As of February 2026, the IT sector in Bulgaria is at the epicenter of the most significant financial transformation in decades. With the adoption of the Euro and the introduction of the new “Special Scheme for Small Enterprises” (SME Scheme), freelancers in software development, cybersecurity, and IT consulting have new tools for growth, but also new responsibilities regarding daily reporting.
The VAT Revolution: How to Work in the EU Without Registration
The most significant change in 2026 is the ability for IT freelancers to work with clients across the EU without mandatory VAT registration, provided they meet the new European limits.
- The National Threshold: This is now fixed at 51,130 EUR. Turnover is monitored for the calendar year (starting January 1st), not for the trailing 12 months. This requires daily verification of incoming funds.
- The “-EX” Regime: If your total turnover within the entire European Union is under 100,000 EUR, you can apply for a special identification number with the suffix “-EX”. This allows you to provide services to companies in Germany, France, or Greece without charging VAT and without registering for VAT in those countries. You can read more about the procedure in New VAT Rules in 2026.
Free 30-minute consultation for new clients.
The Chessboard: EOOD (LLC) or Freelance Professional?
In the context of the Eurozone, the choice of legal form takes on new significance due to changes in social security thresholds and the ease of payments across the EU.
- Freelance Professional (Self-Employed): Ideal for those with minimal expenses. The state automatically recognizes 25% statutory expenses. In 2026, social security is paid on a chosen income in Euro, and tax is 10% on the remainder.
- EOOD Registration (Single-Member LLC): This option is becoming increasingly preferred for IT specialists investing in expensive equipment. With an EOOD, taxation is a 10% corporate tax on profit. If you buy a server or workstation for 5,000 EUR, you can deduct this expense entirely, whereas, with a freelance profession, it is “absorbed” into the standard 25%.
For a detailed comparison, see our analysis: Pros and Cons of EOOD vs. Freelance Professional.
Documenting “Home Office” Expenses
Since the majority of IT freelancers work from home, in 2026 the National Revenue Agency (NRA) is paying special attention to utility bills. If you operate through an EOOD, you can recognize part of the costs for electricity, internet, and rent, but only through a properly drafted rental contract for the workspace. Full instructions can be found in Documenting Home Office Expenses 2026.
Author
