- End of Reverse-Charge System: From January 1, 2026, foreign suppliers who deliver and install goods in Bulgaria must register for Bulgarian VAT and charge VAT on supply and install contracts, marking the end of the reverse-charge mechanism that previously allowed Bulgarian customers to self-account for VAT.
- New VAT Registration Requirements: Foreign businesses engaged in sectors such as engineering, industrial equipment, or construction will need to register for VAT in Bulgaria before commencing work. They will be required to issue Bulgarian VAT invoices and file local VAT returns, which necessitates updating invoicing systems and cash-flow planning.
- Impact on Operations and Compliance: This change means that Bulgarian customers will no longer self-account for VAT; instead, they will pay VAT directly to the foreign supplier. Suppliers should prepare for this transition by reviewing upcoming projects and ensuring timely VAT registration to avoid penalties for late compliance.
Source Meridian
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