VAT Refund in Bulgaria — Procedure & Deadlines (2026)

When Does the Right to a Refund Arise

The right to a VAT refund is governed by Art. 92 of the VATA. The following prerequisites must be met:

1. VAT registration — only VAT-registered persons may exercise the right to input VAT credit and obtain a refund.
2. Negative result for the tax period — when input VAT exceeds output VAT, the result is “tax for refund” (Art. 88 VATA).
3. Inability to offset in the following two periods — under Art. 92(1), the tax for refund is first offset against VAT payable for the following two consecutive months. If any amount remains unabsorbed, it becomes eligible for refund.

Example: In January 2026, a company declares VAT for refund of EUR 25,000. In February, the VAT payable is EUR 8,000 (offset, leaving EUR 17,000). In March, the VAT payable is EUR 5,000 (offset from EUR 17,000, leaving EUR 12,000). In the March VAT return, the company declares EUR 12,000 for refund.

Refund Procedure

Standard Procedure (30 Days)

After the tax for refund has been unable to be offset during the two-month period, the NRA conducts a verification and issues a Set-Off and Refund Act (APA) within 30 days. If the person has other outstanding public liabilities, the refund amount is first set off against them.

Audit Procedure

The NRA may initiate a tax audit instead of a simple verification when:

• The refund amount is substantial (usually above EUR 50,000)
• The company is requesting a refund for the first time
• Discrepancies have been identified in the VAT returns
• Counterparties are associated with high-risk suppliers

The audit duration is up to 3 months, with the possibility of extension by an additional 2 months — a total of up to 5 months.

Conditions for Input VAT Credit (Art. 68–72 VATA)

To exercise the right to input VAT credit, the following conditions must be met cumulatively:

1. Valid tax invoice (Art. 71) — containing all requisites under Art. 114, with VAT indicated separately.
2. Goods/services are for taxable supplies (Art. 69) — used for making taxable supplies (at 20% or 9%).
3. The supplier has charged the tax (Art. 68(1)(1)) — by a VAT-registered person.
4. The 12-month deadline has been observed (Art. 72(1)) — the right must be exercised within 12 tax periods.
5. No restrictions under Art. 70 — not for gratuitous supplies, entertainment purposes, passenger cars (with exceptions), etc.

Required Documents

During the refund procedure, the NRA may request:

• Explanatory note — describing the business activity, reasons for accumulated input VAT credit, financing
• Primary accounting documents — purchase and sales invoices, protocols under Art. 117, bank statements
• Accounting reports — trial balances, general ledger, analytical account registers
• Contracts with counterparties — commercial, leasing, construction contracts
• Warehouse documents — acceptance protocols, goods receipts
• Power of attorney — if the company is represented by a third party

Common Reasons for Refusal

1. Defective invoices — missing requisites, invoices from unregistered persons, invoices issued by a “missing trader”
2. Fictitious supplies — the NRA determines the supply was not actually carried out
3. Goods/services not used for taxable activities — used for exempt supplies, personal purposes or gratuitous transactions
4. Missed 12-month deadline — the right to credit was not exercised within the statutory period under Art. 72
5. Chain transactions (Art. 177) — involvement in VAT fraud, even unknowingly (“carousel fraud”)
6. Restrictions under Art. 70 — passenger cars, entertainment purposes, gratuitous supplies

Accelerated Refund (Art. 92(3) VATA)

A special accelerated refund procedure exists on a monthly basis, without waiting for the two-month offset period:

1. Exporters — if zero-rate supplies amount to more than 30% of total taxable supplies over the last 12 months (Art. 92(3)(1)).
2. Agricultural producers — if taxable supplies of own produce amount to more than 50% of all taxable supplies over the last 12 months (Art. 92(3)(2)).

Under the accelerated procedure, VAT is refunded within 30 days of filing each monthly VAT return.

Practical Tips

1. Maintain impeccable documentation — every invoice should be supported by a corresponding contract, acceptance protocol and proof of payment.
2. Do not miss the 12-month deadline — carefully monitor when invoices were received and ensure timely inclusion in the purchase ledger.
3. Verify your counterparties — check whether they are VAT-registered and have genuine economic activity.
4. Prepare in advance for verification — systematize documents and prepare an explanatory note beforehand.
5. Set-off of public liabilities — check for unpaid taxes or fines against which the NRA will set off the refund.
6. Appeal in case of refusal — appeal to the director of the competent Territorial Directorate within 7 days of service (Art. 92(11)).
7. Interest owed by the NRA — for unjustifiably non-refunded tax, the NRA owes statutory interest.

Frequently Asked Questions

Conclusion

A VAT refund is a critical mechanism for companies making substantial investments, exporters applying a zero rate, and businesses with temporarily higher expenses than revenue. Understanding the procedure, deadlines and documentation requirements is essential for a successful refund.

If you need assistance with a VAT refund procedure or an NRA audit, the team at Innovires Legal can help. Contact us for a consultation.

This article is for informational purposes only and does not constitute legal advice. For specific questions regarding VAT refunds in Bulgaria, please consult a qualified professional.