Accounting for NONaccountants… Attention! What can go wrong with EU countries business?

 

 

It is a fact that our country became EU member few years ago, this provided wider markets for the Bulgarian companies with easier rules. Some modern words as „ICA“ (Intra-Community Acquisition) and „ICS“ (Intra-Community Supply), changed the well-known “import” and “export” as terminology for the third world countries :) The hole EU is released by VAT and… let the development of business starts NOW!

So far so good, but for everybody who is orientated to the external markets, it is not a bad idea to consider that you are making business with your Bulgarian company, which needs to comply to the Bulgarian legislation and not the European one. And just to note – we live in Bulgaria and the things are pretty much confused. We would pay attention to point only to few important moments:

Most of the business owners are aware that the threshold for VAT registration in Bulgaria is 50 000 BGN, but this does not apply when you work with the EU. According to the Bulgarian legislation – in the moment when you will know that you will have a deal, connected to receiving or providing a service to an EU taxable person, you need to register according to art. 97a of the VAT law up to 7 days before the documentation of the deal. The registration is made fast and easy within 3 days, and all sounds good, BUT there is a small detail – YES, the country allows you not to calculate the VAT, but also NOT to use the VAT of any of your expenses, which you actually made and paid! We believe that this negatively influences your business. Also, this registration does not eliminate your duty to follow your turnover in the last 12 months and if you have reached the above mentioned 50 000 BGN, to apply for the same registration, this time because of reached amount of the turnover. We think that this is out of any logic!

But as it is life, here we have other possibilities, it matter of thinking and help by an accountant! What we recommend to our clients who know that will work with EU is to make the registration by own will together with the establishment of the company. The positive consequences of this are:

  • The accounting tax for the registration is very low, as NRA require only few documents;
  • The Registration can be realized within 2 weeks;
  • You will be able to use the VAT of your expenses, so respectively to minimize the VAT that you need to pay, or simply wait 3 months and withdraw the accumulated VAT;
  • You will not need to follow the turnover, as you are already registered.

The negative consequences of this are:

You are not allowed to withdraw your VAT registration earlier than 2 years after the Registration was done. Or if you make the registration in June 2019, you cannot withdraw it by the end of 2021. And the turnover needs to be less than 50 000 BGN.

All the above mentioned is valid for legal persons and individuals as well! This only a part of one point connected to the work within the EU, because of that we advise you before making this perspective step to consult in details with an accountant!

If you are facing the decision to start working with the EU and you do not know who to talk to, we would be more than happy to help you and walk together with you this path filled with difficulties and opportunities, by offering you free of charge consultation!

 

Wishing you a very successful European year!

 

www.argia.bg

tel: +359 2 9950020

+359888420583 Magi Bogdanova

e-mail: magi_bogdanova@argia.bg

+359887853280 Galya Stoykova

e-mail: galya.stoykova@argia.bg

Accounting for NONaccountants… The new beggining!

The end of the year has come, this good for some people and for other – not. Let us assume that you are one of those for whom this is good! The best thing is that New year is coming with new dreams, new passion, new strength… Great – let’s use them for good (as sometimes they disappear very fast ;) ). Finally you are ready together with the new year to start your OWN business! Congratulations!!! Keep this volcano of enthusiasm that you are having right now and pay attention to few very important matters from the very begging.

  1. Creating a company – do not decide if your company will be limited liability company (OOD) or single-member limited liability company (EOOD) by the way it sounds to you, or by the advise of the neighbor. Discuss it with a lawyer and accountant, note it – and! This decision will determine how much you will pay for social security taxes to the country, in order your company to be in line with the law.

 

  1. VAT registration – again we ask you the decision not to be made according to the mentioned above criteria or because of prestige, interpreted in the wrong manner! Discuss it with the accountant, explain to him/her what is your intention for business development, if you will trade with foreign countries, do your biggest suppliers have VAT registration, etc. After the correct transfer of the information your accountant will advise you on what stage this registration will be suitable or obligatory for you.

These were only two points, but we believe, that they can determine a lot of things in the future. We do recommend you after you will have the business idea shaped in your head to take 30 minutes and discuss it with an accountant. He/she will explain to you a lot of legal and administrative details which you will have to comply, even before your business will actually start.

If you are one of the smart people who took the decision to work for yourself, but you still did not choose your accountant, feel welcome to meet us on a free preliminary meeting, in order to help you better understand the main points in your enterprise.

Our team wishes you Happy New Year!

In case you find yourself in this article and you need assistance, make an appointment with our team. We will help you to clear the hole process and choose the best solution for you and your company.

 

 

www.argia.bg

tel: 02/9950020

+359888420583 Magi Bogdanova

e-mail: magi_bogdanova@argia.bg

+359887853280 Galya Stoykova

e-mail: galya.stoykova@argia.bg