Bulgaria could be the next EU Member State to introduce continuous transaction controls (CTCs) following Italy, France and Poland. Introducing CTCs provides tax administrations with more granular and continuous visibility into tax-relevant business data.
Bulgaria announced it’s considering mandating e-invoicing and the transmission of invoices to the tax authority. This could be done either via a supplier’s e-invoicing software or software developed and hosted by the tax authority itself.
It’s not yet known if the transmission of data to the tax authority will be used solely for reporting or if there will be a clearing mechanism, in which case an invoice won’t be issued to the counterparty until it is cleared first by the tax authority.
The NRA, the Bulgarian tax authority, is reviewing their e-invoicing proposal with relevant industry stakeholders to decide whether to adopt a mandatory e-invoicing model. A decision about the adoption of a CTC scheme is expected by the end of the year.
In parallel, the NRA has proposed changes for digitizing the reporting process for the turnover of online retailers. The proposed changes will allow online retailers to send data directly to the NRA via registered software, as opposed to the current method of reporting turnover using cash registers. Currently under public consultation, these changes will come into force after being implemented in secondary legislation.
Although Bulgaria’s e-invoicing journey is in its infancy, it’s clearly part of the wider CTC trend in Europe.
It will be interesting to see how fast Bulgaria can catch up with the CTC plans of its fellow Member States, we’ll be keeping a close eye on developments.