Refund of VAT to a grocery store

Refund of VAT to a grocery store

Question:
Hello!
I have a small grocery store. I currently pay BGN 400 per month in VAT. I am not sure if I am entitled to a VAT refund and in which cases? Monthly turnover about BGN 22,000, of which BGN 8,000 is from cigarettes.
Thanks in advance!

Answer:
Hello,
In theory, once you are registered for VAT, you owe 20% VAT for the sales you make. In addition to this obligation, VAT registration gives you the right to reclaim VAT that is included in the invoices of your purchases, as long as they are related to your business. When the VAT on sales exceeds the VAT on purchases, you deduct the VAT on purchases from the VAT on sales and pay the difference to the State Budget. If the VAT on purchases in a given month exceeds the VAT on sales, you are left with a difference that is to be reimbursed by the State Budget. This refund amount can be deducted in the next 2 months from the input VAT. If during these 2 months the VAT to be imported is lower than the VAT you have to deduct, an inspection is carried out by the National Revenue Agency covering these three months. If everything is found to be in order, they refund you this VAT.

Using the amounts you have given, with a monthly turnover of 22,000 (this is an amount including 20% VAT), you owe the state BGN 3,666.67 VAT. After paying only BGN 400.00, this means that you have made purchases with 20% VAT included worth BGN 19600.00 including VAT, on which you have exercised your right to deduct BGN 3266.67 VAT. In the end, after you have deducted from the VAT you owe on sales (BGN 3,666.67) the VAT on purchases with VAT (BGN 3,266.67) and you have paid BGN 400.00.
We hope we have been helpful!
Greetings!