Do You Need VAT Registration for Stripe?

In this article, we will explore a very confusing topic for startup business owners, as well as for accountants who are only now starting to deal with online sales. We will not express personal opinions here — instead, we will rely entirely on facts taken from an official NRA document (official statement).

It is important for us to provide you with official and reliable information, rather than making assumptions or misleading claims. This is exactly why the NAP Ready platform is becoming one of the preferred software solutions for online stores using Regulation N-18 under the alternative sales reporting model.

Какво всъщност е Stripe?

Stripe is an international card payment platform used by online stores and software platforms. It is one of the most popular and preferred payment solutions used in Bulgaria for processing card payments.

Stripe allows you to quickly, easily, and securely integrate card payments into your online store so you can accept credit and debit card transactions. But do you need VAT registration in order to account for Stripe fees? In this article, we will focus specifically on this aspect and explain it in the clearest and easiest way possible.

Is VAT Registration Mandatory?

Stripe is an international company with a European registration/entity in Ireland, which manages the European market. Many business owners and accountants compare Stripe to Google Ads and Meta Ads, which are also registered in Ireland and require VAT registration for their services. We even notice that large accounting firms advise clients to register under Article 97a of the Bulgarian VAT Act in order to use Stripe services, but this is completely incorrect.

How Does the NRA Treat Stripe?

The National Revenue Agency (NRA) states that Stripe is treated as a financial service under Article 46, Paragraph 1, Item 5 of the Bulgarian VAT Act. According to the NRA, Stripe is considered a financial service that is exempt from mandatory VAT registration.

It is important to clarify that in this article we are referring only to VAT registration specifically related to the use of Stripe.

However, if you use services such as Google Ads, Meta Ads, and similar platforms, then VAT registration is required. But if you attempt to register for VAT solely because of Stripe, the NRA will most likely reject your VAT registration application.

What Does the NRA Say About Refusing VAT Registration?

The NRA is very clear and explicit when justifying a refusal for VAT registration under Article 97a of the VAT Act if the application is submitted solely due to Stripe usage. Here are some of the most important parts of the refusal statement:

It should also be noted that according to the case law of the Court of Justice of the European Union, supplies exempt from VAT under Article 13(B)(d) of the Sixth Directive are, by their nature, financial services. Even though these services do not necessarily need to be provided by banks or financial institutions, they all belong to the field of financial services (Velvet & Steel Immobilien judgment, C-455/05, EU:C:2007:232, paragraphs 21 and 22 and the cited case law).

Considering the above, the service that the legal entity receives from the EU-based taxable person /Ireland/ – Stripe Payments Europe Ltd., with valid VAT number IE3206488LH, constitutes an exempt supply under Chapter Four of the Bulgarian VAT Act, and therefore there are no grounds for VAT registration under Article 97a, Paragraph 1 of the VAT Act.

Based on the above findings, there are no grounds for registration under Article 97a, Paragraph 1 of the VAT Act. As a result, a refusal for VAT registration is issued.

So… Do You Need VAT Registration for Stripe?

The short answer to whether you need VAT registration in order to use Stripe is — No. You do not need it.

Once again, we would like to clarify that this article discusses only VAT registration specifically related to the use of Stripe. If you plan to use services such as Meta Ads, Google Ads, and similar platforms, then VAT registration will still be required.