Remote work is no longer an exotic concept but a standard for thousands of professionals in Bulgaria. But while for the employee “home office” means working in pajamas, for the business owner and the freelancer, it is an accounting maze.
In 2026, with the full adoption of the Euro and the intensified digitization of the National Revenue Agency (NRA), tax authorities are closely monitoring so-called “mixed expenses” – those serving both personal needs and business purposes. If you want to defend your expenses during an audit, you must switch from a chaotic collection of receipts to strict documentary discipline.
Freelancer vs. Company: The Choice of Legal Form Defines the Rules
Before you start calculating electricity bills, you need to be clear about where you fall in the accounting spectrum. The difference is fundamental.
Comparison of Reporting
For a deeper analysis of what is more profitable for you in the long run, see our material Advantages and Disadvantages of EOOD and Freelance.
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Which Expenses Can Be Recognized in 2026?
For a corporate expense to be recognized when working from home, it must pass the test of “documentary justifiability” and “connection to the business activity.” Here are the main categories:
1. Tech and Software (100% Recognized)
Anything that is a direct means of production is fully recognized.
- Hardware: Laptops, monitors, peripherals, ergonomic chairs, and desks.
- Software: Licenses for tools like Adobe, Jira, Slack, as well as cloud service subscriptions.
- Condition: The invoice must be in the company’s name with a correct UIC (Unified Identification Code).
2. Utilities: The Big Challenge
Here, the NRA is most suspicious. You cannot simply book the entire electricity bill for your three-bedroom apartment.
- Allocation Method: If your office occupies 20% of the total area of the dwelling, you can recognize 20% of the bills.
- The Solution: Most often, a rental/usage contract is made between the individual (owner) and the company. Thus, the company pays its “portion” of the costs in the form of rent and overheads.
3. Office Supplies and Specialized Literature
Printer paper, toners, business literature, and qualification courses. All these are direct expenses that reduce your taxable base. You can read more on the topic of specific expenses for digital creators in Registration and Accounting for Influencers in Bulgaria.
How to Document Correctly? (Safety Checklist)
To avoid having to pay back taxes with interest two years later, prepare the following documents:
- Rental / Usage Contract: A written basis for why your company “lives” in your apartment. It must describe the exact square footage of the workspace.
- Invoices in the Company’s Name: In 2026, it is critical that internet and mobile phone bills are transferred to the company. An invoice in the name of an individual is not recognized as a business expense for an EOOD.
- Allocation Protocols: Your accountant must prepare an internal protocol proving exactly how you have divided utility bills between personal and official needs.
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Specifics When Hiring Employees in “Home Office”
If you are an employer in 2026, the Labor Code (with the latest amendments) is categorical: you are obliged to provide working conditions.
- Equipment: You must provide the employee with the necessary hardware.
- Consumables: You can negotiate a fixed monthly amount in Euro to cover the employee’s electricity and internet costs.
- Tax Bonus: These amounts for the employee are non-taxable up to certain thresholds, making them an excellent tool for tax optimization and staff retention.
Note: These rules are vital for small teams, such as those described in Taxes for IT Freelancers in Bulgaria: A Complete Guide.
Conclusion: Organized Accounting is Your Peace of Mind
In 2026, the tax environment is more transparent than ever. The NRA has data on your bank transfers and purchases in real-time. Organized home office accounting is not just “annoying bureaucracy” – it is a shield that allows you to focus on your actual work without worrying about audits.
Whether you are a consultant or a software engineer, take time once a month to review your contracts and invoices with your accountant.
Warning: This article is informative and does not replace consultation with a licensed accountant. Legislation may undergo changes during the year.
