Frequently Asked Questions

When should I register for VAT?

If you provide services in Bulgaria, registration under the VAT Act is made when the turnover reaches BGN 100 000 for the last 12 months. When this amount is reached, registration must be made within seven days of the date on which the turnover is reached.

If you provide or receive services from other countries, you also need to register under Article 97a of the VAT Act.

It is also possible to make a voluntary VAT registration if the customer wishes.

For more information, contact us or visit the website of the National Revenue Agency.

If you work as a self-employed person or as a company, you must take out insurance. The minimum amount on which you can pay social security contributions is 1077 BGN and the maximum - 3750 BGN. It is your monthly obligation to pay the national insurance contributions, regardless of whether you have earned any income in that month.

Contributions are a percentage of insurable income, namely:

  • Social Security (DOO) - 18.30% or 23.30% for those born before 01.01.1960
  • National Insurance (DZPO) - 5%
  • Health - 8%

If you are insured on the minimum amount of 1077 BGN, the following contributions are due:

  • Social Security - BGN 197.11.
  • National insurance - BGN 53.85
  • Health - BGN 86.16

If you are insured on the maximum amount of 3750 BGN, the following social security contributions are due:

  • Social Security - BGN 738.75
  • Social Insurance - BGN 187,50
  • Health insurance - BGN 300

Remember that the amount you are insured on should be close to your expected income for the year, as these amounts should be equalised when completing your annual tax return.

Please, get in touch with us for more information.

The annual tax payable by self-employed persons is 10% of the income for the calendar year, after deduction of 25% of statutory expenses and the amount of social security contributions paid during the year.

In case you carry out patent activity, please follow this link: Patent taxes

If you are a freelancer you are not obliged to issue receipts. However, it is necessary to issue a document showing the amount of income received. This document should contain details of the date, the business and the payer of the income.

You do not need to open a new bank account. You can use your existing personal one.

In the case of certain activities, such as hairdressing/beauty services, property rental, taxi transport, the law allows income to be taxed with the patent tax. The Local Taxes and Fees Act (LTFA) applies in this case..

The requirements here are that the turnover for the previous year does not exceed BGN 100,000 and that you are not registered under the VAT Act (except in cases of partial registration). The Municipal Council also determines the amount of the patent tax.

The patent tax is payable in advance four times a year in four equal instalments.

For more information, contact us or visit the National Revenue Agency website.

If you are a freelancer and your clients are outside Bulgaria, there are some other things you need to know. Still, it is best to consider your case individually. Contact us and take advantage of the 30-minute free consultation, кwe offer to all new clients.

When working with clients from the European Union:

If you are working with clients from the European Union it is compulsory to register for VAT. You can check the status of your client (whether they are registered in the European VIES system here.

You then issue an invoice for the agreed value without charging VAT. In the reason for not charging VAT you write the following text: article 21 paragraph 2 of the VAT Act.

When dealing with non-EU customers:

If you work with customers who are outside the European Union, you are not obliged to register for VAT. Again, the invoices you issue must be exclusive of VAT. The reason for not charging VAT should read as follows: article 21(5) of the VAT Act.

If you have chosen to work with US clients, there are a few important things to know. U.S. law requires that you fill out a certain form before you receive U.S. revenue.

If you are a self-employed freelancer, the form you need to fill out is the W-8BEN aka Department of the Treasury Internal Revenue Service Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)

If you are registered as a corporation, then you must complete a Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) /W-8BEN-E/. Once completed, you must submit this document to the payer of the income, or submit it to the platform from which you will receive your income, e.g. UPWORK or FIVERR.

You can read a little more about working for US clients with non-US counterparties at the following links:

Advance Social Security Contributions for Self-Employed Individuals

Every self-employed individual is required to make advance social security contributions each month, with the minimum based on the minimum social security income (1,077 BGN for 2025).

At the end of the year, after calculating the actual annual income, an adjustment is made – if the profit exceeds the insured income, additional contributions are due on the difference.

Example:

  • If a freelancer chooses to contribute based on the minimum (1,077 BGN per month) but declares an annual profit of 15,000 BGN, they will need to pay additional contributions on the difference.
  • If they contribute based on a higher amount (e.g., 1,200 BGN), the amount to be topped up will be smaller.

This system applies to all self-employed individuals – lawyers, consultants, IT specialists, designers, and others.

Yes, they are obliged. According to an NRA opinion:

"Bulgarian citizens in their capacity as taxable persons or companies that receive consulting, advertising, expert, engineering and other services from a person established in an EU Member State are obliged to register under Article 97a of the VAT Act. Persons registered under this special regime shall not be entitled to a tax credit for the VAT charged on the supplies received by them."

Monthly social security contributions are declared by the 25th of the following month by submitting a declaration form 1 to the NRA.

National insurance contributions are payable in advance by self-employed persons. If, for any reason, the freelancer has not been active for a certain period of time, a declaration of suspension of insurance may be submitted and no contributions are due for that period.

According to legislation, all values in Bulgarian levs (BGN) are converted using the fixed exchange rate: 1 EUR = 1.95583 BGN

The conversion applies to:

  • Account balances (cash, bank, receivables, payables)
  • Deposits
  • Unpaid invoices and balances as of 31.12.2025
  • Opening balances in the 2026 financial statements

📌 Important:

  • The exchange rate must not be rounded.
  • Amounts converted to euro are rounded to the second decimal place (0.01 EUR).

Please, get in touch with us for more information.

Legally, it is not mandatory, but it is strongly recommended. All contracts with monetary obligations or fixed amounts in BGN should be updated through an annex that includes:

  • The new amount in EUR (calculated at the fixed rate)
  • Effective date: 01.01.2026
  • Statement that the conversion was made using the official BNB rate.

📌 This applies to:

  • Employment contracts
  • Lease and rental agreements
  • Subcontractor agreements
  • Subscription contracts
  • Credit and lease repayments

Note: There is no explicit legal requirement to amend all contracts, but doing so is advisable for legal certainty.

All financial statements for 2025 are prepared and submitted in BGN.

This includes:

  • Annual Financial Report (AFR) – due by March 31 / June 30, 2026.
  • Corporate or personal income tax returns (CIT / PIT).
  • Annual VAT return, Intrastat, and VIES.
  • Internal reports for management or auditors.

📌 Even after the euro is introduced, past period reports remain in BGN and must be retained in that form.

After 01.01.2026:

  • All invoices must be issued in euro (EUR).
  • Cash payments in BGN will be temporarily allowed only under certain conditions.
  • Banks will automatically convert BGN payments to EUR at the fixed rate (1.95583).
  • The European Central Bank (ECB) or the Bulgarian National Bank (BNB) may define the exact time frame for dual currency use.

📌 In accounting, all transactions must be recorded in EUR, including those originating from BGN payments.

  • The currency must be euro (EUR).
  • You may include a note: “Equivalent amount in BGN: … based on exchange rate 1 EUR = 1.95583 BGN”
  • Invoices in BGN cannot be issued after 01.01.2026.

Please, get in touch with us for more information.

  • All tax declarations (VAT, Intrastat, VIES) must be submitted in euro.
  • The National Revenue Agency (NRA) and Customs Agency systems are ready to accept the new formats.
  • The first VAT return in EUR will be for January 2026, with a submission deadline of February 14, 2026.

No. From January 1, 2026, all accounting documents, reports, payroll, social security contributions, and invoices must be entirely in euro.

BGN may only be temporarily used for cash transactions and transfers, but only as an auxiliary currency during the transition period.

  • Salaries will be converted into euro using the fixed rate.
  • It is not necessary to sign new employment contracts, but it is recommended to issue an annex stating the new salary in EUR.
  • All taxes, social security contributions, and payslips will also be in euro.

Yes. The value of:

  • Assets
  • Stock and inventory
  • Fixed tangible assets (FTA)

…must be converted into euro as of 01.01.2026, and recorded as the opening balances for the year.

📌 Tip: Perform a full inventory count as of 31.12.2025 to have a reliable basis for the conversion.

No, not for accounting positions converted at the fixed exchange rate.

Foreign exchange differences may arise only:

  • In transactions involving foreign currencies other than EUR
  • When a different rate is applied (e.g., bank fees, exchange rate losses at currency exchanges).
  • IBANs remain unchanged The base currency of all accounts becomes euro
  • Transfers in BGN are automatically converted.
  • Bank statements will be issued in EUR starting 01.01.2026.
  • They are kept as-is, in BGN, in accordance with the Accounting Act - for 10 years.
  • They should not be reissued or converted .
  • If payment is received after 01.01.2026, it is recorded in EUR, using the converted value.

When should I register for VAT?

If you provide services in Bulgaria, registration under the VAT Act is made when the turnover reaches BGN 100 000 for the last 12 months. When this amount is reached, registration must be made within seven days of the date on which the turnover is reached.

If you provide or receive services from other countries, you also need to register under Article 97a of the VAT Act.

It is also possible to make a voluntary VAT registration if the customer wishes.

For more information, contact us or visit the website of the National Revenue Agency.

Yes, they are obliged. According to an NRA opinion:

"Bulgarian citizens in their capacity as taxable persons or companies that receive consulting, advertising, expert, engineering and other services from a person established in an EU Member State are obliged to register under Article 97a of the VAT Act. Persons registered under this special regime shall not be entitled to a tax credit for the VAT charged on the supplies received by them."

Is Social Security Insurance Mandatory?

If you work as a self-employed person or as a company, you must take out insurance. The minimum amount on which you can pay social security contributions is 1077 BGN and the maximum - 3750 BGN. It is your monthly obligation to pay the national insurance contributions, regardless of whether you have earned any income in that month.

Contributions are a percentage of insurable income, namely:

  • Social Security (DOO) - 18.30% or 23.30% for those born before 01.01.1960
  • National Insurance (DZPO) - 5%
  • Health - 8%

If you are insured on the minimum amount of 1077 BGN, the following contributions are due:

  • Social Security - BGN 197.11.
  • National insurance - BGN 53.85
  • Health - BGN 86.16

If you are insured on the maximum amount of 3750 BGN, the following social security contributions are due:

  • Social Security - BGN 738.75
  • Social Insurance - BGN 187,50
  • Health insurance - BGN 300

Remember that the amount you are insured on should be close to your expected income for the year, as these amounts should be equalised when completing your annual tax return.

Please, get in touch with us for more information.

Advance Social Security Contributions for Self-Employed Individuals

Every self-employed individual is required to make advance social security contributions each month, with the minimum based on the minimum social security income (1,077 BGN for 2025).

At the end of the year, after calculating the actual annual income, an adjustment is made – if the profit exceeds the insured income, additional contributions are due on the difference.

Example:

  • If a freelancer chooses to contribute based on the minimum (1,077 BGN per month) but declares an annual profit of 15,000 BGN, they will need to pay additional contributions on the difference.
  • If they contribute based on a higher amount (e.g., 1,200 BGN), the amount to be topped up will be smaller.

This system applies to all self-employed individuals – lawyers, consultants, IT specialists, designers, and others.

Monthly social security contributions are declared by the 25th of the following month by submitting a declaration form 1 to the NRA.

National insurance contributions are payable in advance by self-employed persons. If, for any reason, the freelancer has not been active for a certain period of time, a declaration of suspension of insurance may be submitted and no contributions are due for that period.

How much taxes do I pay?

The annual tax payable by self-employed persons is 10% of the income for the calendar year, after deduction of 25% of statutory expenses and the amount of social security contributions paid during the year.

In case you carry out patent activity, please follow this link: Patent taxes

If you are a freelancer you are not obliged to issue receipts. However, it is necessary to issue a document showing the amount of income received. This document should contain details of the date, the business and the payer of the income.

You do not need to open a new bank account. You can use your existing personal one.

Patent tax

In the case of certain activities, such as hairdressing/beauty services, property rental, taxi transport, the law allows income to be taxed with the patent tax. The Local Taxes and Fees Act (LTFA) applies in this case..

The requirements here are that the turnover for the previous year does not exceed BGN 100,000 and that you are not registered under the VAT Act (except in cases of partial registration). The Municipal Council also determines the amount of the patent tax.

The patent tax is payable in advance four times a year in four equal instalments.

For more information, contact us or visit the National Revenue Agency website.

How are amounts converted from BGN to EUR?

According to legislation, all values in Bulgarian levs (BGN) are converted using the fixed exchange rate: 1 EUR = 1.95583 BGN

The conversion applies to:

  • Account balances (cash, bank, receivables, payables)
  • Deposits
  • Unpaid invoices and balances as of 31.12.2025
  • Opening balances in the 2026 financial statements

📌 Important:

  • The exchange rate must not be rounded.
  • Amounts converted to euro are rounded to the second decimal place (0.01 EUR).

Please, get in touch with us for more information.

Legally, it is not mandatory, but it is strongly recommended. All contracts with monetary obligations or fixed amounts in BGN should be updated through an annex that includes:

  • The new amount in EUR (calculated at the fixed rate)
  • Effective date: 01.01.2026
  • Statement that the conversion was made using the official BNB rate.

📌 This applies to:

  • Employment contracts
  • Lease and rental agreements
  • Subcontractor agreements
  • Subscription contracts
  • Credit and lease repayments

Note: There is no explicit legal requirement to amend all contracts, but doing so is advisable for legal certainty.

All financial statements for 2025 are prepared and submitted in BGN.

This includes:

  • Annual Financial Report (AFR) – due by March 31 / June 30, 2026.
  • Corporate or personal income tax returns (CIT / PIT).
  • Annual VAT return, Intrastat, and VIES.
  • Internal reports for management or auditors.

📌 Even after the euro is introduced, past period reports remain in BGN and must be retained in that form.

After 01.01.2026:

  • All invoices must be issued in euro (EUR).
  • Cash payments in BGN will be temporarily allowed only under certain conditions.
  • Banks will automatically convert BGN payments to EUR at the fixed rate (1.95583).
  • The European Central Bank (ECB) or the Bulgarian National Bank (BNB) may define the exact time frame for dual currency use.

📌 In accounting, all transactions must be recorded in EUR, including those originating from BGN payments.

  • The currency must be euro (EUR).
  • You may include a note: “Equivalent amount in BGN: … based on exchange rate 1 EUR = 1.95583 BGN”
  • Invoices in BGN cannot be issued after 01.01.2026.

Please, get in touch with us for more information.

  • All tax declarations (VAT, Intrastat, VIES) must be submitted in euro.
  • The National Revenue Agency (NRA) and Customs Agency systems are ready to accept the new formats.
  • The first VAT return in EUR will be for January 2026, with a submission deadline of February 14, 2026.

No. From January 1, 2026, all accounting documents, reports, payroll, social security contributions, and invoices must be entirely in euro.

BGN may only be temporarily used for cash transactions and transfers, but only as an auxiliary currency during the transition period.

  • Salaries will be converted into euro using the fixed rate.
  • It is not necessary to sign new employment contracts, but it is recommended to issue an annex stating the new salary in EUR.
  • All taxes, social security contributions, and payslips will also be in euro.

Yes. The value of:

  • Assets
  • Stock and inventory
  • Fixed tangible assets (FTA)

…must be converted into euro as of 01.01.2026, and recorded as the opening balances for the year.

📌 Tip: Perform a full inventory count as of 31.12.2025 to have a reliable basis for the conversion.

No, not for accounting positions converted at the fixed exchange rate.

Foreign exchange differences may arise only:

  • In transactions involving foreign currencies other than EUR
  • When a different rate is applied (e.g., bank fees, exchange rate losses at currency exchanges).
  • IBANs remain unchanged The base currency of all accounts becomes euro
  • Transfers in BGN are automatically converted.
  • Bank statements will be issued in EUR starting 01.01.2026.
  • They are kept as-is, in BGN, in accordance with the Accounting Act - for 10 years.
  • They should not be reissued or converted .
  • If payment is received after 01.01.2026, it is recorded in EUR, using the converted value.
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