As from 1 January 2026, Bulgaria has significantly changed the VAT treatment applicable to supplies of goods with installation or assembly carried out on its territory, in accordance with Article 36 of Directive 2006/112/EC1.
Before 1 January 2026: A Reverse Charge Mechanism
Until the end of 2025, these transactions benefited from a reverse charge mechanism provided for in Article 194 of the VAT Directive (transposed in Article 82 (2) 2. of the ZDDS (Закон за данък върху добавената стойност – Bulgarian Law on Value Added Tax) 20062).
How did it work?
- The supplier was established in another EU Member State
- The goods were supplied in Bulgaria with installation or assembly
- The customer was VAT-registered in Bulgaria
In this case,
- The Bulgarian customer accounted for the VAT via the reverse charge;
- The goods were supplied in Bulgaria with installation or assembly;
- The customer was VAT-registered in Bulgaria.
Which sectors were affected?
This mechanism was very common in:
- engineering
- industry
- construction
From 1 January 2026: Abolition of the Reverse Charge
Point 2 of Article 82 (2) has been deleted.
What is the new applicable VAT regime?
Now, the foreign supplier becomes liable for VAT on the sale with assembly or installation in Bulgaria.
What are the obligations for the supplier?
- VAT registration in Bulgaria is mandatory
- Invoicing Bulgarian VAT (20 %) on the supply of goods with installation in Bulgaria
- Filing VAT returns in Bulgaria
Before / after 2026: What are the concrete changes?
| Items | Before 2026 | From 2026 |
|---|---|---|
| VAT Liable Party | Bulgarian customer | Foreign supplier |
| Reverse charge system | Yes | No |
| VAT Registration | Not required for the supplier | Mandatory |
| VAT Invoicing | Without VAT (reverse charge) | With Bulgarian VAT (20 %) |
| VAT Declaration | By the customer | By the supplier |
What are the practical consequences of these changes?
This change represents a shift in responsibility for VAT management: it moves from the customer to the supplier for supplies of goods with installation or assembly on Bulgarian territory. It also has an impact on businesses:
- Increase in administrative obligations
- Need to plan ahead for VAT registration in Bulgaria
- Adaptation of invoicing processes
- Increased risks in the event of non-compliance
In a context marked by frequent changes in national legislation and persistent differences in the application of VAT rules within the European Union, it is essential for economic operators to carry out a case-by-case analysis of their cross-border transactions.
Such an approach makes it possible to accurately identify the obligations regarding VAT registration, declaration and invoicing applicable in each of the Member States concerned, and to secure the VAT treatment of transactions in accordance with the local rules in force.
Need to be compliant in Bulgaria?
Do not let this reform impact your operations. Anticipate your VAT obligations now and secure your flows in Bulgaria with expert support.
Sources:
- eur-lex.europa.eu (French PDF) ↩︎
- dv.parliament.bg (in Bulgarian) ↩︎
Noémie Almot
Community Manager & Copywriter
Noémie is a specialised content writer at ASD Group. She creates and manages blog articles as well as news updates on our websites, with a focus on VAT, international taxes, customs operations, social regulations, and international trade. With her clear and educational writing style, she makes complex and technical topics easily understandable and relevant for businesses.
