VAT (Value Added Tax) is an indirect tax that is applied to the sale of goods and services. This tax mechanism is widely used in the European Union, including Bulgaria, and is an important part of the tax system of every enterprise. The basic concept of VAT is the taxation of the added value at each stage of production and delivery. Ultimately, the tax is paid by the end consumer, while enterprises act as intermediaries who collect it and remit it to the state. Registration can be mandatory or voluntary: Mandatory registration is made if your annual turnover exceeds 166,000 BGN. Voluntary registration is to register even with a lower turnover, if your business has a commercial interest in being registered.