Accounting and legal requirements in the management of a small or large winery in Bulgaria represent a complex topic that excites many entrepreneurs. Often, customers ask us questions such as: “What are the requirements for a small winery?” or “Do I need a license to sell alcohol and what steps does the procedure include?”. In this regard, no less important are the issues related to the specific requirements for a 'specialised small distilling establishment', as well as the regulations relating to the 'sale of wine and the production of alcohol'. To open a winery, you need to understand not only the commercial, but also the accounting aspects of the activity.
One of the key topics that we cover in our consultations is “how the accounting of a winery is kept” - an important element that includes the correct accounting of production and commercial costs, as well as compliance with the Accounting Act (HPA) and the tax requirements provided for in the Corporate Income Tax Act (CPA). In addition, the question often arises: “Do you need a specific license for the production and sale of alcohol?” — the answer to which depends on the category of the winery, the scale of the activity and the location of the establishment.
The requirements for obtaining a license for the production of alcohol and the sale of wine in Bulgaria include complex steps and regulations related to the Law on Excise and Tax Warehouses and the regulations on the implementation of the Law on Alcohol and Spirit Products. “What are the requirements for selling wine?” is a question that is often asked, and here we explain everything from obtaining a license, to the regulations related to labeling and distribution requirements.
For those who are interested in the possibilities of winery development in different regions of Bulgaria such as Sofia, Burgas, Pomorie, Sunny Beach or Karnobat, our team from “Elan Consulting” provides comprehensive services, including business registration, preparation of licensing documents and tax planning.
Opening a winery in Bulgaria is a process that requires compliance with a number of legal requirements related to both the registration of the winery itself and the licensing of wine production and compliance with excise regulations. Initially, in order to open a winery, an enterprise must be registered under the Commercial Law as a trader, and this may include the registration of a company or a sole trader, depending on the volume and nature of the activity.
One of the main requirements for opening a winery is obtaining a license for wine production. According to the Excise Duties and Tax Warehouses Act (ZADC), every person who produces excise goods such as wine is required to obtain a tax warehouse license. The licensed storekeeper must comply with the conditions specified in Article 4, item 2 of the ZADC, including having suitable production premises that meet sanitary and hygienic requirements, as well as comply with all excise regulations.
The quantity produced is of considerable importance for the mode of operation of the winery. Legislation distinguishes between large and small winemakers. Small winemakers, according to Article 4, item 8a of the ZADC, are those who produce up to 1000 hectoliters of wine per year and who are legally and economically independent from other winemakers. If production exceeds this volume, the winery is treated as a large producer, subject to different requirements and stricter controls.
Small winemakers have the opportunity to benefit from reduced excise duty regimes, which exempts them from some of the requirements applicable to large producers. They are provided with a lighter excise regime and less stringent requirements for the tax warehouse, as long as they meet the conditions of independence and a maximum annual production of up to 1000 hectoliters.
It is also important to note that, depending on the place where the construction of the winery is planned, additional permits related to the environment and infrastructure may be required. Any enterprise that is engaged in the production of wine must be registered with the Customs Agency as a tax warehouse if the quantity of wine produced exceeds the minimum thresholds specified in the law.
In addition to the excise regime, wineries must comply with a number of other regulations related to food safety, as well as wine labelling standards. Wine production is strictly regulated by the Law on Wine and Spirits, which defines the requirements for the quality of the product, as well as the procedures for control and certification of the wine produced.
If we are talking about small wineries producing wine for personal use or in small quantities (for example, up to 30 liters per year), as specified in Art. 4, item 8 of the ZADC for specialized small distillation establishments, they must also meet special requirements that provide for a simplified control and registration regime.
The term “small independent winemaker” is clearly defined in Bulgarian legislation, in particular in the Excise and Tax Warehouses Act (ZADC) and its implementing regulations. According to Art. 4, item 8a of the ZADC, a small independent winemaker is one that meets several key requirements. First, it must be legally and economically independent from other winemakers, which means that it does not have the right to carry out its activities under the license of another winemaker.
This legal requirement of independence aims to ensure that small winemakers operate independently, without being linked to large wine companies or other entities. The next important requirement is that the premises in which winemaking takes place must be physically separated from those of other winemakers. This means that the small winemaker must have its own facilities and not share resources or production processes with others, unless they are under a single contractual regime.
Under the same provision, where two or more small winemakers carry out a joint activity, they are considered to be one winemaker, provided that their total annual production does not exceed 1000 hectolitres of wine. This limitation in production quantity is a key element that determines the status of the small winemaker, ensuring that it does not pass into the category of larger producers.
In addition, an important aspect of the status of a small independent winemaker is related to the autonomy of the production processes. The winemaker must manage everything independently and not carry out his activity through contracts or licenses granted by other producers. This means that the winemaker must have full control over the production process and marketing of the wine produced.
With regard to production requirements, the small independent winemaker must comply with strict quality and production standards, which are defined in the Excise and Tax Warehouses Act, as well as in the applicable regulations. One of the key requirements is related to the total quantity of wine produced, which should not exceed 1000 hectoliters per year, as specified in Art. 4, item 9 of the law.
In addition, according to Art. 4, item 9 of the ZADC, “Wine-making facility of an independent small winemaker” is an establishment or establishments in which a total quantity of not more than 1000 hectoliters of wine per year is produced.
Opening a winery in Bulgaria is a process that requires careful planning and compliance with a number of legal requirements. Here are the eleven basic steps that must be followed to open a winery:
To open a winery in Bulgaria, the first step is to register a trading company. The most commonly chosen type of company is a limited liability company (LLC or EOOD), due to the fact that this legal format offers limited liability for owners and easy manageability.
The procedure for registering a company is regulated in the Commercial Law and the Commercial Register Act and requires the submission of an application in the Commercial Register to the Registry Agency. When submitting an application for registration, the following documents must be provided:
Registration takes place entirely online through the Registry Agency website, and the processing time of the application usually takes up to 5 working days. After successful registration, the company receives a unique identification number (EIC), which is necessary for any subsequent business operations.
According to the Commercial Law, the commercial company will act as an independent legal entity that will be able to conclude contracts, hire personnel and conduct business operations.
Once the trading company has been registered, the next step in opening a winery is the provision of suitable production premises. If you are planning the construction of a new building or reconstruction of existing objects, you will need to obtain a building permit in accordance with the Spatial Planning Act (ZUT).
This step includes several stages:
Once you have secured suitable production facilities and obtained a building or redevelopment permit, the next step is to secure vineyards or grape sources that you will use for wine production. Depending on your business model, you can purchase your own vineyards or enter into contracts with grape suppliers. If you decide to manage your own vineyards, you will need to comply with the requirements of the Wine and Spirits Act, which regulates what varieties can be grown, what practices are allowed for vineyard processing, and what quality standards must be followed.
If you decide to work with grape suppliers, you will have to conclude contracts with them to guarantee constant and quality supplies. It is important that the grapes meet all standards for wine production, since control over the quality of raw materials is key to successful production. According to the Law on Wine and Spirits, winemakers must keep information about the origin of the grapes and their processing in order to be able to certify the quality of the wine produced before the control bodies.
After the grapes are harvested, all sanitary requirements must be observed when transporting them to the production premises. According to the applicable regulations, grapes must be accompanied by documents that describe their origin and destination in order to ensure the traceability of production and compliance with all regulations. In the event that the vineyards are far from the production premises, transportation should be organized in such a way that the qualities of the grapes are not disturbed. This stage is particularly important because the quality of the raw materials will also determine the final product — the wine you plan to produce and market.
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Once you have secured the vineyards and are ready to start wine production, the next key step is registration with the Vineyard Register. This registration is mandatory for all producers of wine and other wine products in Bulgaria, according to the Law on Wine and Spirits. Registration takes place at the National Vine and Wine Chamber (NLVK), which maintains an up-to-date register of all winemakers, grape growers and their establishments.
To register with the Wine Register, you must submit an application to the chairman of the NLVK. This application contains a number of important documents, including a certificate of current legal status, if you are a trading company, as well as information about the objects that will be used for the production and storage of wine. Depending on the scale of your production, you will also need to provide detailed information about the area of the vineyards, the varietal composition of the grapes you grow and other specific features of the production processes.
Registration in the Wine Register gives you the right to legally produce and sell wine in Bulgaria. This process is important not only from a legal point of view, but also as part of the quality control and traceability of the product. Winemakers must keep records of all stages of the production process, including harvesting, vinification and storage of the wine. These records must be regularly updated and checked by the competent authorities to ensure that all production meets safety and quality requirements.
An important aspect of this registration is that it is subject to regular control by the Executive Agency for Vine and Wine (IALV). The Agency monitors compliance with all requirements related to the production, processing and marketing of wine products and can carry out on-the-spot checks to make sure that your activity meets all legal standards. Registration in the Wine Register is a mandatory step for every winemaker, and without it you will not be able to legally carry out commercial activities.
Once you have completed registration with the Wine Register, the next important step is the choice between opening a tax warehouse or registering as an independent small winemaker.
According to Art. 57, para. 1 of the ZADC, all persons who produce more than 1000 hectoliters of wine per year are obliged to register their production facilities as tax warehouses. The tax warehouse is an essential element of excise control, since it applies a deferred payment of excise duty regime. This regime allows producers to postpone the payment of excise duty until the moment of sale or realization of production.
In order to be licensed as a tax warehouse, the manufacturer must submit an application to the Customs Agency, which is accompanied by a number of documents. These include technical descriptions of the premises, estimated annual production volumes, as well as financial guarantees to protect the budget. According to Art. 59, para. 1 of the ZADC, these financial guarantees are mandatory for all producers who operate excise goods and must be provided before starting the activity.
Independent small winemakers that produce up to 1000 hectoliters of wine per year may register under a more relaxed regime according to Art. 56, para. 1, item 2 of the ZADC. These producers are not obliged to register a tax warehouse, but are subject to mandatory registration with the Customs Agency as small independent producers.
The registration of a winemaking site of a small winemaker is carried out by submitting an application to the Customs Agency, accompanied by documents such as a technical reference for the site and a declaration of compliance with the legal requirements. Small winemakers benefit from a lighter control regime and are not obliged to provide financial guarantees for their excise duties. However, they are obliged to keep complete documentation on production and sales, as well as provide information on the volume of output produced.
The main difference between large producers operating in tax warehouses and small independent winemakers is in the level of control and accountability. According to Art. 20 of the ZADC, the obligation to pay excise duty arises upon the release of excise goods for consumption. For large producers, this occurs when the goods are removed from the tax warehouse, while for small producers the exemption for consumption is linked to the removal of wine from their premises.
While large producers must provide significant financial guarantees and are subject to strict control by the Customs Agency, small winemakers are exempt from these requirements. However, they still have to comply with legal reporting requirements and provide the necessary documentation for the wine produced and marketed.
In both cases — the registration of a tax warehouse or a wine-making facility of a small independent producer — the process begins with the submission of an application to the Customs Agency, which must be accompanied by the relevant documents. Article 57, paragraph 3 of the ZADC describes in detail the documents that must be submitted, including a technical reference to the object, a list of persons responsible for the production process, and evidence of the legal status of the manufacturer.
Customs Agency checks documents and objects to make sure that all the requirements of the law are met. If everything is in order, registration is carried out in accordance with legal regulations, and a license is issued for tax warehouses after providing the necessary financial guarantees. If the requirements are not met, the Customs Agency may refuse registration and the decision may be appealed.
Having secured a license for a tax warehouse, the next step in the process of opening a winery is the provision of appropriate equipment for wine production and compliance with all hygienic and sanitary requirements. Wine production is strictly regulated, especially when it comes to the equipment you will use and the hygiene of the production premises.
All production facilities must comply with the established safety and hygiene standards provided for in the Food Act, as well as in other applicable regulations related to the production of food and beverages. The equipment for the winery includes fermentation vessels, wine storage vessels, filtering and bottling machines, laboratory quality control equipment and other technical means to ensure safe and efficient production. It is important that all these facilities are installed and maintained in accordance with applicable regulatory requirements.
Production facilities should be designed to provide easy cleaning and maintenance, while respecting high sanitary standards. According to the Ordinance on the Hygiene of Production Premises, every room where grapes are processed and wine is produced must be provided with easily cleanable surfaces, suitable waste water drainage systems and ventilation to prevent the accumulation of moisture and dust. These measures are necessary to prevent contamination of production and to ensure the safety of the final product.
In addition, it is important that the staff working in the winery be well trained and comply with all personal hygiene requirements. This includes wearing appropriate protective clothing, washing hands regularly, and following strict procedures when handling food products. Health inspections will carry out periodic checks to ensure that the production conditions meet the established standards and that there is no risk of contamination of the wine during the production process.
Compliance with hygiene requirements and the provision of appropriate equipment not only ensure that your wine will be safe for consumption, but are also essential to maintaining a high standard of production quality. This stage is crucial for the success of your winery, as quality equipment and strict hygiene procedures will ensure long-term reliability and compliance with regulatory requirements.
Once you have secured the equipment and complied with hygiene standards, the next step in the process is the labeling and commercial presentation of the wine produced. According to the Wine and Spirits Act and relevant regulations, any wine that is sold on the market must be properly labeled and meet certain requirements for the information provided to the consumer.
The bottle label is an essential element that must not only communicate the basic information about the product, but also meet legal requirements. According to the Ordinance on the Designation and Commercial Presentation of Wines and Spirits, indications such as the name of the wine, the year of harvest (if applicable), the alcohol content, the origin of the wine, the grape variety and the volume of the bottle must necessarily be included on the label. In addition, the label must contain information about the manufacturer or importer and be written in Bulgarian.
It is important to note that labels should not mislead consumers about the qualities of the product, and the use of terms such as “type” or “imitation” is strictly regulated. All indications to be used on the label must correspond to the actual characteristics of the wine, including the grape variety, the place of production and the methods of vinification. If the wine has a protected geographical indication (PGI) or protected designation of origin (PDO), these designations must also be correctly represented on the label.
Labeling plays an important role not only for consumer awareness, but also for compliance with legal norms. In addition, the bottles must be marked with a banner, which is issued by the Customs Agency when it comes to wine with an alcohol content of more than 15%. This is a mandatory condition for any bottle that is offered for sale on the territory of the country.
Proper labeling and commercial presentation are essential to the success of your winery, as they ensure that the product will be legally and properly presented to the market. Failure to comply with these requirements may result in sanctions from the control authorities and affect the reputation of your business. Providing quality labeling will not only ensure that you comply with the law, but will also help build consumer confidence in your product.
Once the wine has been produced and labeled, the next step is to certify its quality. Certification is essential to ensure that the wine meets all legal requirements and quality standards established by the Wine and Spirits Act and related regulations. Depending on the type of wine, different certificates and checks are required for the product to be ready for sale on the market.
The certification process is carried out by accredited bodies such as the National Vine and Wine Chamber (NLVK) or other licensed laboratories that are authorized to conduct physicochemical and organoleptic tests of the wine. These tests evaluate various parameters of the wine, including alcohol content, acidity, content of residual sugars and other components that determine its quality. The tests also check that the wine complies with the description indicated on the label and that it complies with the safety requirements.
If the wine has a protected designation of origin (PDO) or protected geographical indication (PGI), it is subject to additional checks to verify that it has been produced in accordance with the origin and quality requirements relating to the region in question. Certificates issued by the competent authorities are necessary both for the internal market and for export if the wine is intended for international markets.
Certification is not a one-time process — depending on the volume of production and the frequency of launching new batches, the winery may undergo regular checks and analyses to ensure that production continues to meet established standards. The results of these checks shall be kept in registers which may be inspected by the control authorities at any time.
After the certification of the quality of the wine, the next step is registration under the Value Added Tax Act (VAT). This is an important aspect of the financial and accounting part of the business, especially if you plan to produce and sell wine in larger volumes. According to the Law on VAT, any legal entity that has a turnover of more than BGN 100,000 within 12 consecutive months is obliged to register for VAT (This is valid until the end of 2024, and from 01.01.2025 the threshold is increased to BGN 166 000).
VAT registration gives you the right to charge value added tax on your sales and, accordingly, to refund VAT on your expenses for goods and services used for production. For wineries that produce and sell large quantities of wine, VAT registration can have significant financial benefits, especially when purchasing raw materials and equipment, the VAT paid for which can be refunded.
In addition, if you plan to export wine to countries of the European Union or outside it, VAT registration is mandatory. For intra-Community supplies within the EU, a winery can benefit from a zero VAT rate, as long as purchases and sales are properly accounted for and declared. For this type of commercial operations, it is important to keep strict documentation and file regular tax returns.
After registration, the winery must submit monthly VAT returns, taking into account all sales, purchases and amounts due to the state. Failure to comply with these requirements may result in penalties and fines from the NRA.
Once you have completed the VAT registration process, the next and final step before placing the wine on the market is to provide banderoles for the bottled wine. This is a mandatory condition for any wine that has an alcohol content of more than 15%, according to the Excise and Tax Warehouses Act. The Banderoles shall certify that the excise duties in respect of the product have been paid and that the wine has been lawfully produced and offered for sale.
To obtain banderoles, you must submit an application to the Customs Agency, where the amount of wine produced and other related data about the product, such as alcohol content and volume of bottles, are indicated. The agency checks the information and issues the banners that must be glued to each bottle before it is put on sale. This is an important process, because without banners your products will not be able to be legally sold on the Bulgarian market.
The banderoles themselves must be placed in a way that prevents them from being damaged or easily removed to ensure their authenticity. In the event that the wine is sold on international markets, a banderoll may also be required if the importing country has similar excise requirements.
Control bodies regularly check the presence and correct placement of the banderoles. Failure to comply with these requirements may result in serious penalties, including fines and confiscation of the goods. Therefore, it is extremely important to strictly follow the procedures for securing banderoles to ensure that the product is completely legal and meets all regulatory standards.
Transporting wine is a key aspect of any winery's logistics, and is subject to strict regulations to ensure that products move safely and in accordance with the law. According to the Law on Wine and Spirits, wine and grape products may be transported on the territory of Bulgaria only with an accompanying document certifying the origin and purpose of the product.
This document is issued by the consignor and must contain information about the type of product, its quantity and origin. The accompanying document is mandatory for each transport and must be certified by the territorial unit of the Executive Agency for Vine and Wine (IALV). Responsibility for the accuracy of the content of this document lies entirely with the sender. It is issued for single use and cannot be used for repeated transportation.
In addition, if the wine is transported under the procedure of deferred payment of excise duty, which is possible when transporting wine within the country or to other Member States of the European Union, the transport document is issued in electronic format according to the Law on Excise Duties and Tax Warehouses. In this case, the electronic administrative document replaces the standard accompanying document, facilitating the procedure for international deliveries and ensuring the traceability of the goods throughout the transport process.
Moving wine to international markets, both within and outside the European Union, requires additional licenses and compliance with international trade regulations. For intra-Community supplies of wine within the EU, producers can benefit from reduced excise duty rates if the product is properly declared and transported according to legal requirements.
