The Bulgarian Supreme Administrative Court has upheld a tax assessment denying a taxpayer’s right to deduct input VAT in relation to invoices issued for advertising and construction services.

In Decision No. 7083, dated 24 June 2026, the court held that the taxpayer had failed to demonstrate that the services were actually supplied by the companies identified on the invoices. Although invoices, contracts and acceptance protocols were submitted, the evidence was found insufficient to establish the reality of the transactions or that the invoiced suppliers had performed the services.

The court observed that the taxpayer had not adequately explained how the services were carried out, including the personnel, equipment and practical execution of the supplies. It also referred to audit findings concerning several suppliers, including indications that some lacked the personnel or business activity consistent with the invoiced services.

In reaching its decision, the court relied on established case law of the Court of Justice of the European Union, including C-341/11, C-154/20 (Kemwater ProChemie), C-281/20 (Ferimet), C-78/12 (Evita-K), C-18/13 (Maks Pen) and C-285/09. The court reiterated that the right to deduct input VAT depends on satisfying both the formal and substantive conditions under the VAT Directive and that possession of invoices alone is insufficient where the underlying supplies are not established.

The Supreme Administrative Court therefore upheld the lower court’s judgment and confirmed the denial of the input VAT deduction. The decision is final.