Accounting of a grocery store in Bulgaria

Keeping accounting for a grocery store requires strict compliance with tax and accounting regulations. Correct accounting of goods, correct calculation of mark-up, and effective VAT management are key to business profitability.

Accounting for goods in the store is a complex process that includes various accounting methods, such as weighted average price, first in—first exit (FIFO), and specific identification. Errors in the spelling of goods can lead to incorrect financial statements, inaccurate estimated income and tax problems. In addition, the management of marriage and product depreciation is inevitable in the grocery trade, which requires strict accounting operations to minimize losses.

The correct application of VAT for grocery stores is also a critical aspect — especially with the different rates for basic and luxury food products. VAT registration, submission of monthly returns and correct invoicing of sales are processes that require expert accounting services.

“Elan Consulting” provides professional accounting services in Sofia, Plovdiv, Varna, Burgas and the whole of Bulgaria, helping store owners optimize their finances. We assist with the correct spelling of goods, inventory management, marriage protocol processing, and implementation of best accounting practices for grocery stores.

What accounting and tax requirements should grocery stores meet under Bulgarian legislation?

Grocery stores in Bulgaria are required to comply with a number of accounting requirements set by The Accounting Act (CPA)and National Accounting Standards (NSS). These requirements ensure transparency in accounting, correct accounting of income and expenses, as well as compliance with tax legislation. Here are the basic mandatory practices that every grocery store should implement.

Current accounting and documentation of business operations

According to Art. 1 of the Accounting Actenterprises are obliged to keep current accounting, which includes a detailed record of all income and expenses, purchases, sales, and movements of goods. Each financial transaction must be supported by the corresponding primary accounting documents — invoices, receipts, expense and income orders.

Accounting for goods by the selected method

Grocery stores can apply various methods of accounting for goods, such as weighted average price, FIFO (first input — first output)or specific identification. The method must be consistently applied and reflected in the accounting policy of the store. The most commonly used method is weighted average price, since it allows a balanced distribution of the costs of the purchased goods.

Dispatch of goods and management of stock

The write-off of the goods must be carried out by properly documented discharge protocols. Accountants monitor the movement of goods and control discrepancies between real and reported inventories. In addition, goods that are “on the way” (in the process of delivery) must be properly accounted for according to the requirements of National Accounting Standard (NSS) 2 — Accounting for inventories.

Taxation of VAT and correct keeping of tax registers

All stores exceeding the turnover of 166 000 BGN per year, are subject to mandatory VAT registration according to Value Added Tax (VAT) Act. Grocery stores must report VAT in their monthly tax returns and keep detailed records of taxable supplies, tax credit and accrued liabilities. It is important to follow the rules for the implementation of reduced rate of 9%for some foods, while the standard rate remains 20%.

Depreciation and marriage of goods

Grocery stores often encounter problems with the marriage of goods, especially those with a short shelf life. According to IAS 36 — Impairment of assets, stores must carry out periodic inventories and account for depreciated goods. Discarded foods must be written off with protocols signed by the responsible persons. These expenses can be recognized for tax purposes if they are properly documented.

Correct maintenance of financial statements

At the end of each financial year, stores are required to prepare and publish Annual Financial Statement (GFO), which includes:

Balance sheet— shows assets, liabilities and equity.
Statement of income and expenses— details sales, cost of goods sold and operating costs.
Cash flow statement— tracks the movement of funds.

These reports are submitted to the Commercial Register and the National Statistical Institute (NSI) within the statutory deadlines - for enterprises, legal entities and corporate companies, this deadline is until 30.06 of the calendar year following the fiscal year to which the report relates, i.e. if the store is opened in 2025, the GFO must gave until 30.06.2026

Compliance with cash discipline and requirements for fiscal devices

Grocery stores are required to use registered fiscal devices (cash registers)that meet the requirements of the NRA. All sales must be recorded and daily reports kept for control. In addition, traders must comply with the requirements of issuance of cash receiptsand accounting of turnover through electronic trading systems.

What is SUPTO and is it mandatory for grocery stores?

According to §1, item 84 of the Supplementary Provisions of the Value Added Tax Act (VAT), 'shop sales management software' (PTO) means any software or software module that is used to process information for making sales of goods and/or services in a commercial establishment for which there is an obligation to issue a fiscal voucher. The main purpose of this software is to automate and control the sales process, ensuring accuracy in accounting for turnover and preventing revenue evasion.

According to §1, item 19 of the Supplementary Provisions of Ordinance No N-18/2006, “sales management” through the use of PTO is a process of automated processing of information for making sales, covering the tracking of the movement of goods or the performance of services from the moment of application to their provision and/or payment. This means that the TSO must ensure full traceability of commercial operations, including detailed recording of goods or services sold, payment methods and connection to fiscal devices.

According to Art. 118, para. 1 of the Value Added Tax Act (VAT), all commercial establishments that carry out cash sales are obliged to use fiscal devices for recording and accounting of turnover. In this regard, Ordinance No. H-18 specifies that if a commercial establishment uses software for sales management, this software must be approved by the NRA and comply with the requirements of the PTO.

Also, Art. 3, para. 17 of Ordinance No. H-18 specifies that the software for sales management must ensure automatic transmission of information to the fiscal device, with each sale being accounted for in real time. In addition, Art. 52a, para. 1 of the same ordinance requires that all used PTOs be entered in a public list of NRA approved software products.

The question of whether a SUP is mandatory for grocery stores depends on how they process sales and how they accept payments. In stores where software for registration and processing of sales is used and if payments are made in cash or by card in this establishment, the software used is considered to be a PTO and must comply with the requirements of Ordinance No N-18/2006. This also includes the obligation for it to be linked to a fiscal device and to manage the process of issuing fiscal notes.

If in a grocery store sales are registered through software, but payments are made only by bank transfer, then the software used is not considered a SUP and does not have to comply with the requirements of Ordinance No N-18/2006. In this case, there is no obligation to connect to a fiscal device, since there are no cash or card payments that require the issuance of a cash receipt.

Additionally, if a grocery store uses only a standard cash register without sales management software, the requirements for the POS do not apply. This means that small stores that do not have an automated sales management system and rely only on fiscal turnover accounting devices are not obliged to implement a SUP.

From what has been said so far, it follows that in order to determine whether a grocery store should use a POS, it is necessary to analyze whether it uses sales management software and whether it accepts cash or card payments. In the event that both criteria are met, the software must meet all the requirements of Ordinance No H-18/2006 and be registered with the NRA.

This means that grocery store owners need to carefully consider what software they use and how they organize the payment process to comply with regulatory requirements.

It is important to note that in case of non-compliance with the requirements of the CPA, penalties are provided. According to Art. 185, para. 1 of the Value Added Tax Act, the use of unauthorized or non-compliant software for sales management may result in fines in the amount of BGN 3000 to BGN 10,000, as well as temporary sealing of the business premises.

What software and equipment do I need to have in my grocery store in Bulgaria in order to be tidy from a tax and accounting point of view?

In order for a grocery store in Bulgaria to be regulated from a tax and accounting point of view, it must have a certain set of software and technical means that meet the legal requirements provided for in the Law on Value Added Tax (VAT), Ordinance No. H-18/2006 and the Law on Accounting. The main purpose of these requirements is to ensure the correct registration of sales, the correct issuance of fiscal notes and compliance with accounting standards.

First of all, any grocery store that carries out retail sales must have fiscal device(FU) — cash register or fiscal printer, which meets the requirements of Ordinance No N-18/2006 According to Art. 118 (1) of the ZVAT, all persons who carry out sales of goods or services for which they receive payment in cash or by card are obliged to use a fiscal device linked to the National Revenue Agency (NRA). This means that the cash register or fiscal printer must be approved by the NRA and transmit information about the sales made in real time.

In case the store uses software for sales management in commercial premises (SUPTO), it must meet the requirements laid down in Ordinance No H-18/2006. According to §1, item 84 of the Supplementary Provisions of the VAT Act, a SUP is any software or module of software that is used to process information for making sales of goods and/or services in a commercial establishment when a fiscal voucher is issued for such sales. Moreover, according to §1, item 19 of the RD of Ordinance No N-18/2006, this software must ensure complete traceability of the sales process — from the ordering of the goods to their payment. That is, if the grocery store uses such software and accepts cash or card payments, it must be registered with the NRA and meet all technical requirements, including integration with the fiscal device.

From an accounting point of view, the store must have accounting softwareto ensure accurate and complete accounting of income, expenses and tax liabilities. According to the Accounting Act, Art. 6, para. 3, all enterprises must keep their accounts in a way that provides reliable information about their financial situation. This means that the grocery store must use software that allows data storage and processing in accordance with applicable accounting standards.

Additionally, if the store sells through e-shop (website), the software used must be registered in the NRA, according to Art. 118, para. 16 of the GDPR. According to Ordinance No. N-18/2006, e-shops fall within the scope of the PTO and must be connected to a fiscal device for issuing cash receipts.

To control and manage stocks, a grocery store must have barcode scanners and electronic scalesto be linked to the fiscal device or sales management software. According to Ordinance No. H-18/2006, electronic scales used in retail trade must be approved and connected to the cash register or fiscal printer.

Another important aspect is the presence of video surveillance system, which, although not required by law, can serve as internal control and accountability. This can help prevent losses and better manage the store's activities.

Do I need a grocery store license in Bulgaria?

To operate a grocery store in Bulgaria, a specific license is not required, but it is necessary to comply with certain legal procedures and registrations in order to be compliant from a legal and regulatory point of view. The first step is the registration of a company or sole trader in the Commercial Register, according to Art. 2 of the Commercial Law. After that, the object must be registered with the Bulgarian Food Safety Agency (BAFSA), according to Art. 12, para. 1 of the Food Act. This registration includes checking the site for compliance with hygiene requirements and the implementation of a food safety management system (HACCP). In addition, it is necessary to declare the working hours of the object to the respective municipality, as indicated in Art. 12 of the Consumer Protection Act. If you plan to sell specific products such as alcohol or tobacco products, additional licenses will be required, according to Art. 47 of the Excise and Tax Warehouses Act. For more details on the requirements for opening a grocery store in Bulgaria, you can get acquainted with our article on the requirements for opening a grocery store!

Frequently Asked Questions

What are the food safety requirements in the grocery store?

Every grocery store in Bulgaria must comply with the requirements of the Food Law and the regulations of the European Union, which guarantee the safety of the goods offered. According to Article 18 of the Food Act, food outlets must be registered with the Bulgarian Food Safety Agency (BAFSA) and comply with the hygiene standards set out in Regulation (EC) No 852/2004 on food hygiene. A self-control system based on the principles of HACCP (Hazard Analysis and Critical Control Points) must be implemented and maintained in every commercial establishment to ensure the safety of food from delivery to offer to customers. All employees must be familiar with good hygiene practices and undergo training related to the storage, processing and supply of food, which is mandatory under Article 20 of the Food Act. In addition, the store must provide suitable storage conditions for the different types of food, with temperature requirements strictly observed, especially for products that are subject to cold storage.

What documents should I process in the grocery store to ensure tax and regulatory compliance?

Every grocery store must maintain complete documentation to ensure its integrity before the state authorities. According to Art. 123 of the Accounting Act, all merchants are required to keep accounting records and keep documents for all commercial operations carried out, including invoices for purchases and sales, cash statements and bank statements. In addition, each store must keep documents related to the registration of the company and the object, such as the certificate of registration in the Commercial Register, the registration in the NRA and the certificate from the BACH. In the event that the store sells specific products such as alcohol, tobacco products or food of animal origin, the corresponding permits and certificates of conformity must be maintained. It is also important to keep correct accounting of inventories, as regulated in Art. 42 of Ordinance N-18, where it is stated that each sale must be duly reflected through a fiscal device or sales management software.

What are the requirements for the staff in the grocery store?

Employees in the grocery store must meet certain health and qualification requirements in order to be able to work with food products. According to Art. 22 of the Food Law, all persons who handle food must undergo medical examinations and have health records certifying that they are fit to work with food products. In addition, Art. 17 of Ordinance No. 5 of 2006 on food hygiene requires the employer to organize regular training for staff on the safe storage and supply of food. Every employee should be familiar with good commercial and hygienic practices, as well as the rules for maintaining cleanliness in the work environment. Violations of these requirements may result in sanctions by the Bulgarian Food Safety Authority and other control bodies, and fines for non-compliance with hygiene standards can reach significant amounts under Article 46 of the Food Act.