VAT Registration in Bulgaria — When, How & Why (2026)

What you will learn

• When VAT registration is mandatory and what the new 2026 threshold means for your business.
• The six types of VAT registration and which one applies to you.
• What changed with the new definition of taxable turnover (Article 168v of the VAT Act).
• How the SME regime works — domestic and cross-border (Article 168g of the VAT Act).
• When voluntary registration makes financial sense.
• What freelancers and IT professionals using Google, AWS or Stripe need to know.
• The registration procedure step by step — documents, deadlines, filing.
• What penalties apply for non-compliance.

What is VAT and why does it matter?

Value added tax (VAT) is an indirect tax charged on most goods and services at every stage of the supply chain. Bulgaria's standard rate is 20 %, with a reduced rate of 9 % for hospitality, restaurants, books and certain other categories.

VAT is harmonised across the European Union, which means Bulgaria's VAT Act follows the framework of Directive 2006/112/EC. The 2026 changes stem directly from Directive (EU) 2020/285 on the special scheme for small enterprises.

For your business, VAT registration has three main consequences:

1. Obligation to charge VAT — once registered, you add 20 % VAT to the price of your goods and services.
2. Right to input VAT credit — you can deduct the VAT you paid to your suppliers.
3. Administrative burden — you file monthly VAT returns, maintain purchase and sales ledgers, and issue invoices in a prescribed format.

The balance between these three elements determines whether and when VAT registration works in your favour.

Types of VAT registration

The VAT Act provides several different grounds for registration. The table below compares the six main types, followed by detailed analysis of each.

Note: The date on which the registration obligation arises is now governed by Article 103 of the VAT Act (new), which introduces clear rules on the moment of registration and the start of obligations.

Mandatory registration — the EUR 51,130 threshold

The basic rule (Art. 96 VAT Act)

Mandatory VAT registration applies when a taxable person's taxable turnover reaches or exceeds EUR 51,130 within the current calendar year.

This is one of the most significant changes from 2026. Until the end of 2025, the threshold was calculated on a rolling 12-month basis. From 1 January 2026, the reference period is the calendar year — 1 January to 31 December.

What counts toward taxable turnover?

Article 168v of the VAT Act (new) redefines taxable turnover for threshold purposes. The new definition includes:

• Taxable supplies of goods and services made within the territory of Bulgaria.
• Supplies of immovable property — even when exempt under Article 45 of the VAT Act. This is a major change: until 2025, exempt real estate transactions were excluded from the turnover calculation.
• Financial and insurance services — when they are not ancillary but constitute the person's main activity. This is another new addition.

Daily monitoring requirement

Another novelty is the requirement to monitor turnover on a daily basis. If on 15 June you complete a transaction that pushes your cumulative turnover for the current calendar year above EUR 51,130, the obligation to file a registration application arises within 7 days of that date — i.e. by 22 June.

In practice, this means your business must maintain an up-to-date running total of taxable turnover and track the threshold in real time, rather than reviewing it only at month-end.

Example

Alfa EOOD provides consulting services. From 1 January to 20 April 2026, cumulative taxable turnover is EUR 48,000. On 21 April, the company issues an invoice for EUR 4,000. Total turnover becomes EUR 52,000, which exceeds the EUR 51,130 threshold. Alfa EOOD must file a VAT registration application with the National Revenue Agency (NRA) by 28 April 2026 at the latest.

What happens after filing?

The NRA carries out a verification and issues a registration certificate within 7 days of the application. Under Article 103 of the VAT Act (new), the date of registration is the date the certificate is served. From that date, all obligations arise — charging VAT, filing returns, and maintaining ledgers.

Voluntary registration — when does it pay off?

Under Article 100 of the VAT Act, any taxable person may register for VAT voluntarily, regardless of turnover. The question is: when does this make financial sense?

When voluntary registration is beneficial

1. Businesses with large start-up investments

If you are launching a business that requires significant spending on equipment, office fit-out, software or marketing, the VAT on those expenses can be recovered as input VAT credit. On an investment of EUR 50,000, the input credit is EUR 10,000 — a sum that can be decisive for a start-up.

2. Companies whose clients are VAT-registered (B2B)

When your clients are VAT-registered, they deduct the VAT you charge. The final cost to them is the same — with or without VAT. But if you are not registered, you cannot claim input VAT credit on your own expenses, which means you effectively pay more.

3. Exporters and cross-border service providers

Exports of goods are taxable at a zero rate (0 % VAT), but to apply that rate you must be VAT-registered. You then charge 0 % to your customers while deducting 20 % on your Bulgarian expenses — the net financial effect is positive.

4. IT companies and SaaS businesses

If you provide software services to clients in the EU or beyond, voluntary registration lets you claim input VAT credit on equipment, rent and other costs, while your supplies abroad are often zero-rated or outside the scope of VAT.

When voluntary registration is NOT beneficial

1. B2C businesses with low margins

If your clients are individuals (not VAT-registered), adding 20 % to your prices can make you uncompetitive. If you absorb the tax instead, your margin shrinks.

2. Small businesses with minimal expenses

If you have few incoming invoices with VAT (for example, a freelancer working from home with no rent), the input credit will be negligible and the administrative burden disproportionate.

3. Businesses in a transitional phase

If your turnover is close to the threshold but you are not sure you will reach it, it may be sensible to wait. Registration is straightforward, but deregistration requires closing out all VAT obligations and may trigger an audit.

Practical analysis

Tip: Before deciding, run a specific calculation for your business. Consider not just the input credit, but also the administrative costs — accountancy fees, invoicing software, time spent preparing returns.

Special registration under Article 97a of the VAT Act

When does the obligation arise?

Registration under Article 97a is mandatory for any taxable person established in Bulgaria that:

1. Receives services with a place of supply in Bulgaria from a supplier established in another EU Member State or a third country; or
2. Supplies services with a place of supply in another EU Member State.

Why is this so relevant?

This registration affects a large number of Bulgarian businesses and freelancers who may not even be aware of the obligation. If you use any of the following services, you likely fall within the scope of Article 97a:

• Google Ads / Google Workspace — advertising and cloud services from Google Ireland Ltd.
• Meta (Facebook/Instagram) Ads — advertising services from Meta Platforms Ireland Ltd.
• Amazon Web Services (AWS) — cloud infrastructure from Amazon Web Services EMEA SARL (Luxembourg).
• Microsoft Azure / Microsoft 365 — cloud services from Microsoft Ireland Operations Ltd.
• Stripe — payment processing from Stripe Payments Europe Ltd. (Ireland).
• Booking.com — commissions from Booking.com B.V. (Netherlands).
• Mailchimp, HubSpot, Slack, Zoom, Notion, Figma — and many other SaaS platforms with European legal entities.

How does it work in practice?

When, for example, Google Ireland Ltd. invoices you EUR 500 for Google Ads without VAT (because it applies the reverse charge mechanism), you are required to:

1. Register under Article 97a (if you have not already done so).
2. Self-assess 20 % VAT on the value of the service — i.e. EUR 100.
3. Report this in the monthly VAT return.
4. Remit EUR 100 to the budget.

Important: With a registration only under Article 97a (without full VAT registration), you have no right to input VAT credit. This means the EUR 100 VAT is a pure cost to you.

Practical example for a freelancer

Maria is a graphic designer working as a freelancer from home. Her annual turnover is EUR 18,000 (well below the mandatory registration threshold). She uses Adobe Creative Cloud (EUR 55/month from Adobe Systems Software Ireland Ltd.) and Google Workspace (EUR 12/month). In total, she receives services from the EU worth EUR 804 per year.

Maria is required to register under Article 97a and self-assess 20 % VAT on these amounts — EUR 160.80 per year. If she fails to do so, she faces a penalty of EUR 250 to EUR 5,000.

Alternative: If Maria registers voluntarily under Article 100 of the VAT Act (full registration), she can claim input VAT credit for that EUR 160.80 and for all other incoming invoices with VAT. But she will need to charge 20 % VAT to her clients.

Deadline and procedure

The application for registration under Article 97a must be filed no later than 7 days before the date the taxable event occurs — i.e. before you receive or supply the service. In practice, this means you must register before you start using the service.

The new SME regimes from 2026

What is the SME regime?

SME stands for Small and Medium Enterprise. With the amendments to the VAT Act that took effect on 1 January 2026 (transposing Directive (EU) 2020/285), two new regimes were introduced under Article 168g.

Domestic SME regime (within Bulgaria)

The domestic SME regime allows small enterprises with annual turnover below EUR 51,130 to be exempt from charging VAT — even without formal deregistration. This is an exemption regime, not a complete exclusion from the VAT system.

Key features:

• The person does not charge VAT to clients.
• The person does not claim input VAT credit.
• The person is subject to certain reporting and notification obligations.
• If turnover exceeds the threshold, the exemption ceases to apply.

Cross-border SME-EX regime (within the EU)

This is the genuine novelty of 2026 — for the first time, a small enterprise established in Bulgaria can benefit from a VAT exemption in another EU Member State without registering there.

Conditions for applying the regime:

1. Annual EU-wide turnover (all Member States, including Bulgaria) does not exceed EUR 100,000.
2. Annual turnover in the specific Member State where the exemption is sought does not exceed the national threshold of that state.
3. The person has obtained a prior EX identification number from the NRA.

How does it work in practice?

Beta EOOD provides online marketing services. Annual turnover is EUR 35,000, of which EUR 8,000 comes from clients in Germany (B2C supplies). Without the SME-EX regime, Beta EOOD would need to register for VAT in Germany (or use the OSS) and charge 19 % German VAT.

With the SME-EX regime, if total EU turnover is below EUR 100,000 and turnover in Germany is below the German threshold (EUR 22,000), Beta EOOD can apply the exemption — no VAT in Germany, no registration there. Only an EX identification number obtained from the NRA is required.

Limitations:

• The person cannot claim input VAT credit for supplies covered by the regime.
• A quarterly turnover report by Member State must be filed.
• If any threshold is exceeded, the exemption lapses and VAT is due from the moment of the excess.

Who should consider the SME-EX regime?

• Small online shops selling digital products in the EU.
• Freelancers providing services to individuals in various EU Member States.
• Micro-enterprises with cross-border activity and limited turnover.

Step-by-step VAT registration procedure

Step 1: Determine the type of registration

Before filing an application, establish which legal basis applies — mandatory (Art. 96), voluntary (Art. 100), Article 97a, intra-Community acquisition (Art. 99) or SME regime (Art. 168g). The legal basis determines the documents, deadlines and subsequent obligations.

Step 2: Prepare the required documents

For mandatory or voluntary registration, you will need:

• Registration application — the prescribed form under Art. 96 or Art. 100, filed electronically through the NRA portal.
• Turnover statement — broken down by month for the current calendar year (for mandatory registration).
• Statement of supplies made, including taxable amounts.
• Business documents — contracts, invoices, bank statements.
• Proof of ownership or lease of the premises from which the activity is carried out (if applicable).
• Qualified electronic signature (QES) — required for electronic filing.

Step 3: File the application with the NRA

The application is filed:

• Electronically through the NRA portal (https://portal.nra.bg) — using a QES. This is the recommended and fastest method.
• On paper — at the competent territorial directorate of the NRA where the person is registered.

Step 4: NRA verification

The NRA carries out a verification within 7 days of the application. During the verification, the revenue authorities may:

• Request additional documents.
• Conduct an on-site visit.
• Verify the declared turnover.

Step 5: Receive the registration certificate

If approved, the NRA issues a registration certificate specifying:

• The VAT identification number (BG + company identification number).
• The date of registration (under Art. 103 of the VAT Act).

Step 6: Obligations begin

From the date of registration, you are required to:

• Charge VAT (20 % or the applicable rate) on all taxable supplies.
• Issue tax invoices containing the mandatory elements under Art. 114 of the VAT Act.
• File a monthly VAT return and purchase and sales ledgers — by the 14th day of the month following the tax period (Art. 125 of the VAT Act).
• Remit the VAT due within the same deadline.

Step 7: Organise your accounting

If you do not yet have an accountant experienced in VAT, now is the time. VAT registration significantly increases the administrative burden, and errors can lead to penalties.

Deregistration

Voluntary deregistration (Art. 108 VAT Act)

You may file an application for deregistration when:

• Your turnover for the last two consecutive calendar years is below the EUR 51,130 threshold (for persons registered on a mandatory basis).
• You decide to cancel your VAT registration (for voluntarily registered persons — at any time, but not earlier than 12 months from the date of registration).

Mandatory deregistration

Mandatory deregistration takes place upon:

• Dissolution of the legal entity (liquidation, insolvency).
• Cessation of the activity of a natural person — sole trader or freelancer.
• Death of the natural person (for sole traders).

Consequences of deregistration

Upon deregistration, VAT must be self-assessed on all remaining assets (goods, tangible fixed assets) for which input VAT credit was claimed. This can result in a significant tax liability.

Example: If upon deregistration you have inventory valued at EUR 20,000 for which you claimed input credit, you will owe VAT of EUR 4,000.

Deregistration should therefore be carefully planned — ideally after depleting inventories.

Penalties

Breaches of the VAT Act carry serious financial consequences. Below are the main penalties related to VAT registration and obligations.

Warning: In addition to financial penalties, the NRA can take enforcement measures in cases of systematic non-compliance — freezing bank accounts, placing charges on assets, or even initiating criminal proceedings in cases of tax fraud.

Frequently asked questions

Conclusion

VAT registration is among the most consequential tax decisions for any business operating in Bulgaria. With the 2026 changes — the new EUR 51,130 calendar-year threshold, the expanded definition of taxable turnover, daily monitoring requirements and the SME regimes — the topic is more relevant than ever.

Getting your VAT structure right can save you thousands of euros per year. Getting it wrong can cost you not only financially, but also in administrative disruption.

This article is provided for informational purposes only and does not constitute legal or tax advice. The information is current as of the date of publication (24 March 2026) and reflects the authors' understanding of the applicable legislation. For specific cases, we recommend consulting a qualified tax specialist or lawyer. Innovires Legal accepts no liability for actions taken solely on the basis of the content of this publication.