VAT in Bulgaria (2026) – Key Rules and Changes

Value Added Tax (VAT) is an indirect tax applied to the supply of goods and services in Bulgaria. It is a major source of government revenue and is regulated by the Value Added Tax Act.

Tax Rates

In Bulgaria, the following VAT rates apply:

Standard rate – 20% (for most goods and services)
Reduced rates (e.g. for tourism and specific services) apply in certain cases as defined by law.

VAT Registration (Key Change for 2026)

As of January 1, 2026, important changes have been introduced:

The mandatory registration threshold is €51,130 annual turnover
Turnover is now calculated based on the calendar year (January 1 – December 31) instead of the previous rolling 12-month period
Once the threshold is reached, businesses must register within 7 days

This change requires more precise real-time turnover tracking.

New Schemes for Small Enterprises

From 2026, two new schemes are introduced:

Domestic Small Enterprise Scheme (Bulgaria)
- For businesses with turnover below €51,130
- No VAT is charged on domestic supplies
EU Small Enterprise Scheme
- Allows VAT exemption in other EU countries
- Applies if total EU turnover is below €100,000

The goal is to reduce administrative burden and support small businesses.

How VAT Works in Practice

VAT-registered businesses charge VAT on their sales
They can deduct VAT paid on purchases (input tax credit)
The difference is paid to the state budget

Conclusion

In 2026, Bulgaria’s VAT system remains stable but introduces key updates:

a euro-based threshold,
a new method for calculating turnover,
and special schemes for small businesses.

These changes aim to improve EU alignment and simplify operations for entrepreneurs.