Invoices are the foundation of daily accounting work. Every business transaction, whether a sale or a purchase, is documented through an invoice. They determine revenue, expenses, VAT obligations, corporate taxation, and the financial results of the company. In practice, invoices fall into two main categories: sales invoices (revenue) and purchase invoices (expenses).

According to the Accounting Act (Article 6), every accounting document, including invoices, must contain:

• name of the document
• date of issue
• name and address of the issuer
• name and address of the recipient
• subject and value of the transaction

Signatures and company stamps are no longer mandatory under the Accounting Act.

According to the Value Added Tax Act (Article 114), invoices issued by VAT‑registered companies must also include:

• VAT number of the supplier
• VAT number of the recipient (if VAT‑registered)
• type and quantity of goods or services
• unit price
• taxable base
• VAT rate
• VAT amount
• total amount due
• reason for not charging VAT (if applicable)
• sequential invoice number

Incorrect or missing VAT details lead to refusal of VAT credit, corrections in VAT returns, penalties, and rejected expenses.

2. Sales invoices (Revenue)

Sales invoices must always be issued in the name of the company, with its correct VAT number (if VAT‑registered), with a unique sequential number, and with a clear description of the goods or services. A sales invoice is the official proof of revenue. Incorrectly issued sales invoices create risks such as misstated revenue, incorrect VAT liabilities, inconsistencies in financial statements, and problems during audits.

3. Purchase invoices (Expenses)

Purchase invoices document the company’s expenses. For an expense to be recognized, the invoice must be issued to the company, contain the company’s correct VAT number (if VAT‑registered), clearly describe the purchased goods or services, and be related to the company’s business activity. Incorrect purchase invoices may result in refusal of VAT credit, disallowed expenses, adjustments during inspections, and accounting discrepancies.

4. VAT reporting – Sales and Purchase Ledgers

When submitting VAT returns, all invoices must be included in two mandatory registers.

4.1. Sales Ledger

Includes all sales invoices, issued credit notes, and issued debit notes. This ledger determines the company’s VAT payable.

4.2. Purchase Ledger

Includes all purchase invoices, received credit notes, and received debit notes. This ledger determines the company’s VAT credit.
Correct classification of invoices and related notes is essential for accurate VAT declarations, avoiding penalties, preventing mismatches with suppliers and customers, and successful audits.

5. Corrections of issued invoices – Credit Notes and Debit Notes

Once an invoice has been issued, it cannot be changed or deleted. Corrections are made only through Credit Notes and Debit Notes. Both are issued under the Value Added Tax Act (Article 115) and must contain all mandatory elements of an invoice, plus a clear reference to the original document.

5.1. Credit Notes (Decrease)

A Credit Note is issued when the value of the original invoice must be reduced, goods are returned, a discount is granted after invoicing, or part of the service is not performed. A Credit Note must clearly state the number and date of the original invoice, specify what is reduced (quantity, price, taxable base, VAT), and show the new reduced amounts. It is recorded in the Sales Ledger of the issuer as a reduction of sales and in the Purchase Ledger of the recipient as a reduction of purchases and VAT credit.

5.2. Debit Notes (Increase)

A Debit Note is issued when the value of the original invoice must be increased, additional goods or services are provided, or a price increase is agreed after invoicing. A Debit Note must clearly state the number and date of the original invoice, specify what is increased (quantity, price, taxable base, VAT), and show the new increased amounts. It is recorded in the Sales Ledger of the issuer as an increase of sales and in the Purchase Ledger of the recipient as an increase of purchases and VAT credit.
Credit and Debit Notes do not replace the original invoice. They adjust it through separate documents that also participate in VAT reporting.

6. Language requirements

Invoices must be issued in Bulgarian or English. Other languages may cause delays during inspections, refusal to accept documents, and difficulties in communication with the National Revenue Agency.

7. Importance of correct invoicing

Invoices are the backbone of financial reporting, VAT compliance, corporate taxation, internal control, and audit protection. Errors in invoices and their corrections lead to tax risks, administrative sanctions, accounting discrepancies, rejected expenses, and incorrect financial results.