VAT audit in Bulgaria: when it happens and what to do

Check or full audit: not the same thing

The National Revenue Agency (NRA) is Bulgaria's tax authority, responsible for administering taxes and social security contributions, including value added tax (VAT), corporate income tax, and social insurance. When the NRA reaches out to your company, it is using one of two tools that differ in scope and consequences.

• A routine check (проверка): a lighter, faster mechanism, usually aimed at a specific document, return, or period, for example verifying a single VAT refund claim or one invoice. It does not require a formal audit order and ends with a short protocol.
• A full tax audit (данъчна ревизия): a comprehensive review of a company's tax obligations for a defined period, typically covering several months or years. It requires a formal order, follows strict deadlines, and ends with two formal documents: an audit report and an audit act.
• An audit is the tool that creates a new payable obligation or corrects a declared one. A routine check usually just establishes facts or is a preliminary step toward a decision on a return you already filed.

In short, every audit follows a stricter procedure than a routine check, but not every check grows into an audit.

What typically triggers a VAT audit

In most cases the NRA does not select companies for a full audit at random. Certain signals raise the risk noticeably.

• VAT refund claims: when you declare VAT to be refunded rather than paid, especially for a larger amount, the NRA commonly verifies the basis before releasing the money. This often starts as a routine check but can escalate into a full audit if something does not add up.
• VIES mismatches: VIES is the EU system that exchanges VAT information between member states. It flags discrepancies between the intra-community supplies and acquisitions your company declares and what your counterparts in another EU country report on their side. A mismatch here is a frequent automated trigger.
• Inconsistencies in the purchase and sales ledgers: if an invoice a supplier reports is missing from your purchase ledger, or the reverse, the NRA's cross-check catches it fairly quickly.
• High-risk sectors: construction, wholesale fuel trading, restaurants, and freight transport traditionally draw more attention because of a historically higher rate of irregularities in those industries.
• Random selection under the NRA's annual control plan, with no specific trigger, though in practice this is the less common reason.

If your company falls into none of these categories, the odds of a full audit are low, though not zero. Consistent, accurate documentation remains the best defense regardless of the trigger.

How the audit unfolds, step by step

A tax audit follows a fixed procedure under the Tax and Social Insurance Procedure Code (in Bulgarian, ДОПК), the code that governs how the NRA administers taxes and social contributions.

• Audit assignment order (заповед за възлагане на ревизия): issued by a revenue authority, it defines the scope (which taxes and which period), names the audit team, and sets the deadline. It is served on the company so there is an official record that the audit has started.
• Gathering documents and explanations: the company provides invoices, contracts, bank statements, protocols, and anything else the auditors request. The NRA can also ask the manager or accountant for written or in-person explanations.
• Audit report (ревизионен доклад): a document in which the audit team lays out its findings, including any proposed additional liability or denied VAT credit. The company has the right to file a written objection to the report within a statutory deadline.
• Audit act (ревизионен акт): the final document that sets the actual amount owed, if any. This is the document you appeal, not the report. It is issued by the competent revenue authority based on the report and any objections filed.

Each step comes with its own document and its own response deadline, so it pays to check your mail, including the NRA's online portal, throughout the entire process.

Timeframes, rights, and obligations during an audit

The duration and framework of an audit are set out in ДОПК, though the actual deadlines can vary with the complexity of the case, so it is worth checking the exact dates in your own assignment order rather than assuming a generic timeline.

• The company has the right to be formally notified when an audit starts, what it covers, and who is on the audit team.
• You have the right to submit documents and written explanations, to use a lawyer or accountant as your representative, and to receive a copy of the audit report before the audit act is issued.
• You have the right to file a written objection to the findings in the report, within the deadline stated in the report itself, before the audit act is issued.
• You are obligated to cooperate with the audit team: provide requested documents within a reasonable time and not obstruct access to accounting records relevant to the audit's scope.
• Refusing or delaying cooperation does not stop the audit. Instead, it gives auditors grounds to rely on the information they already have and on indirect methods to estimate the tax base, usually to the company's disadvantage.

Active participation, not silent waiting, is the surest way to influence the outcome.

How to prepare, and how to appeal an audit act

The best preparation for an audit is the one you do before you ever receive the order, not after.

• Keep invoices organized by period and matched against bank payments. A mismatch between an invoiced amount and a bank statement is one of the first things auditors check.
• Keep the self-charging protocols required under Article 117 of the VAT Act (ЗДДС) for intra-community acquisitions and services received from abroad. A missing protocol next to an otherwise clean invoice is a common reason for an adjustment.
• Keep contracts and delivery acceptance protocols for larger service purchases, not just the invoice. An invoice with no supporting proof that the service actually happened is weak defense in an audit.
• If you receive a document request during an audit, respond by the deadline with a cover letter describing exactly what you are submitting. That creates a paper trail showing you cooperated.
• If you disagree with the findings in the audit act, appealing runs through two stages: first an administrative appeal to the director of the NRA's Appeals and Tax-Insurance Practice directorate, and if that decision does not satisfy you, a court appeal before the administrative court. Both stages run on statutory deadlines that start from the date the act, or the decision, was served on you.

Missing the deadline to object or appeal is one of the most common ways a company loses a dispute it otherwise had grounds to win.

An audit is easier when the books stay tidy all year

A tax audit rarely surprises a company with clean, consistent records. It surprises the ones scrambling to reconstruct documentation at the last minute. Here is more on staying tax-compliant as a small company.

Useful next reads:

Which expenses are deductible and how to document them
Working with an expert accountant through FreeMe.bg
How invoicing will work with FreeMe.bg
VAT registration in Bulgaria: when it is mandatory and when it is your choice

FreeMe.bg keeps your company's invoices, protocols, and expenses organized in one place, exactly the documentation auditors ask for first. Log in with your Google account and skip the last-minute scramble.