In line with the jurisprudence of the European Court of Justice, supplies of services made between EU companies and branches established in Bulgaria will now be outside the scope of Bulgarian VAT.
Bulgarian branches of foreign banks and insurance companies.
Until now, supplies of services between Bulgarian companies and their branches and vice versa were outside the scope of VAT only if they were performed at cost. Due to the amendment of the VAT legislation, Bulgarian branches of EU established companies will now no longer have to apply VAT under the reverse charge mechanism on invoices they receive from their head office or other branches for services performed. Even though the amendments to the VAT regulations explicitly refer to supplies of services between a company and a branch established in the EU, the logic of the ECJ jurisprudence should also be applicable where the head office or the branch is established outside the EU.
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