions. 

To ensure efficiency and risk mitigation, we rely on our proprietory VAT software. Designed by KPMG, it transforms the data provided by your accounting system into the Bulgarian VAT and Intrastat returns and may issue and record invoices and other tax documents, if needed.

Added Value

Our compliance team will be able to detect and inform you about implications that may arise from your operations in Bulgaria for corporate income tax, personal taxation, transfer pricing, etc. 

Whenever tax expertise in other jurisdictions is needed, we will work closely with our colleagues from the KPMG network in Europe or other countries.  

KPMG in Bulgaria monitors and regularly informs clients about important legislative changes, important administrative and court practices and the practice of the Court of Justice of the European Union.

Our VAT compliance services:

  • VAT registration/deregistration
  • Mapping and conversion of accounting data for Bulgarian VAT and Intrastat compliance purposes
  • Issuing of local invoices and other tax documents
  • VAT and Intrastat reporting
  • Ongoing advice
  • Communication with the local tax office
  • Complete assistance during tax control procedures
  • Regular updates on legislative changes and practices

 

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