VAT on Amazon sales with a Bulgarian company

Do I pay VAT twice if my Bulgarian company sells from a German warehouse to German customers?

The short answer: no, you do not pay VAT twice.

You may, however, have to register for VAT in more than one country. Put briefly: if a Bulgarian company stores goods in Germany and sells from there, the VAT treatment follows the actual fulfilment and transaction model. The company's seat in Bulgaria does not settle the question on its own. With Amazon FBA in particular, the countries where stock sits, the movements of goods, the customer type and whether you use OSS all matter — our e-commerce and Amazon guide works through those step by step. The example below is deliberately limited to a German warehouse and German end customers; as soon as stock sits in several countries, or Pan-European FBA is in play, the arithmetic changes.

This is usually the point where people invoke the double-tax treaty. Note carefully: the double taxation treaty (DTT) concerns the taxation of profits, not VAT.

VAT

If you sell products from a German warehouse (for example Amazon FBA in Germany) to German end customers:

• The place of supply is Germany, because that is where the warehouse is.
• You must register for VAT in Germany and remit German VAT (currently 19 %) to the German tax office.
• No Bulgarian VAT arises on those sales.

Corporate income tax

Profits are taxed in Bulgaria. This is where the double-tax treaty between Germany and Bulgaria applies. If your company is resident in Bulgaria and its operational management genuinely happens in Bulgaria:

• You pay 10 % corporate income tax in Bulgaria
• No additional German corporate tax is charged, provided there is no permanent establishment in Germany.

What counts as a permanent establishment?

Under § 12 of the German Fiscal Code, a permanent establishment in Germany arises where, for instance, you:

• employ your own staff or contractors at the German warehouse
• have power of disposal over the warehouse (access, control)
• carry out value-adding activities on site — returns handling, picking, customer service

If instead you use an external fulfilment centre such as Amazon FBA and have no power of disposal over the warehouse, that argues against a German permanent establishment — but no blanket conclusion follows from it. Whether one actually arises depends on the specific facts and should be checked before you incorporate, rather than assumed.

Is a Bulgarian company worth it, and which form?

A Bulgarian company has real advantages, but whether it is right for you stays an individual decision that depends on your volumes, your customers and where you actually live and work. We do not sell formation services and have no stake in the answer; what we can give you is the comparison of the firms that do, with their prices and what each of them discloses.

On the legal form, the same caution applies. A sole trader is simple and cheap, but you are liable with your private assets. For traders operating internationally with turnover above €100,000 an OOD (comparable to a German GmbH) is usually the better fit:

• Nominal share capital is enough to incorporate in principle
• Liability is limited
• 10 % corporate income tax, with 5 % withholding tax on dividends
• Often a more credible presence in B2B and platform business

In practice: the OOD is the safer and more flexible option long term — for instance if you later want to sell the business or bring in partners.

Summary

Tax	Payable where?	Note
VAT	Germany	For sales out of the German warehouse
Profit tax	Bulgaria	Only if there is no permanent establishment in Germany

Further reading

• Guide: Amazon FBA and e-commerce with a Bulgarian company — the full picture on warehouse countries, fulfilment models, OSS/IOSS and when a Bulgarian company actually fits
• Book: Start in Bulgaria — how to found a company in Bulgaria
• Comparison: what the formation providers charge