I. Special Schemes for Small Enterprises

With the amendments to the Value Added Tax Act (VAT Act), the provisions of the small enterprises scheme are introduced in accordance with Directive (EU) 2020/285.

With the introduction of this scheme, small enterprises may supply goods and services in another member state up to a certain threshold without charging VAT.

Previous regime
Until now, the VAT exemption for small enterprises was subject to the national rules of each Member State, which required VAT registration in every EU country where taxable supplies were carried out.

II. Structure of the Small Enterprises Scheme

The scheme has a two-tier structure:

1. Domestic small enterprises scheme
   The small enterprise applies VAT exemption only in Bulgaria.

2. EU small enterprises scheme
   The small enterprise may apply for VAT exemption in one, several, or all other Member States in which it operates.

It is possible not to apply the scheme domestically but to apply it in other Member States.

III. Exceptions from the Application of the Schemes

The special schemes for small enterprises do not apply when:

• Taxable persons are registered for distance sales of goods imported from third countries or territories
  (Art. 168g(4) of the VAT Act)

• A taxable person may not simultaneously apply, in the same Member State:

  • the special schemes for small enterprises, and

  • the Union special scheme under Chapter Eighteen
    (Art. 168g(4) of the VAT Act)

• The special schemes do not apply domestically to supplies of:

  • a new means of transport dispatched or transported from the territory of the country to another Member State
    (Art. 168g(2) of the VAT Act)

IV. Turnover Thresholds

1. National threshold

• EUR 51,130
  (Art. 96(1) of the VAT Act)

2. Union threshold

• EUR 100,000
  (Art. 96(2), item 2 of the VAT Act)

This is an annual aggregate threshold applicable to all 27 EU member states.

V. Determination of Turnover

1. Annual domestic turnover
   The total amount of the taxable bases of supplies with place of supply in Bulgaria for the calendar year, determined under Art. 168v(1)–(10) of the VAT Act.

2. Annual Union turnover
   The total value of supplies in all Member States, including:

• turnover in Bulgaria, and

• supplies with place of supply in other Member States
  (Art. 168v(11) of the VAT Act)

VI. IMPORTANT: Change in the Method of Determining Turnover for Registration

As of 01 January 2026:

• Turnover is monitored on a daily basis for the current calendar year.

• The rule for:

  • the preceding 12 consecutive months, or

  • two consecutive months is abolished.

Registration obligation:

• Upon exceeding EUR 51,130

• An application must be submitted within 7 days

• The registration date is the day following the date on which the threshold is exceeded

Special rule for 2025
If the annual turnover for 2025 exceeds the threshold of EUR 51,130:

• Registration date: 01 January 2026
  (§ 63 of the Transitional and Final Provisions of the Act Amending the VAT Act, SG No. 115/30.12.2025)

VII. Changes in the Scope of Turnover for Registration

Included:

• Exempt supplies of immovable property, unless they are ancillary
  (Art. 168v(1), item 5 of the VAT Act)

“Ancillary supply”
A supply that:

• is not related to the usual economic activity, and

• has a secondary or incidental character
  (§ 1, item 105 of the Supplementary Provisions of the VAT Act)

Special schemes (Chapters XVI, XVII, and XIX)
The full amount received is included in turnover, not the margin:

• tourist services

• second-hand goods

• works of art

• collectors’ items and antiques

• investment gold
  (Art. 168v(5) of the VAT Act, effective as of 01 January 2026)

VIII. IMPORTANT: Change in the Registration Date and Invoicing

• The registration date is no longer the date of service of the act.

• The date is the day following the exceeding of the threshold
  (Art. 103 of the VAT Act)

Invoicing in this case
An invoice is issued within 5 days from service of the act for supplies:

• with a tax event occurring between:

  • the day following the exceeding of the threshold, and

  • the date of service of the act
    (Art. 113(4) of the VAT Act)

IX. Application of the Domestic Small Enterprises Scheme

Persons established in Bulgaria with:

• annual turnover ≤ EUR 51,130

• for the current and the previous calendar year

➡️ Automatically apply the scheme, without notification to the National Revenue Agency (NRA).

X. Application of the EU Small Enterprises Scheme

Conditions:

• domestic turnover ≤ EUR 51,130 and/or

• EU turnover ≤ EUR 100,000

• for the current and the previous year

The scheme may be applied:

• by persons established in Bulgaria or another Member State

• only in Member States where national conditions are met

Persons may apply the EU scheme even if they are registered under Art. 96 or Art. 100 of the VAT Act
(Art. 168e(6))

XI. Registration for Application of the EU Scheme

• Registration is voluntary

• Application submitted to the NRA

• An identification number ending in “–EX” is issued

• The scheme applies after approval by the respective Member States

⚠️ Not all Member States apply the scheme.

Invoicing

• Mandatory indication of BG…–EX on invoices
  (Art. 114(13) and (14) of the VAT Act)

XII. Declaration of Turnover (EU Scheme)

• Submission of a quarterly report

• Electronically

• Includes:

  • domestic turnover

  • turnover by Member State

• Deadline: by the end of the month following the quarter

• Must be submitted even in the absence of supplies
  (Art. 168l of the VAT Act)

XIII. Questions and Answers (Excerpt)

Is there an obligation to register if the person supplies only domestically and does not exceed the threshold?
Answer: No.

Which turnover does a person from another Member State applying the scheme in Bulgaria monitor?
Answer:

• domestic turnover (EUR 51,130), or

• EU turnover (EUR 100,000)

Is there a right to deduct input VAT?
Answer: No.
(Art. 70(6) of the VAT Act)

Can a non-EU person with a permanent establishment in the EU apply the scheme?
Answer: No. Only persons established in the EU. In this respect, § 61 of the amending act introduces new items 11a and 12a in § 1 of the Supplementary Provisions of the VAT Act.

XIV. Useful External Resources

• Information on VAT rules for SMEs by EU Member State
  https://sme-vat-rules.ec.europa.eu/national-vat-rules_en

• Official EU portal for the VAT regime for small and medium-sized enterprises
  https://sme-vat-rules.ec.europa.eu/index_en

• Guide to the VAT regime for SMEs under EU legislation
  https://sme-vat-rules.ec.europa.eu/legislation/guides_en#guide-to-the-sme-scheme

XV. Other Amendments to the VAT Act

• Registration under Art. 97a(2) is abolished for services supplied in another Member State if the EU small enterprises scheme is applied for that Member State
  (Art. 97a(6) of the VAT Act).

• No change to registration under Art. 97a of the VAT Act.

• Change in the place of supply for virtual events
  (Art. 21(12) and (13) of the VAT Act).

• Repealed:

  • Art. 97 (supplies of goods with installation and assembly)

  • Art. 104 (registration certificates)

XVI. Other Legislative Amendments

I. New Ordinance No. H-3 of 07.11.2025

• Methods for determining market prices

• Effective as of 01 January 2026

II. In the Accounting Act, deadlines are postponed by one year for the preparation of sustainability reports
(§ 30 of the Transitional and Final Provisions to the Act Amending the Accounting Act)

Sustainability Report – SUMMARY TABLE

III. Corporate Income Tax Declaration for Multinational Groups with Revenue above EUR 750,000,000

First reporting period: 2025

• For a non-calendar year – a period beginning on or after 22.06.2024
  (§ 66 of the Transitional and Final Provisions to the Act Amending the VAT Act)