Following amendments to the Bulgarian Value Added Tax Act published in Official Gazette No. 115 on 30 December 2025, the reverse charge mechanism for domestic supplies of goods with assembly or installation has been abolished with effect from 1 January 2026. These transactions are now subject to the standard territorial rules, meaning Bulgarian VAT applies where the supply with installation is located in Bulgaria. For businesses not established in Bulgaria carrying out such operations, this triggers a VAT registration obligation in the country.
The change runs counter to the broader direction of EU law, which has been moving towards wider use of the reverse charge as a tool for securing VAT collection and tackling fraud.
