E-invoicing is starting to catch on throughout Europe. Only government agencies in Bulgaria are mandated to receive e-invoices, but Bulgaria has opened a public consultation to mandate a clearance model for electronic invoicing for all contracting entities, imitating other European models like Italy or France.
Government officials in Bulgaria are looking into e-invoicing as one of the digital VAT-related incentives. They are moving toward digitizing their tax-related procedures to provide a more automated and practical framework for fiscal operations.
You will be expected to submit electronic invoices when transacting with other businesses. You must, therefore, be conversant with the B2B e-invoicing laws and regulations.
So, what are the requirements for B2B e-invoicing in Bulgaria? In this article, we'll examine the Bulgarian E-invoicing status.
We hope that this will assist you in navigating the complex international electronic invoicing system in Bulgaria.
Is e-invoicing mandatory in Bulgaria?
In Bulgaria, B2B e-invoicing is currently voluntary. This implies that prior to using electronic invoices, contracting entities must reach a consensus among themselves.
Bulgaria follows the post-audit approach and only requires specific VAT reporting procedures, along with the receipt and processing of invoices from parties engaged in business-to-government transactions.
However, the Bulgarian government announced that it had considered proposals to introduce mandatory e-invoicing in the country. It will transition B2G e-invoicing from a regional role to a nationwide role.
This will help businesses capitalize on the advantages of e-invoicing on a national scale. Therefore, any contracting parties will need to generate, transmit, and receive organized electronic bills—even when interacting with private enterprises.
Timeline for e-invoicing implementation in Bulgaria
Understanding the implementation timeline is critical for a seamless transition to e-invoicing. To help companies prepare for upcoming changes and timing, Bulgaria is adopting a phased approach to e-invoicing.
As of October 18, 2018, Bulgaria can implement e-invoicing based on European standards according to LASPPA, which is an amendment to the Public Procurement Act (PPA) This act applies at all levels of government, including central, regional, municipal and employee, authorities and organizations.
LASPPA undertakes to meet the transfer requirements of the e-invoice Directive by developing the Central Automated Information System for Electronic Public Procurement (CAIS EPP). The platform aims to be a nationwide electronic public procurement system.
LASPPA states that every user should be aware of any changes made to their profile. CAIS EPP notifies users about the status of incoming and outgoing invoices in a customer profile, making it easier for users to track them
The Bulgarian National Revenue Agency has announced several other e-invoicing services over the last few years. Among other things, the COVID-19 pandemic certainly had an impact on the introduction of comprehensive regulation and e-invoicing.
Since November 1, 2019, all contracting local authorities have been mandated to receive and process electronic invoices for payment under public procurement contracts in accordance with the new State Gazette (SG) 86/18 Article 115a.
This is being done in order to put the European electronic invoicing standard into effect and comply with Directive 2014/55/EU.
On May 2, 2020, the CAIS EPP was updated, and the Bulgarian PPA upgraded the program to the second edition. Several initiatives were implemented to improve communication between public and private institutions.
The most notable of these steps is the anonymity of candidates for business competitions. The system has three distinct user types:
- Economic operator, the default option
- Contracting entity
The establishment and management of the CAIS EPP fall under the purview of the Public Procurement Agency. It established a dedicated website with compliance guidelines.
The implementation date of the electronic transaction procedure for contract negotiations, orders and payments is July 1, 2020.
CAIS EPP has sole authority to terminate proceedings relating to participation in accordance with the Competition Safety Commission procedure. The implementing rules of the Public Procurement Act state that the platform is used to record and disseminate communications between clients, contractors, applicants and stakeholders
Invoices sent electronically must be kept for six years and signed electronically by the applicant.
As for SAF-T, the NRA specifically announced on July 4, 2022, that it would begin a 24-month mission. The European Union is helping to implement the project.
Then, on August 10, 2022, the NRA released version 11.02 of the tool developed for generating VAT reports, VAT returns, and VAT Information Exchange System (VIES) returns.
The Tax Department has also released an updated publication containing the recently adopted VAT amendments. The revised version became effective on September 7, 2022.
The NRA is still considering making e-invoicing mandatory. It is consulting with industry stakeholders to draft a proposal.
As a result, details about the system are currently lacking, but they should be released soon.
What are the requirements for e-invoicing in Bulgaria?
Navigating the regulatory environment can be challenging. However, there are particular requirements that companies fulfil in order to comply successfully with Bulgarian e-invoicing laws.
In Bulgaria, e-invoicing is voluntary; therefore, bilateral agreements between business owners and government agencies form the system's foundation. An invoice is due five days after a taxable supply, and payment is due five days after the invoice is received.
Components of an electronic invoice
- The issue date.
- The word "invoice".
- The invoice's distinct sequential number.
- Any reverse charge supply should include a notice that a reverse charge is applicable along with the recipient's VAT identification number.
- Full name, address, and VAT number of the supplier.
- Complete the customer's name, address, and VAT number (for supplies other than reverse-charge supplies).
- An explanation of the kind and quantity of items provided or the type and scope of services offered.
- Date of transaction, or, if not the same as the invoice date, payment date.
- The amount due and the applicable rate of VAT.
- Unit cost of products or services, excluding tax, markdowns, and refunds (unless already factored into the unit cost).
How to verify the authenticity of an e-invoice in Bulgaria
Businesses must make sure that e-invoices are legitimate. Here's how Bulgarian businesses may ensure the integrity of their financial transactions by confirming the legitimacy of electronic invoices:
- Electronic signature: upon receipt, the buyer must validate it.
- Electronic Data Interchange (EDI)
- Any additional audit trail for business controls
What are the digital reporting requirements in Bulgaria?
Beyond e-invoicing, businesses in Bulgaria must comply with digital reporting requirements.
Article 125 of the VAT Act, passed in 2006, requires Bulgaria businesses to submit sales and purchase registers in addition to VAT returns.
January 2018 saw the mandatory electronic filing of the VAT return and the sales and purchase registries. The only modifications made to this VAT reporting requirement are related to the invoice data transmission technique.
In Bulgaria, all taxable people registered for VAT, including non-resident enterprises, must file sales and purchase registers.
Range of requirements:
- All transactions, irrespective of their amount (i.e., there is no threshold).
- B2G, B2C, and B2B.
- Purchases and sales.
- Domestic, within-EU, and outside-EU trade.
- There is a monthly reporting frequency.
- Information reporting (semantic).
- Data reporting needs to be done transaction by transaction.
- The invoice needs to contain the following information: (Date of invoice or number of invoice, Nature of the deal, Taxation rate, The taxable sum, Amount due for VAT, Name of trading partner (this field may be left empty), VAT number of a trading partner.)
- Syntax of the reporting format and embedded system.
- Data submission in TXT format requires the use of the tax authority portal.
Takeaway: Ensure e-invoicing compliance in Bulgaria with Storecove
The invoicing process in Bulgaria may become complicated by installing continuous transaction controls (CTCs) methods like the clearance model.
It might be challenging to maintain compliance when faced with new requirements. This is where Storecove comes into play.
Storecove offers electronic invoicing services globally, assisting individuals in adhering to pertinent e-invoice laws in nations where they conduct business, such as Bulgaria.
You only need one integration with Storecove to meet your global e-invoicing requirements. Unlock the freedom to send and receive electronic documents anywhere in the world without having to worry about local compliance issues related to electronic invoicing.
The service ensures your invoice is sent to the appropriate tax authorities for authorization, complies with technical and regulatory standards, and is securely delivered to your customer. You can concentrate on your core business operations while we handle the bureaucracy.
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