Generally, the invoice is issued within five days from the date of occurrence of tax event or an advance payment received. But what happens if the tax event occurred or advance payment was received on 30th July for instance and the deal is VAT taxable?
If we apply the rule of issuing an invoice within 5 days then we can obviously issue an invoice on 2nd August and seemingly we would not offer the tax law. Yes, but not true – if in this case we issue the invoice issued of 2nd August, we will violate Art. 86 of the VAT Act, according to which the registered person, where the tax is already due to the budget, has to accrue it, as follows:
1. by issuing the invoice stating the tax on a separate line and
2. by including the tax amount in determining the result of relevant tax period in the VAT return (i.e. for July).
This is why the tax becomes due on the date of occurrence of the tax event or the date of receipt of the advance payment and, in this example, this is 30th July, which means that the final date for invoicing is 31st July. If the invoice is issued in August, the company can be subject to penalty at 25% of the amount of the VAT, which was not accrued within the required period, but no less than 250 BGN