Mandatory VAT registration for an individual
Mandatory VAT registration for an individual
Question:
Hello!
I have an ETSY account from which I sell old items as an individual. I am not registered under the Commerce Act, but I submit a declaration under Art. 50 of the Personal Income Tax Act as an individual carrying out commercial activity without registration and pay the relevant taxes. My questions are as follows:
1. I am not registered under Art. 97a of the VAT Act. The invoices I receive from Etsy for fees and commissions include VAT. Is it considered by the NRA authorities that I have so far damaged the state budget by not paying this VAT in Bulgaria?
2. When submitting an application for registration under Art. 97a now, well after the 7-day period has expired, in addition to a penalty for not submitting an application on time, will I also be subject to penalties under Art. 180 or Art. 180a of the VAT Act and under which of the two articles will these sanctions be?
3. I understood that after submitting an application for registration under Art. 97a of the VAT Act, a check of the person for the previous period is carried out. What does this check cover and for what period is it?
4. Until now, the commercial activity has been carried out without a cash register. Am I obliged to have one as a sole proprietor? During an inspection, do the NRA authorities impose fines or property sanctions for the fact that sales are carried out by an individual without registration as a trader sales without a cash register and under which article of which normative act are these sanctions, respectively, in what amount?
5. After registration under Art. 97a, when calculating VAT, are the amounts that are charged paid into the state budget or are they deducted and in practice nothing is paid, i.e. is the final result for the state budget zero?
6. When checking an individual not registered as a trader, do the NRA authorities recognize the expenses incurred in connection with the activity on Etsy - for fees and commissions, for postage and packaging. Because I deducted these expenses when submitting the declaration under Art. 50 of the Personal Income Tax Act?
7. During part of the activity on Etsy, I also worked as a craftsman /watchmaker/, as the craft activity has nothing to do with the activity on Etsy and I paid patent tax for it. I specify that I was a pensioner during the entire time of carrying out the commercial and craft activity. On what amount are the 8 percent for health insurance calculated - only on the income received from Etsy or is it considered together with the income from the craft activity?
8. During part of the period in which I carried out the commercial activity, I worked in France under an employment contract and insurance was paid there in full. Can these social security contributions be deducted from my income as a sole proprietor in Bulgaria when I fill out the declaration under Art. 50 of the Personal Income Tax Act and if so, will the deduction be in full or will only the health insurance contributions in France be deducted?
Thanks in advance!
Answer:
Hello,
Directly to your questions:
1. The National Revenue Agency will have the right to demand that you charge and pay this VAT in Bulgaria
2. And under Art. 180 or Art. 180a of the VAT Act there is a paragraph that excludes the imposition of these fines in cases where no tax has been charged, since the person is not registered for VAT. As a result, you will not be subject to sanctions under the articles of the VAT Act you mentioned.
3. After submitting an application for registration under Art. 97a of the VAT Act, a check is carried out for the current and previous year.
4. Since you are not a registered trader, you cannot have a cash register and accordingly you do not suffer sanctions for this.
5. When registering under Art. 97a, you are not entitled to a tax credit and accordingly VAT is charged and due without the right to deduction/offset.
6. Since you are not a registered trader, the only expenses that are recognized for you are for the purchased goods and for due social security contributions. All other accompanying expenses are not recognized.
7. Social security contributions should also be charged on the income from Etsy - in your case - 8% health
8. Insurance from the employment contract in France cannot be recognized as an expense on income from Bulgaria.
We hope that we have been useful to you!
Greetings!
