In Bulgaria, the paid VAT on taxable supplies, imports, acquisitions subject to reverse-charge, is deductible if the purchases are directly related to the taxable supplies performed by the Bulgarian company.

The standard period for VAT refund is up to four and a half months. VAT to be refunded is deducted from the payable VAT over the succeeding three months. If there is still VAT to be refunded after that, it is recovered within 45 days after submission of the VAT return for the third month.

In general, recovery of VAT is denied in case the acquired goods and/or services are related to provision VAT exempt supplies, free of charge supplies or for activities other than the main economic activity of the person with some exceptions, goods or services intended for business entertainment purposes, etc. Recovery is also denied for the purchase, maintenance, repair and exploitation of a motorcycle or an automobile (with up to 6 seats), unless used exclusively for the performance of security and transport, taxi, rental, courier or driving lessons services, or for subsequent resale.

The authorities of the National Revenue Agency are entitled to deny a VAT refund in cases of non­compliance with the law by the direct supplier or their supplier in the supply chain, e.g. if those suppliers have not charged VAT within the statutory terms or they have not presented documents requested in relation to determination of their tax liabilities to the revenue authorities, etc.