GP - self-assessment of VAT

GP - self-assessment of VAT

 

Question:

Hello!

I would like to ask if my Bulgarian company is VAT registered in Bulgaria and I buy materials from Germany without reselling the materials in question, and use them as an inventory of my company, using them for my work process, should I pay VAT of the invoice I will receive from the German company. The German company from which I will buy the materials gives me the option to sell the materials to my company without paying VAT, provided that they provide them with a valid Vat ID of my company in Bulgaria. But when I receive the materials, do I have to pay VAT on these materials in Bulgaria as long as they remain in my company, without reselling them, and only renting a part of them to my clients? Do I have to declare each year that these materials are available to me until they fade in and out?

Thanks in advance for your reply!

 

Answer:

Hello,

When performing a GP (Internal Community Acquisition), you receive an invoice from a VAT-free provider (only after you have provided your VAT number). In this case, your company is obliged by a protocol to self-assess 20% VAT (Article 84 of the VAT Act). The record is entered in the sales log. If you are a registered company on grounds other than Art. 97A, Art. 99 and Art. 100, para 2, (members for which you are not entitled to a tax credit) your company is entitled to a tax credit and this self-assessment protocol is included in the purchase logs. So in practice you charge 20% VAT, but you do not pay it. If you sell these materials and do not use them in your business, then you will be charged 20% VAT on the sale.

We hope we have been helpful.

Greetings!