Refunding of paid VAT to non-taxable individuals that are not established at the territory of the European Community

Legal regulation:

Value Added Tax Act – Art.81, Par.1, Item 3

ORDINANCE № H-12 On the Refund of Paid Value Added Tax to Non-Taxable Natural Persons Who Are Not Established on the Territory of EU

The ordinance sets out the procedure and the documents for reimbursing the accrued and paid VAT to foreign individuals for goods that they have purchase and exported from the territory of the country in their personal luggage for personal use without making any modifications.

Persons entitled to VAT reimbursement (conditions that define a person as a „foreign individual”):

Rights to claim VAT reimbursement have all the non-taxable individuals that have permanent residence outside the territory of the European Community.

For the purposes of tax reimbursement the following persons are not considered to be foreign individuals:

1. members of the diplomatic, administrative and technical personnel, specified according to Art. 1, letters „d” and „ f” of the Vienna Convention on Diplomatic Relations, as well as the members of their families;

2. consular positions and consular officials, specified according to Art. 1, letters „d” and „ е” of the Vienna Convention on Diplomatic Relations, and the members of their families;

3. members of the personnel of missions of intergovernmental organizations that are operating at the territory of the Republic of Bulgaria, based on an international contract concluded by the Republic of Bulgaria with the respective organization.

Prerequisites for the right for reimbursement

1. The foreign individual must export the goods outside the territory of the European Community without modifications not later than the last day of the third month, which follows the month when an invoice was issued for the received delivery. Goods without modifications are: all kind of motor vehicles, as well as any other goods that have not been used before the export according to their designation, except for testing purposes.

2. The provider of the goods is a person that as of the date of invoice issuing is entitled to sell goods with right to VAT reimbursement.

3. The amount of the tax according to a single invoice is equal to or exceeds BGN 50.

4. The right for tax reimbursement has been exercised not later than 6 months from the date of issuing and invoice for the received delivery.

5. The goods are not: alcoholic drinks, tobacco and tobacco products, and liquid fuels.


 Exercising the right for reimbursement and documents required

The VAT is reimbursed to the foreign individual through a person called „agent”, who acts on the behalf and at the expense of the foreign individual. In return of the reimbursement service the foreign individual pays the agent a commission fee in the amount stipulated by the parties. The foreign individual exercises his right for VAT reimbursement after submitting the following documents to the agent:

1. Certified by the customs authorities first and second copy of a request for reimbursing paid VAT, according to a form signed personally by the foreign individual. The request for reimbursement is filled in triplicate in Bulgarian, while the name, the surname, the passport number and the address of the foreign individual are filled also in Latin letters. For each invoice for which VAT reimbursement is required, a separate request shall be filled in which only the goods form the respective invoice that are being exported shall be described.

2. Certified by the customs authorities original copy of the invoice for the received goods that are exported outside the European Community and based on which reimbursement of the paid VAT is requested.

The certification of the abovementioned documents is performed by the customs authorities upon the request of the foreign individual.

With the submission of the aforementioned documents to the agent the latter is considered to be authorized by the foreign individual to exercise instead of him the right for VAT reimbursement.


Paying the tax to the foreign individual

When the agent receives the certified documents and verifies the fulfillment of all the conditions that give right for tax reimbursement, the agent pays to the foreign individual the reimbursable tax in BGN (Bulgarian levas). The payment is made when the foreign individual produces the documents or within another agreed term, but not later than the end of the month which follows the month when six months shall expire after the date of invoice issuing.

If the agent refuses to pay the VAT, he shall immediately return the received documents and notify the foreign individual about the reasons for refusing to pay the tax.