Bulgaria has introduced a new VAT small business scheme, effective 1 January 2026, allowing domestic and EU-based businesses with limited turnover to benefit from VAT exemptions. The changes also update digital service rules, investment relief, and reporting requirements to simplify compliance.
Bulgaria has implemented new rules to support small businesses and align with the European Union (EU) VAT law. The changes, effective 1 January 2026, are part of the Law on Amendments and Supplements to the Value Added Tax Act to the Bulgarian Value Added Tax (VAT) Act, published in the Official Gazette on 30 December 2025.
The law introduces a small business scheme for cross-border supplies and updates registration, reporting, and VAT relief procedures, making it easier for both domestic and EU-based small businesses to comply with VAT requirements.
Small business VAT regime
The new legislation implements EU Directive 2020/285, creating two main small business regimes:
- Domestic small business regime: For Bulgarian businesses with annual turnovers in Bulgaria up to EUR 51,130 in the current and preceding calendar year.
- EU small business regime: For businesses across the EU with total EU turnovers below EUR 100,000, while also meeting the national thresholds of each Member State.
Under this scheme, small businesses can be exempt from VAT registration if they stay below these thresholds.
Bulgarian businesses applying the EU small business regime must register with the National Revenue Agency and obtain a “BG-…-EX” identification number. They also need to submit quarterly turnover reports electronically.
EU businesses can apply for the Bulgarian small-business exemption in their home country, provided they meet both the EU-wide threshold and Bulgaria’s EUR 51,130 threshold.
Digital services and investment relief
The amendments also include updates to digital services. New place-of-supply rules now cover virtual access to events, live Internet broadcasts, and other online services, in line with EU Directive 2022/542.
For businesses involved in approved investment projects, VAT relief procedures have been updated in line with EU Regulation 2023/2831. The maximum individual de minimis aid per enterprise has been raised to EUR 300,000, and the special import VAT procedure remains available until 31 December 2030.
Businesses exceeding the thresholds must register within seven days, while those with annual turnovers below EUR 51,130 as of 1 January 2026 automatically qualify for the domestic small business VAT exemption. Existing registrants keep their VAT numbers but are reclassified under the new categories.
