Platforms like Amazon KDP (Kindle Direct Publishing) have transformed book publishing. Today, anyone can write a novel, a children’s book, or a planner and sell it globally without relying on a traditional publisher. However, when the first payments start arriving in your account, the euphoria quickly collides with administrative reality: „How do I declare this money to the NRA?“.
Reporting income from creative works has its specifics, but the news is mostly good – the state provides significant tax breaks for creators. Here is what you need to know in 2026.
1. The Role of the ISBN: More than just a barcode
Before you publish your book, you usually face the question of whether to buy your own ISBN (International Standard Book Number) or use the free one provided by Amazon.
From a tax and legal perspective, the ISBN is the „ID card“ of your book.
- Proof of authorship: Having an ISBN in your name (or the name of your publishing house) clearly legitimizes the product as a „book“ and you as its legal author before the Bulgarian institutions.
- VAT rates: A reduced VAT rate applies to the sale of physical and electronic books (e-books) with an ISBN.
- Global distribution: If you use the free ISBN from Amazon, your book can only be sold there. Your own ISBN allows you to distribute it in any other platform or physical bookstore.
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2. Tax Deductions: The Privilege of 40% Recognized Expenses
The income you receive from Amazon KDP (royalties) is treated by the NRA as copyright and license royalties. This is the most advantageous taxation method for individuals in Bulgaria.
- Statutory recognized expenses: As an author, the law allows you to deduct a full 40% of your gross income as „creation expenses“ for the work. You do not have to prove these expenses with invoices – you are entitled to them by right.
- How it is calculated: If Amazon pays you 1,000 BGN, you deduct 40% (400 BGN). You owe tax (10%) and potential social security contributions only on the remaining 600 BGN.
If you also write blog articles in addition to books, see the details in Accounting Nuances for Copywriters and Authors in 2026. For cases where your income is mixed with other services, review Mixed royalties: Tax and social security reliefs for authors.
3. W-8BEN and Avoiding Double Taxation
Amazon is an American company. By default, the US tax authorities (IRS) withhold a 30% tax on income generated from the US market before even sending it to you.
To avoid this, you must complete the Tax Interview in your KDP account and generate a W-8BEN form. Because Bulgaria has a Double Taxation Avoidance Agreement with the US, this form reduces the tax withheld in America to 5%. You pay the rest in Bulgaria through your annual tax return.
4. Declaring to the NRA
The money from Amazon is not automatically taxed in Bulgaria. You are responsible for declaring it.
- When: Every year between January 10 and April 30, you submit an Annual Tax Return under Article 50.
- Where: Income from Amazon KDP is filled out in Annex 3 (for income from other economic activities), in the column for copyright and license royalties.
- If you miss the deadline or do not know where to start, read When and Who Must File an Annual Tax Declaration?.
5. Do you need VAT registration?
Even though you are selling as an individual – author, you enter into relationships with foreign platforms (Amazon, Facebook Ads).
- If you pay to advertise your books on Amazon Advertising, you are receiving a service from a foreign entity.
- In this case, an obligation arises for specific VAT registration (under Art. 97a), which you must do before launching your first ad. Learn how this works in What Does Reverse VAT Charging Mean?.
Conclusion
Publishing original books through KDP is a great model for passive income. The tax legislation in Bulgaria is extremely favorable for authors thanks to the 40% statutory recognized expenses. The key to peace of mind is correctly filling out the American W-8BEN form and strictly filing an annual tax return in Bulgaria.
