Apartment for rent

Apartment for rent

 

Question:
Hello!

I am a private person with permanent residence outside the territory of the Republic of Bulgaria. I am the owner of an apartment in Sofia, which for the time when I am not in the country (ie I partially use) I rent through the online platforms Booking, Airbnb and others. The rent of the apartment is for a short period - 2 and more nights. The guests are usually foreign or Bulgarian citizens. The income from overnight stays is received by bank transfer, as the difference between the price paid by the client and the commission that the site withholds.

On the occasion of the amendments to the Tourism Act of 25.02.2020. and the inclusion of guest rooms and guest apartments as a tourist site - accommodation, legal and factual actions should be taken to ensure the rental of real estate in compliance with Bulgarian legislation.

I have the following questions:

1. As far as I know, the accommodation places are subject to mandatory registration in the respective municipality at the location of the property. The registration will be carried out by the order of a special Ordinance.

2. Do I need to register under Article 97a, paragraph 1 of the VAT Act as a recipient of a service from a foreign person (AIRBNB, etc), and if so, what is included in the sales and purchase diary on a monthly basis?

3. Is 20% VAT due on the commission on the site, ie. on the service received?

4. Is 9% VAT due on overnight stays?

Thanks in advance!

 

Answer:

Hello,

Directly to your questions:

1. Once you offer accommodation, it is mandatory to have a categorization. The categorization is done after entering the necessary documents to the respective municipality. Accordingly, you will owe a tourist tax, which is again determined by the municipality itself, based on the nights spent. We enclose a link to the Ministry of Tourism and to the Sofia Municipality with more detailed information on the procedure and the requirements for categorization:

http://www.tourism.government.bg/bg/kategorii/uslugi-v-turizma/kategorizirane-na-mesta-za-nastanyavane

https://usl.sofia.bg/ePortal/pages/text/service-details.jsf;jsessionid=32B8FD7BDB4B827304D8EDEA5F9BC1B2.apps01?serviceId=296

2. The registration on the grounds of art. 97a of the VAT Act is mandatory. The sales log includes the protocols for VAT charged on the received service.

3. Continuing our answer in item 2 - yes, 20% VAT is due on the value of the services received from persons outside Bulgaria, as this is declared.

4. If your VAT registration is only based on Art. 97a (ie you have not reached a turnover of BGN 50 thousand, which requires registration under Article 96), it is not due VAT on sales.

We hope we have been helpful to you.

Greetings!