More and more Bulgarian influencers are earning an income through global platforms like YouTube, TikTok, Instagram, and Patreon. This opens doors to a wider audience and new opportunities for profit, but it also brings specific tax and social security requirements.
First and foremost, the most important question you need to ask yourself is what legal form your business takes. The majority of digital creators start out as individuals who receive income from various sources, such as advertising (via Google AdSense), direct donations, sponsorships, memberships (Patreon), or paid content. Under Bulgarian law, these earnings are classified as income from an individual’s commercial activity. This means you are required to declare them to the National Revenue Agency (NRA) and pay the corresponding taxes and social security contributions. It’s very important to note that even if your initial income is insignificant, it is still subject to declaration.
A common mistake is to assume that income received from foreign companies like Google or TikTok is “invisible” to the tax authorities. However, banks have a duty to provide information to the NRA, especially for high-volume or frequent transactions.
To avoid penalties and take advantage of social and health rights, influencers must know how to properly account for this income.
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What Is Considered Foreign Income?
Influencers receive payments through:
- Advertising revenue (e.g., YouTube Partner Program)
- Creator funds (TikTok, Meta)
- Sponsorships and brand partnerships
- Subscriptions and membership programs (Patreon, OnlyFans, etc.)
- Affiliate marketing
All of these earnings are considered foreign income because the platforms are registered outside of Bulgaria. Payments can be received via PayPal, bank transfer, or other payment systems, but this does not exempt you from the obligation to declare them.
Choosing a Legal Structure
Once we establish that income from online platforms is taxable, the next question is how to declare it. Influencers can operate in two main ways:
- Sole Proprietorship (ET/Self-employed person): Suitable for beginners and for smaller incomes. Registration is quick and simple.
- Single-Person Limited Liability Company (EOOD): Requires more administrative work but offers limited liability and a corporate tax rate of 10% + 5% on dividends. It is suitable for higher incomes.
After registering with the NRA, a unique company registration number (EIK) is issued. If your turnover exceeds BGN 100,000 in the last 12 months, VAT registration becomes mandatory.
Declaration is done through the Annual Tax Return under Art. 50 of the Personal Income Tax Act. In this declaration, Appendix 3 is used to fill in income from commercial activity. Here, you should list the total amounts received from all sources – AdSense, TikTok Creator Fund, donations from streaming platforms, and so on.
To calculate your taxable income, you must deduct legally recognized expenses. For income from the commercial activity of individuals who are not registered as sole proprietors, the law provides for a standard deduction of 25%. This means that 25% is deducted from your total income, and tax is owed on the remaining 75%. For example, if you received BGN 10,000 for the year, BGN 2,500 is considered an expense, and the tax is calculated on BGN 7,500. The tax rate is 15% on this taxable income.
VAT Requirements
- Threshold: Mandatory VAT registration if turnover exceeds BGN 100,000.
- Bulgarian clients: 20% VAT is charged.
- EU clients (VAT registered): The reverse charge mechanism applies.
- Non-EU clients: The service is usually zero-rated, provided there is proof of the client’s location.
Social Security Contributions
Another key aspect that is often overlooked is social security legislation. Income from the commercial activity of individuals not registered as sole proprietors is subject to social security contributions. You are obligated to be insured as a self-employed person. This includes contributions for pensions (Pension Fund) and health insurance. The insurable income, on which contributions are calculated, cannot be lower than the minimum insurable threshold set by the state for the respective year. To pay these contributions, you need to register as a self-employed person with the NRA by submitting an OKD-5 declaration. Contributions are paid monthly, and their final amount is reconciled after the submission of the annual tax return. Failure to pay contributions can lead to serious penalties and the accrual of interest.
Many digital creators whose income is growing choose to register their own company, most often a Sole Proprietorship (ET) or a Limited Liability Company (OOD). This step provides greater flexibility and business transparency. As a company, your expenses can be fully recognized, as long as they are documented. This means you can deduct expenses for equipment, software, advertising, internet, studio rent, and other costs directly related to your activity. The tax treatment is also different – the company’s profit is taxed with a 10% corporate tax. In addition, if you decide to withdraw dividends from your company, they are taxed with a 5% dividend tax. While it may sound more complicated, registering a company is often more beneficial in the long run, especially when your income becomes significant.
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One of the best decisions you can make as a digital creator, given all these legal requirements, is to seek the help of a licensed accountant. Accounting services are not just an expense; they are an investment in your peace of mind and security. A qualified accountant can help you choose the most suitable legal structure for your business, whether to remain an individual or register a company. They will handle all necessary registrations, advise you on deductible expenses, and prepare and submit all required declarations on time. This way, you can focus on what you do best – creating content – while a professional handles the financial and legal side of things. Avoiding potential mistakes and fines from the NRA far outweighs the initial investment in accounting services.
Final Thoughts
In conclusion, declaring income from online platforms is mandatory and not that complicated once you understand the basic principles. Whether you are an individual or a business owner, legal requirements must be followed. Early consultation with an accountant and regular record-keeping will guarantee your peace of mind and allow you to develop your digital career without worrying about potential tax audits and penalties. The digital content market in Bulgaria and worldwide continues to evolve, and so do the rules of the game. Stay informed, be responsible, and invest in professional help to ensure the success of your business.
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For personalized guidance, consult with a qualified accountant or tax advisor.
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