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Short, precise answers from our practice — about VAT, social security, taxes, patent and the transition to the euro. If your question is not here, ask us below — we reply within 24 hours.
If you provide services in Bulgaria, a VAT registration must be done upon reaching a turnover of €51,130 for the last 12 months. Upon reaching this amount, it is necessary to register within seven days.
If you provide or receive services from other countries, it is also necessary to register under Art. 97a of the VAT Act.
Voluntary VAT registration is also possible at the client's discretion.
For more information, contact us or visit the website of NRA.
Yes, they are required. According to an opinion by the NRA:
Bulgarian citizens in their capacity as taxable persons or companies receiving consulting, advertising, expert, engineering, and other services from a person established in an EU Member State are required to register under Article 97a of the VAT Act. Persons registered under this special regime are not entitled to a tax credit for the VAT charged on the supplies received by them.
If you conduct business as a self-insured individual or as a company, you are required to be insured. The minimum amount is 550.66 €, and the maximum is € 2,111.64 (until July 31, 2026; from August 1, 2026, the maximum insurance income will increase to approximately € 2,300). Payment is your monthly obligation, regardless of whether you have received income in the respective month.
Insurance amounts are a percentage of the insurable income: SOO – 18.30% (or 23.30% for those born before 01.01.1960), SUPF – 5%, Health – 8%.
| DPF (18.30%) | € 100.78 |
| SUPF (5%) | € 27.53 |
| Health (8%) | € 44.05 |
| DPF (18.30%) | 377.72 € |
| SUPF (5%) | 95.87 € |
| Health (8%) | 153.39 € |
It is good for the amount on which you are insured to be close to the expected income for the year.
Monthly insurance contributions are declared by the 25th of the following month by submitting declaration form 1 to the NRA.
Insurance contributions are due in advance by self-insured persons. If the freelancer has not exercised activity for a certain period, a declaration for suspension of insurance can be filed, and no insurance contributions are due for this period.
Every self-insured person is required to pay insurance contributions in advance every month, with the minimum being based on the minimum insurance income (€550.66). At the end of the year, an adjustment is made — if the profit is higher than the insurance income, additional insurance contributions are due on the difference.
Example: a freelancer insuring themselves at the minimum (€550.66/month), but having declared a profit of €7,669.38 at the end of the year, pays additional insurance on the difference; with a higher advance insurance payment (e.g., €613.55), the additional payment is smaller. The scheme applies to all self-insured persons — lawyers, consultants, IT specialists, designers, etc.
Describe to us how your clients pay you, in what currency, and from where.
The annual tax owed by self-employed persons is 10% of the income for the calendar year, after deducting 25% statutory recognized expenses and the amount of social security contributions paid during the year. In case you are performing patent activity, please take a look at this link: Patent Tax.
If you are a freelancer, you are not required to issue cash receipts. However, it is necessary to issue a document that shows the amount of the received income — with a date, subject of activity, and the payer of the income. It is not necessary to open a new bank account — you can use your personal, already existing one.
When working with clients from the European Union: it is mandatory to register under the VAT Act. You can check the status of your client in the system VIES. You issue an invoice without charged VAT, with the grounds of Art. 21, para. 2 of the VAT Act.
When working with clients outside the EU: you are not obliged to register under the VAT Act. The invoices are again without charged VAT, with the grounds of Art. 21, para. 5 of the VAT Act.
US law requires a specific form to be filled out before receiving income from the USA. If you are a self-employed freelancer, the form is W-8BEN. If you are registered as a company, W-8BEN-E. It is presented to the income payer or submitted on the platform, e.g., Upwork or Fiverr.
When performing certain activities — such as hairdressing/cosmetic services, renting out properties, taxi transportation — the law allows the income to be taxed with a patent tax (Local Taxes and Fees Act — LTFA).
The requirements: the turnover for the previous year does not exceed €51,130 (equivalent to 100,000 BGN), and not be registered under the VAT Act (except in cases of partial registration). The amount is determined by the Municipal Council and is paid in advance four times a year in four equal installments.
Typically, IT, design, consulting, and illustration do not fall under the list of patent activities.
For more information, contact us or visit the website of NRA.
According to the legislation, all values in Bulgarian Lev (BGN) are converted at the fixed rate: 1 EUR = 1.95583 BGN.
The conversion applies to: account balances (cash, bank, receivables, payables), deposits, unpaid invoices, and balances as of December 31, 2025, opening account balances in the balance sheet for 2026.
Rounding of the exchange rate is not allowed. Rounding of the amounts after conversion is performed to the second decimal place (0.01 EUR).
It is not legally mandatory, but it is highly recommended. All contracts with monetary obligations or fixed amounts in BGN must be updated via an annex stating: the new value in Euro, the effective date (01.01.2026), and a clarification that the conversion was performed at the official BNB exchange rate. This applies to: employment contracts, rental and lease agreements, subcontractor agreements, subscription agreements, credit and lease repayments.
All financial statements for 2025 shall be prepared and submitted in Bulgarian Lev (BGN). This includes: Annual Financial Statements (AFS) – by March 31/June 30, 2026; tax returns under PITA / CIT Act; annual VAT return, Intrastat and VIES; internal reports for management or the auditor. Even after the transition to the Euro, reports for past periods remain in BGN and must be kept as such.
All invoices are issued in euros. The option for cash payments in levs applies only to cash transactions. Banking institutions automatically convert payments into euros at the official exchange rate (1.95583). The period for the parallel use of the lev may be changed by the ECB or the BNB.
The invoice currency must be in euros (EUR). You can add supplementary information: "Equivalent value in levs: … at an exchange rate of 1 EUR = 1.95583 BGN". Invoices in BGN cannot be issued after 01.01.2026.
All reports — VAT, Intrastat, VIES — will be submitted in euros. The systems of the NRA and customs are already prepared to accept the new formats. The first VAT report in euros will be for the month of January 2026, with a submission deadline of February 14, 2026.
No. From January 1, 2026, all accounting documents, reports, statements, salaries, social security contributions, and invoices must be entirely in euros. The lev will be used temporarily only for cash payments and transfers as an auxiliary currency until the end of the transition period.
Salaries will be recalculated in euros at the fixed exchange rate. It is not necessary to sign new employment contracts, but it is recommended to sign an annex stating the new amount in euros. Taxes, social security contributions, and payrolls will also be in euros.
Yes. The value of assets, inventory, and fixed assets must be recalculated in euros as of 01.01.2026 and reported in the opening balances for the year. Tip: perform a full inventory count as of 31.12.2025 to have a basis for the conversion.
No, for accounting positions converted at the fixed exchange rate, no foreign exchange differences are recognized. Foreign exchange differences can only arise: from payments in a foreign currency (other than EUR); or when using an exchange rate other than the fixed rate (e.g., bank fee, exchange loss at the cash desk).
IBANs will not change, but the base currency of the accounts will become the euro. Transfers in levs will be converted automatically. Bank statements will be issued in euros, effective from 01.01.2026.
They are stored unchanged, in BGN, according to the Accounting Act – 10 years. They must not be reissued or recalculated. For payments after 01.01.2026 → they are reflected in the accounting in EUR, at the converted value.
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