What happened at the meetings between the NRA and businesses in the context of Ordinance N18

BESCO has been participating in the dialogue with institutions on Ordinance 18 for about a year and a half. This is a battle we are fighting together with many other associations, industry organizations, and entrepreneurs.

A few months ago, the discussions were quite discouraging. Perhaps this dialogue gives a good sense of the situation at the time:

Minister: Our goal is for N18 to be adopted as soon as possible! What do you think?

Entrepreneur: We think N18 is a complete failure!

Minister: Wonderful, so we all agree that we need to improve N18 as soon as possible and adopt it!

Entrepreneur: !?!?!?

When we presented our 28 demands to Prime Minister Boyko Borissov, we placed first the cancellation of the planned changes to Ordinance 18 affecting online businesses.

Today, we are very pleased that the dialogue with institutions, and specifically with the NRA, has taken a different turn. In recent weeks, a series of intensive meetings were held between the NRA and business representatives, where possibilities for an alternative mechanism for software-based fiscalization of sales made through e-commerce stores were discussed and defined, including:

• description of processes at a business level
• technological description of the transmission environment
• communication mechanisms between software systems of obligated entities and the NRA
• data protection
• methods for generating fiscal information for sales and providing it to consumers

Here you can find recordings of all meetings:

• Meeting 1
• Meeting 2
• Meeting 3
• Meeting 4
• Meeting 5
• Meeting 6

From BESCO, the following attended the meetings:

Danail Koev – Member of the Supervisory Board of BESCO
Dobromir Ivanov – Chairman of the Management Board of BESCO

We are sharing the report of the working group established by Order №З-ЦУ-1879/31.12.2020.

I. Description of the software fiscalization process at a high-level business view

The purpose of software fiscalization is to provide an alternative method for reporting sales carried out through e-commerce stores, as defined in §1, item 87 of the VAT Act. Considering the specifics of conducting business online, the use of physical fiscal devices complicates merchants’ operations, making it necessary to provide an alternative that facilitates compliance and improves voluntary tax reporting.

At the working group meetings, the majority of participating business organizations supported the following model:

1. When a sale is made in an online store, certain information about it is sent to an NRA service;
2. The NRA service registers the sale with a unique number and returns data needed to generate a QR code;
3. The merchant generates a QR code and provides it electronically to the customer along with the sales document;
4. Customers can verify the QR code via the NRA service;
5. The NRA returns confirmation data for the sale.

Alternative models involving “fiscal intermediaries” (e.g., payment processors, courier companies, fintech providers) were also discussed.

Advantages:

• convenience for merchants
• faster adoption
• additional reliability

Disadvantages:

• risk of oligopolies
• additional administrative burden
• security risks for financial data

The majority concluded that intermediaries should not be included at this stage; communication should be direct between merchants and the NRA.

II. Scope of the proposed software fiscalization regime

The regime should be optional, not mandatory.

It should be an alternative to existing options under Ordinance N-18.

Merchants should be able to apply it per individual e-store.

The regime applies to both:

• online-only merchants
• hybrid merchants (online + physical stores)

However, if goods are paid and received in person, fiscal devices remain mandatory.

The regime should apply to all payment methods (bank transfer, POS, cash on delivery, etc.).

It should cover both:

• B2C
• B2B sales

A revision of the legal definition of “e-shop” is required.

III. Moment of fiscalization

Sales data should be sent to the NRA at the earlier of:

1. The moment of payment, OR
2. The moment goods leave the warehouse / service is delivered

Exception: for bank payments, where there is a delay in notification.

This aligns with the definition of a taxable event under VAT law.

IV. Transmission environment and data protection

Options discussed:

1. GPRS (used by fiscal devices)
2. Internet

The working group agreed on Internet.

Risks include:

• data security
• service reliability
• cyber threats (e.g., DDoS attacks)

Mitigation:

• technical safeguards
• offline mode

Authentication approach:

• Each e-store registers with the NRA
• NRA issues a key pair for API authentication

Alternative (less preferred): username/password authentication.

V. Offline mode

Critical for business continuity.

Proposed approach:

• If connection to NRA fails, sales continue without QR code
• Data is sent once connection is restored
• Updated documents with QR codes are sent later

Offline period:

• up to 72 hours (extendable)

Rejected idea:

• forcing use of fiscal devices after timeout

Alternative:

• merchants notify NRA and continue operating

Additional requirements:

• periodic status checks (e.g., every 5 minutes)
• logging of all offline activity

VI. Data scope and customer document

1. Data sent to NRA: similar to fiscal device data
2. NRA response: includes full data string for QR code
3. Customer document: similar to electronic fiscal receipt
4. Delivery: strictly electronic (email, link, account, etc.)

Next steps

1. Detailed business requirements
2. Technical specifications (API, security, communication)
3. Cost-benefit analysis
4. Legal amendments