Intra-community supplies of goods
Using your company in Bulgaria, you are able to perform intra-community supplies of goods.
The intra-community supplies of goods are taxed with a zero rated VAT.
- Both the Bulgarian company (the supplier) and the customer must have a valid European intra-community VAT code;
- The transport must be done from Bulgarian territory to the territory of another EU member state;
- You need a document for the transport - a CMR, signed by the sender, the carrier and the consignee (the buyer);
- The reality is that the Bulgarian tax administration also requires further proof of the transport, for example a receipt for the fee for the bridge, which is paid when crossing the border to Romania.
In a similar manner the Bulgarian company may buy goods without VAT from all other countries from the EU, if the goods are transported to Bulgaria.
New rules for proving the intra-community supply of goods from 2020
Intra-community supply of goods is the sale of goods to a company in another member state of the European Union, which is registered for VAT, and the transport is carried out from the territory of Bulgaria to the territory of the other country.
From 2020, new requirements have been introduced at the European level to prove the intra-community supply of goods in accordance with the right to apply a zero VAT rate. They require that we have confirmation of delivery from two independent persons other than the seller and the buyer. If the transport is performed by the seller or the buyer, this is not accepted for confirmation by an independent party. Therefore, if the transport was done by the seller or the buyer, the intra-community supply of goods will be difficult to be proved.
From 2020, new requirements have been introduced at the European level to prove the intra-community supply of goods in accordance with the right to apply a zero VAT rate. They require that we have confirmation of delivery from two independent persons other than the seller and the buyer. If the transport is performed by either the seller or the buyer, this is not accepted for confirmation by an independent party.
It is also necessary to determine which side organizes the transport – the seller or the buyer. The required documents in these 2 cases are basically the same, but if the transport has been organized by the buyer, then we need also a declaration of receiving goods signed, by the buyer.
Usually, the first confirmation is:- by the transport company which signs the CMR and which must be different from the seller and the buyer, or
- if the delivery is made by a courier, instead of CMR we need a bill of lading from the courier company and a declaration of receiving (written confirmation of receipt) from the buyer. In addition to CMR (respectively bill of lading + declaration of receiving), we need 1 more document. In case the transport is done or paid by the buyer we must have a declaration of receiving from the buyer, CMR (or bill of lading), and another document.
- The invoice from the transport or the forwarding company to which the transport is paid, if different from the transport company that signed the CMR.
- Bank document for payment of the transport or courier company - the independent person who confirms the payment is the bank.
- Receipt for the paid fee for Danube bridge near Ruse - if the recipient of the goods is in Romania. The receipt proves that the goods have passed from Bulgaria to Romania. The number of the car, which is also recorded in the CMR, must be recorded in the receipt for the paid fee. Instead of a receipt from the bridge, we can have an invoice from a ferry to cross the Danube. On the Danube Bridge near Vidin, the number of the vehicle is not recorded in the receipt and does not give us any proof.
- Insurance/cargo policy for transported goods.
- Warehouse receipt from a warehouse, if the recipient of the goods does not accept them in his own warehouse, but in a public warehouse or a warehouse of a logistics company.
- Confirmation of receipt of the goods by a notary or other public authority.
It is necessary to determine which side organizes and pays for the transport - the seller or the recipient. If this is the consignee, it is more difficult to prove the intra-community supply of goods.
If the buyer has organized the transport, we must have:- A declaration of receiving of the goods from the buyer and
- A CMR and a bill of lading.
- We must have a document that is not ours, but the buyer's, as an invoice from the transport company, a bank document for payment of transport, receipt for the paid fee for Danube bridge.