I sell services to customers abroad — who charges the VAT?

What does the law say?

The two basic rules. For a service supplied to a taxable person, the place of supply is where the customer has established its business (art. 21(2) of the VAT Act). For a service supplied to a non-taxable person — a consumer — the place is where the supplier is established (art. 21(1)). There are also exceptions that shift the place regardless of the customer's status: services connected with immovable property, transport, short-term hire of means of transport, telecommunications and electronic services supplied to consumers.

The reverse charge. On a supply to a company in another Member State you issue an invoice without VAT charged, stating the grounds and the wording for the reverse charge; the tax is due from the customer. Conversely, when you receive a service from a foreign person, you self-charge the VAT as the recipient.

Registration under art. 97a has no threshold. It is mandatory even at zero turnover — both when supplying services to a taxable person in the EU and when receiving such services. The application is filed no later than 7 days before the tax on the supply becomes chargeable. This registration is limited: it does not make you a registered person for domestic supplies and it does not give you the right to an input VAT credit.

The VIES return. It is filed by the supplier for services to taxable persons in the EU and for intra-Community supplies of goods, by the 14th day of the following month, together with the VAT return. If you only receive services from the EU, no VIES return is filed.

Customers outside the European Union. Services to non-EU countries do not give rise to an obligation to register under art. 97a — it covers relations within the Union. Where the customer is a company, the place of supply is again at the customer, that is, outside the scope of Bulgarian VAT, and no VIES return is filed. Where the customer is a consumer outside the EU, a number of intangible services — consultancy, legal, accounting, data processing, the supply of software — also have their place of supply outside the Union.

Sales to consumers in the EU. Here the threshold of 10 000 € for the Union as a whole applies. Above it the tax is due under the rules of the customer's country and is usually administered through the One Stop Shop scheme, instead of a separate registration in each country.

The new small enterprise scheme. From 1 January 2026 a Bulgarian company with an annual turnover in the Union of up to 100 000 € may voluntarily use the exemption in other Member States as well, without registering in each of them. It receives an identification number ending in "EX" and files quarterly turnover reports.

What should you check for each supply?

1. Who the customer is — a company with a valid VAT number or a consumer. Checking the number in the VIES system is part of the evidence.
2. Where it is established — in the EU or outside it.
3. What the service is — whether it falls within one of the exceptions to the place of supply.
4. Whether you are registered on the appropriate grounds — and that before the first such supply.

What goes wrong most often?

• An invoice without VAT to a company in the EU, without registration under art. 97a. The most common case among freelancers and IT — the tax is then due from the supplier.
• The forgotten receipt of services. Advertising on Facebook or Google, a software subscription from Ireland — each of these gives rise to the same registration obligation.
• A VAT number that has not been checked. If the customer's number is not valid as at the date of the supply, the reverse charge does not apply.