The VAT protocol: how you self-charge Bulgarian VAT, and when it applies

What a VAT protocol is, and why you issue it to yourself

VAT (value added tax) is normally charged by the supplier: they issue an invoice with the tax included, and you pay it along with the price. But when the supplier is not VAT-registered in Bulgaria, they cannot physically charge Bulgarian VAT on their invoice. The obligation then shifts to you, the recipient, through a mechanism called reverse charge, sometimes described as self-billing for VAT purposes.

• A protocol is a document you issue yourself, with no input from the supplier. In effect, you self-invoice the VAT charge owed to the NRA (Bulgaria's National Revenue Agency, in Bulgarian НАП).
• The legal basis is Article 117 of the Bulgarian VAT Act (in Bulgarian ЗДДС). It lists the specific situations where a VAT-registered person must issue a protocol instead of relying on a supplier invoice that already carries the tax.
• The protocol does not replace the supplier's invoice. It is an additional document through which the Bulgarian side settles its own tax obligation inside Bulgaria.
• The whole mechanism exists so that VAT ends up in the budget of the country where the goods or service are actually consumed, even when the supplier has no registration there.

If you have ever received an invoice from Google, AWS, a supplier in Germany, or a freelancer in Ukraine with no Bulgarian VAT line on it, chances are a protocol is exactly what is missing on your side.

When you actually need one: intra-EU acquisition, foreign services, domestic reverse charge

The protocol requirement is not triggered by every purchase from abroad. It applies in a few clearly defined cases.

• Intra-EU acquisition of goods (in Bulgarian, ВОП). This is a purchase of goods from a supplier VAT-registered in another EU member state, where the goods physically arrive in Bulgaria. Example: a Bulgarian company buys office equipment from a supplier in Poland, and the goods are shipped to a warehouse in Sofia. The legal basis is Article 13 read together with Article 84 of the VAT Act.
• Services from a supplier outside Bulgaria, where the recipient is liable for the tax. Under the general B2B rule for services (Article 21(2) of the VAT Act), the place of supply is where the recipient is established. If the supplier, whether from the EU or a non-EU country, is not VAT-registered in Bulgaria, the obligation to charge the tax falls on the Bulgarian recipient under Article 82(2). Typical examples: advertising bought on a foreign platform, a consulting service from a foreign contractor, a software subscription billed from outside the EU.
• Certain domestic reverse-charge supplies. In a handful of specific domestic cases, such as supplies of certain waste materials or real estate transactions where the parties opt for taxation, Bulgarian law also requires the recipient, not the supplier, to issue the protocol.

The common thread across all three: the invoice you receive usually carries no Bulgarian VAT, because the supplier is not legally charging it. The protocol is how the tax still reaches the budget.

The protocol both charges and deducts the tax at the same time

One of the most confusing parts for small-company owners is that a single protocol does two things at once, not one.

• First, the protocol charges output VAT, as if your own company were the supplier of the goods or service. That tax is owed to the NRA for the relevant period.
• Second, if you are entitled to input VAT credit on that purchase, meaning it is used for your taxable business activity, the same protocol is also how you exercise that right to deduct the VAT as input credit.
• When a company has full deduction rights, the result is often a zero cash effect: the output VAT charged and the input VAT deducted offset each other within the same VAT return. The obligation still has to be declared correctly, even if the net cash impact is nil.
• If the deduction right is partial or absent, for instance because the goods or service is also used for VAT-exempt activity, the charged VAT remains owed in full or in part, without a matching deduction.

This is why the protocol is not a rubber-stamp formality. It is the actual moment the tax liability arises and, where you are entitled to it, the moment it is deducted right back in your favor.

Required fields and the 15-day issuance deadline

Article 117(2) of the VAT Act lists what every protocol must contain to be valid in the eyes of the NRA.

• A sequential number and the date of issue.
• The name and VAT identification number of the person issuing the protocol, meaning your details as the recipient.
• The legal basis for issuing it: which exact provision (Article 82(2), Article 84, or another) makes you the one required to draw up this document.
• A description and quantity of the goods or service, plus the date of the taxable event or of payment, if payment happens before delivery.
• The taxable base, the tax rate (usually 20 percent), and the amount of VAT charged.

The deadline is clearly set: the protocol must be issued within 15 days of the date the tax became chargeable, meaning the date of the taxable event or of the advance payment, whichever comes first. Missing that deadline does not cancel the obligation to charge the tax, but it creates a risk of interest charges and a mismatch between the period the tax should have been declared in and the period it actually was.

How the protocol enters the VAT returns, and what happens if you get it wrong

A protocol is not a standalone document that just sits in a folder. It feeds directly into the monthly VAT returns.

• The output VAT charged through the protocol goes into the sales ledger for that period, even though the company has not sold anything to a third party. Technically, the protocol is treated as a "sale to yourself" for reporting purposes.
• If you are entitled to deduct, the same protocol also goes into the purchases ledger, either in the same VAT period or within the following twelve months.
• For intra-EU acquisitions, the protocol has a third dimension: the transaction must also show up in the VIES statement, the system through which EU tax administrations exchange this information with each other.
• If you find an error after issuing a protocol, say a wrong taxable base or rate, the law requires issuing a new, corrective protocol that explicitly references the number and date of the original. You do not edit an old protocol, you issue a new one for the correction.

Discipline pays off here: a missing or late protocol for an intra-EU acquisition or a foreign service is one of the most common findings in a Bulgarian tax audit, precisely because the supplier's invoice looks perfectly fine on its own, just without Bulgarian VAT on it.

The protocol is just one of several required accounting documents

The VAT protocol is a natural extension of primary accounting documents in general: just as an invoice evidences a supply between two parties, a protocol evidences self-charging when the supplier cannot do it for you. Useful next reads:

How VAT and tax filing will work with FreeMe.bg
How to issue an invoice: requirements and practical tips
When you actually need an accountant or a VAT consultant
Invoicing an EU client: what needs to be on it and why

FreeMe.bg tracks your purchases from abroad and flags when a given transaction needs a protocol, instead of leaving you to catch it at the last minute. Log in with your Google account and keep your books in one place.