As of 1st of January 2026 Bulgaria introduced significant changes to its VAT legislative framework. The amendments of the Bulgarian VAT Act published in the State Gazette on 30th of December 2025 affect important business aspects such as mandatory registration threshold and changes in the place of supply for some services. New VAT regime for small enterprises (SME) and specific registration requirements for foreign entities have also been implemented in the local VAT legislative framework.
Special regime for Small Enterprises
The new regime allows EU small enterprises not to charge VAT for supplies performed in Bulgaria and / or in other member states. Eligible persons are small enterprises with total annual turnover not exceeding EUR 100,000 for all Member States in the current and in the previous calendar year. In parallel, the national VAT registration threshold that may vary in different EU countries shall also not be exceeded both for current and previous calendar year.
The scheme is optional and cannot be combined with other special regimes such as OSS and distant sale of goods imported from third countries. The choice could be exercised by the eligible person via submission of an application in front of the National Revenue agency. The application shall be submitted electronically in accordance with the local legislative requirements.
Registration threshold and annual turnover
Following the adoption of the euro in Bulgaria (effective as of 1st of January 2026) the national threshold for mandatory VAT registration has been changed from BGN 100,000 to EUR 51,130.
Amendments in the turnover calculation have also been implemented. Until the end of December 2025, the turnover has been calculated based on the 12 months preceding the month of the registration. At present the registration obligation occurs if the taxable turnover (on a daily cumulative basis) exceeds the statutory threshold for the current or for the previous calendar year.
The application for registration shall be submitted in the competent territorial directorate of the National Revenue Agency within 7 days after exceeding the threshold (rather than the 7th day of the following month, that was the main rule applicable till the end of 2025). This requires strict monitoring of the threshold on daily basis as skipping the statutory deadline may result in VAT liabilities, default interest, and administrative penalties imposture.
Based on the new VAT legislative framework, the date of receiving the VAT registration act is not considered anymore as effective date of the VAT registration. The effective registration date may vary but for local entities and foreign entities that apply the special regime for small enterprises this is the date following the date of local and / or EU threshold excess.
Registration specifics for foreign taxable persons
Under the new amendments the non-EU and EU taxpayers performing taxable supplies at the territory of Bulgaria are generally obliged to register under local VAT Act before the date on which the tax for the first taxable supply becomes due. Exceptions from this rule cover cases of some specific regimes (such as OSS) and reverse charge where applicable.
The application for registration shall be submitted at least 7 days before the first taxable supply VAT becomes due (regardless of the turnover).
One of the most significant challenges for non-EU entities is the implementation of mandatory requirement for local accredited representative for registration purposes. As the accredited representative is jointly and unlimitedly liable for the VAT obligations of the non-EU entity this requirement may practically block the registration process. In similar cases establishment of a local branch may be considered as branches of foreign entities in Bulgaria are not affected by this limitation.
VAT treatment of supplies of goods with installation
As of 1st of January 2026 the VAT reverse charge mechanism for supply of goods with installation by EU vendors at the territory of the country has been revoked. The new regulation triggers mandatory VAT registration requirement for such EU vendors that shall charge 20% VAT to its counterparty for invoicing purposes.
Considering that the application for VAT registration shall be submitted at least 7 days before the first taxable supply VAT becomes due it is recommendable the foreign vendors to be promptly notified about the new VAT treatment and the VAT registration requirement in this regard.
Amendments related to place of supply of virtual events
Under the local VATA in case of service for provision of access (via tickets or payment entry) to cultural, artistic, scientific, educational or similar events the place of the supply is considered to be where such event actually takes place.
The above regulation is still in force but an addition has entered into force as of 1st of January 2026. If the access service is provided virtually the place of the supply is in the country where the recipient is established (if such recipient is a taxable person). On the contrary, if the recipient is non-taxable person the place of the supply shall be determined based on
the place of permanent address or usual residence of the recipient.
In conclusion, considering the recent update of the Bulgarian VAT regulation taxpayers may face various challenges from VAT compliance perspective. The potential exposure of VAT liabilities, default interest and administrative penalties requires paying attention and having detailed knowledge of the relevant amendments.
