Registration and deregistration under the VAT Act of a natural person after the turnover has been reached

Registration and deregistration under the VAT Act of a natural person after the turnover has been reached

 

Question:

Hello!

My question is about online trading.

The turnover from 05.May 2020 to 06.May 2021 is BGN 53,000.00 (imposed payments from shipments through the courier company Econt) with personal belongings included, which I am not aware of whether they are deductible.

Mandatory VAT registration is required here.

Probably here the amount of BGN 50,000 will be taxed with 15% profit tax and BGN 3,000 with 15% profit tax + 20% VAT.

My question is for the next reporting calendar year (12 months) 06.05.2021 to 06.05.2022, if the turnover is BGN 40,000.00, will I have the right to terminate the VAT registration?

Thanks in advance!

 

Answer:

Hello,

You have correctly orientated yourself that upon reaching a turnover of BGN 50,000 for a period not longer than the last 12 months, you are subject to mandatory VAT registration. If you register on this basis, you can deregister at the moment when the basis for registration ceases - ie. the turnover for the last 12 months falls below BGN 50 thousand. In reality, this circumstance can occur almost immediately after registration (for example, next month). However, you should keep in mind that after you deregister, you will have to keep track of your turnover, as you may reach the registration turnover again.

Regarding the VAT due - you will start charging and paying VAT only after the date of registration. Ie for sales before VAT registration you will not owe VAT. The only exception is if you missed the deadline for mandatory registration, then you will owe VAT retroactively with interest included, on the turnover which is over BGN 50,000.

We hope we have been useful to you!

Greetings!