Profession photographer? If you’re wondering what form to choose for your business, then it’s important to know that the choice between freelancing and registering a company depends on the scale of your business, your expected revenue and how you plan to work with clients.
Freelancing
Freelancing is a popular choice among photographers starting their practice as the registration process is relatively easy and the maintenance costs are minimal. This form is suitable if:
- You work independently.
- You don’t have significant equipment or studio rental costs.
- Your clients are primarily individuals or small businesses.
- You don’t plan to hire staff or work in a team.
- Your income does not exceed the thresholds for compulsory VAT registration.
- You want to minimise administrative effort and focus on your creative work.
Company (sole trader, Ltd.)
Establishing a company (ET, LLC) is suitable for photographers who plan to expand their business, work with larger clients or hire a team. This legal form provides more options but also requires higher administrative and accounting costs.
The company is suitable if:
- You want to expand your business and work with larger corporate clients.
- You plan to hire staff or work in a team (e.g. assistants, other photographers, make-up artists).
- Looking for a professional image and the opportunity to sign contracts with corporate entities.
- You are investing heavily in equipment, studio or advertising.
- You work with foreign clients or platforms and need to register for VAT.
- You want to separate your personal finances from those of the business to limit personal liability (especially in the case of an LLP).
- You plan to run training courses, workshops or sell photographic products (e.g. photos, calendars) on a larger scale.
- You want to be able to apply for projects, grants or public contracts that require registration as a legal entity.
Expenses and tax relief for photographers
Freelance Expense Reporting
As a person registered as a freelancer, you may benefit from statutory expenses. This means that the law automatically deducts 25% of your income as expenses, without you needing to prove or document exactly what expenses you have incurred.
Advantages:
- Easy and no need to keep invoices and expense documents.
- Suitable for photographers with low costs or those who work individually and offer services to smaller clients.
Example:
If you earned 10,000 BGN for the year, the tax base will be calculated based on that amount—25% of the allowable costs—the cost of National Insurance.
Accounting for expenses in a company (sole trader, LTD)
When you are registered as a company, you can report the actual costs incurred for your business. This requires you to keep invoices, receipts and other documents, but allows you to deduct a significantly wider range of expenses. Here’s which expenses can be recognized:
- Equipment and software purchases: Cameras, lenses, tripods, drones, computers, monitors, and licenses for programs like Lightroom, Photoshop, or other software solutions.
- Training and courses: Participation in workshops, seminars and online courses related to improving your skills.
- Travel: Expenses for transportation (gas, airfare) and lodging when you need to travel out of town or out of the country for photo shoots.
- Studio or office rent: If you work in a rented space, you can deduct rent, electricity, water, and internet costs associated with your work.
- Marketing and Advertising: Costs to set up a website, online ads (Google Ads, Facebook), and print promotional materials (business cards, brochures).
- Communications and software: Cloud subscriptions (Dropbox, Google Drive) and internet and phone costs.
- Maintenance and Supplies: Equipment repairs, batteries, memory cards, and other supplies needed for your operation.
- Insurances: Equipment insurance or third-party liability insurance when working with clients.
- Selling photos online: If you sell photos through international platforms, you can deduct the cost of subscriptions, commissions and other fees associated with the platforms.
- Depreciation of equipment: Expensive cameras, lenses and computers can depreciate over a period of time, further reducing the tax base.
Selling photos online – what do you need to know?
Working as a photographer often involves selling photos online through platforms such as Shutterstock, Adobe Stock and others. Here’s what’s important to keep in mind:
Taxation of income from online platforms
Income is considered business income:
- Income from selling photos on online platforms is considered a business activity.
- Whether you are registered as a freelancer or a company, the income from these platforms must be declared on your annual tax return.
Taxation under different legal forms:
- Freelance: tax is 10% on income after deduction of statutory expenses (25% or 40% for royalties).
- Company: Income is taxed at 10% corporation tax. If you withdraw profits as a dividend, an additional 5% is due.
VAT registration
When is registration required?
If you sell photos to customers or platforms in the EU but do not charge VAT, you must register under Article 97a of the VAT Act. This registration is compulsory if you provide services to non-residents (platforms) with a valid VAT number.
Registration is also compulsory if your turnover exceeds 166,000 BGN per year.
How is VAT calculated and submitted?
For platforms such as Shutterstock or Adobe Stock that are based outside Bulgaria, the income usually falls under the reverse charge mechanism. This means that you will not be charged VAT, but you must file the relevant returns with the NRA.
Expenses related to the sale of photos online
One of the main benefits of legal registration is the ability to deduct specific business-related expenses. Here’s what you can include if you’re registered as a company:
Platform fees and commissions:
Shutterstock, Adobe Stock and others take a percentage of your revenue – these fees are considered an expense and reduce your tax base.
Hosting and maintenance of a personal website: If you sell photos through your own platform, the cost of the domain, hosting and maintenance may be deductible.
Processing software and cloud services: Licenses for Photoshop, Lightroom, and cloud storage subscriptions such as Dropbox and Google Drive.
International transfer fees: If the platform transfers funds via PayPal, Stripe or directly into your bank account, transaction fees can also be reported as an expense.
Documentation of Revenue
Invoices:
When working with international platforms, such as Shutterstock or Adobe Stock, you usually don’t need to issue an invoice on your end. However, it’s important to keep the documents provided by the platforms, such as earnings reports and fees deducted.
If you sell photos through a personal website or directly to individual clients, issuing an invoice is a must. This ensures transparency and honesty in your reporting.
Reporting:
All income must be declared in the annual tax return (for a freelancer) or in the monthly VAT returns (for a company).
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Working with other specialists
Photography often requires collaboration with other professionals such as makeup artists, stylists, designers, assistants, marketers, videographers and more. This partnership is important both for the successful completion of creative projects and for expanding the scope of your business. Your choice of legal form – freelance or company – affects how you can organize and report on these partnerships.
Freelance
Civil contract
One option for collaboration is through civil contracts. This approach is convenient for short-term projects, such as hiring a makeup artist for a specific photo shoot or a designer to process images. Civil contracts are easy to administer and allow for documented cost accounting.
It is important to bear in mind that if you are paying a fee to an individual, you, as the principal, may have an obligation to withhold and pay tax on that fee.
This type of collaboration is practical for one-off or short-term projects, but has its limitations – you cannot employ people on contract, which makes setting up a permanent team more difficult.
Contracting with Sole Traders (ET), Single-Member LLCs (EOOD), and Limited Liability Companies (OOD)
Another option is to collaborate with professionals who are registered as a company. For example, if you hire a makeup artist or stylist operating as an EOOD or OOD, they will issue you an invoice for the provided service.
This approach is especially beneficial for larger or specialized projects, as the company manages its own accounting and tax obligations, relieving you of responsibilities such as withholding taxes.
Additionally, invoices received from these professionals can be recorded as business expenses, allowing you to optimize your financial management and maintain accurate accounting. This not only simplifies administration but also provides better budget control for projects.
Company
Flexibility and Team Collaboration Opportunities
A company structure offers greater flexibility compared to freelance registration. It allows you to:
- Hire specialists under employment contracts or service agreements – ideal for long-term projects or when building a stable team.
- Work with other companies or freelancers, where their services can be accounted for as business expenses, reducing your taxable income.
Financial Advantages
- Salaries and social security contributions for employees are considered recognized business expenses, which reduce the company’s taxable base.
Administrative Burden
The administrative burden of running a company is higher, as it requires regular tax declarations to the National Revenue Agency (NAP) and detailed accounting records. However, this structure allows you to take on larger and more profitable projects, which often require a higher level of organization and compliance.
Choosing a company is suitable for photographers who plan to expand their business, want to work with larger clients, or need a permanent team. This gives you the opportunity to better position yourself in the market and take advantage of more business opportunities.
Working in a Foreign Studio or Your Own Studio?
The choice between renting or establishing your own studio is a key decision for photographers, depending on the scale of operations, budget capabilities, and professional goals. Whether you use a foreign studio or build your own, it is essential to properly organize your accounting and documentation to optimize expenses and comply with legal requirements.
Renting a Studio
Freelancer
- When renting a studio, expenses must be documented with an invoice or a rental agreement.
- The rental invoice can be included in the tax declaration as part of the expenses for your professional activity.
- If the studio is rented for a specific project, it is advisable to clearly distinguish between personal and professional expenses.
Company
- Invoices for renting an external studio are recorded as an operational expense in the company’s accounting.
- If the client covers the studio expenses, this must be recorded as income, while the rental amount can be directly deducted from the revenue.
- If you frequently work in external studios, it is important to maintain proper documentation, including contracts, payment records, and invoices.
Advantages of Working in External Studios
- Easy access to fully equipped spaces without the need for investment in your own studio.
- Opportunity for variety – different studios offer unique styles and locations.
Disadvantages of Working in External Studios
- You must adhere to the studio’s schedule.
- Lack of personalization and control over the space.
Own Studio
Having your own studio is a long-term investment that provides greater stability and control over the work process.
Purchase Through a Company
If you operate as a company, you can purchase the studio as an asset. This allows for depreciation accounting, as well as the inclusion of expenses for maintenance, repairs, electricity, water, and internet in the company’s financial records.
Depreciation reduces the company’s taxable base, which is an advantage for high-value assets.
Personal Property Used for Business
If you work as a freelancer and the studio is your personal property, expenses related to its use (electricity, water, internet) can be partially recognized, provided there is a clear connection to your professional activities.
Advantages
- Full freedom for personalization and building a brand identity.
- Opportunity to rent out the space, generating additional income.
Disadvantages
- High initial investment for purchase and equipment.
- Responsibility for maintenance and repair costs.
Cash Receipts, Invoicing, and Accounting
Cash Receipts
Freelancers:
If you work as a freelance photographer and accept payments exclusively via bank transfer, you are not required to use a cash register. However, you must document all income with invoices, especially if requested by the client.
For cash payments, you may use a receipt book if the legislation allows it for your specific case, but issuing invoices is recommended for full transparency.
Companies:
If you operate as a business entity (ET, EOOD, OOD) and work with clients in person, a cash register is mandatory for cash payments. A cash receipt must be issued for every transaction and provided to the client.
Payments made via bank transfer do not require a cash receipt but must be recorded in accounting with an invoice.
For mixed payments (partially in cash, partially via bank transfer), both components must be properly documented—a cash receipt for the cash payment and an invoice for the total amount.
Invoicing
Issuing Invoices:
Regardless of whether you operate as a freelancer or a business entity, issuing an invoice is mandatory if requested by the client. This applies to both individuals and companies.
For international clients, especially within the EU, invoices must comply with VAT regulations.
Invoices Must Include:
- Name and details of the photographer/company.
- Client details.
- Description of the service.
- Date of issuance and invoice number.
Invoicing for International Projects:
If you work with clients within or outside the EU, VAT registration may be required, especially if the client is a VAT-registered company.
For clients in the EU, registration under Article 97a of the VAT Act may be necessary, allowing you to apply the reverse charge mechanism.
If your turnover exceeds 166,000 BGN, VAT registration becomes mandatory.
Invoicing in Different Scenarios:
- For Selling Photos Online: When selling through platforms like Shutterstock or Adobe Stock, you must keep the revenue documents issued by the platform.
- For Services to Individuals: Clients may request an invoice for services such as wedding or corporate photoshoots.
Conclusion
Working as a photographer offers incredible freedom, creativity, and professional growth opportunities, but choosing the right legal structure—freelancer or company—is crucial for the successful management of your business.
Each option comes with its advantages and challenges, and the right decision depends on the scale of your projects, your expansion plans, and your administrative preferences.
As a freelancer, you can focus on your creative work with minimal administrative duties, while a company allows you to build a larger business, take on big projects, and work with corporate clients.
Regardless of your choice, proper accounting management will save you stress and optimize your expenses, which is key to long-term success.
