Registration as a freelancer and proper accounting are essential for anyone wanting to work independently. Proper registration and bookkeeping are necessary to comply with legal requirements and avoid future issues with tax authorities.
This article will examine how to register as a freelancer, the accounting requirements, and the taxes and social security contributions.
Definition of a Freelancer
Freelancing includes activities carried out by individuals independently, without being subordinated to an employer. These activities may include consulting services, creative work, craft-related services, and others. Freelance professions are regulated by various legislative acts and regulations defining their practice’s legal framework.
Legal Framework
The registration process for a freelance profession begins with applying to the Registry Agency. This application can be submitted in person, by an authorized representative, or online through the agency’s electronic services system.
Registration as a Freelancer
Registration Procedure
The registration process for a freelance profession begins with applying to the Registry Agency. This application can be submitted in person, by an authorized representative, or online through the agency’s electronic services system.
Required Documents
To register as a freelancer, you must submit the following documents:
- Personal identification document (ID card or another form of identification)
- Application for registration
- Documents proving your professional qualifications (if required)
- Other specific documents related to your profession
Processing Time and Fees
The processing time for freelancer registration is usually up to 7 working days from the date of application submission. Registration fees may vary, typically between 10 and 50 BGN, depending on the specific procedure and submission method.
Freelancer Accounting
Bookkeeping
Freelancers must keep accounting records in compliance with the Accounting Act. The documentation may include maintaining accounting registers, preparing financial statements, and storing accounting documents.
Income and Expenses
Freelancers are not required to prove expenses, as they have statutorily costs recognised. These expenses can be deducted from revenue when determining the taxable base. The costs recognised for freelancers are either 25% or 40% of income, depending on the type of activity performed.
Taxes
Freelancers are required to pay personal income tax (10% of taxable income). In some cases, if their turnover exceeds a certain threshold, they may be required to register under the Value Added Tax (VAT) Act.
Social Security Contributions
Freelancers must pay mandatory social and health insurance contributions. Social security contributions depend on the declared income and the minimum social security threshold for the respective year. The contributions must be paid monthly by the 25th of the following month.
Annual Tax Return
Freelancers must submit an annual tax return reporting their income and expenses by April 30 of the following year.
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Practical tips and best practices
Choosing a good accountant or accountancy firm is essential for freelancers to do their bookkeeping properly. When choosing an accountant, it is important to make sure that they are experienced with freelance accounting, know the regulations and can provide you with competent advice.
It’s also useful to inform yourself about the different options and advantages of different forms of business organisation, such as an EOOD (Ltd), and to consider which form is most suitable for your business.
For more information and advice, consult professionals or check out the various resources available online, such as these FAQs or our LinkedIn profile.
These resources can help you make informed choices and make registering and posting as a freelancer easier.
