E-Commerce in Bulgaria: Pitfalls and Legal Nuances of Online Trade

Launching your own online shop or registering a seller account on European marketplaces (Amazon, Etsy, eMAG, eBay) through a Bulgarian legal entity (EOOD (single-member LLC), OOD (LLC), ЕДПК) often looks like a simple and quick start. However, e-commerce is one of the most strictly regulated business areas in Bulgaria and the European Union. In this article we examine in detail the key regulatory, tax and technical requirements you need to know about before launching your first advertising campaign.

Notification to the NAP under Ordinance N-18 (Appendix No. 33)

Every entrepreneur opening an electronic shop is obliged to notify the National Revenue Agency (NAP) before starting to accept orders.

When registration is mandatory: If you accept card payments (virtual POS terminal), payments through electronic wallets, or cash on delivery that is not processed as a postal money transfer.

Exception to the rule: If your shop accepts exclusively standard bank transfers to a current account, or cash on delivery is processed through a courier service with a Postal Money Transfer (Пощенски паричен превод — ППП, where the cashless receipt is issued to the buyer by Speedy/Econt).

Monthly reporting (audit file): When electronic cash receipts are issued automatically, the company is obliged to submit a standardised audit file with sales information to the tax authorities every month (by the 15th day of the following month).

Mandatory VAT registration BEFORE the first sale (Art. 97a ЗДДС)

The main misconception among new entrepreneurs is the belief that VAT does not concern them until the standard turnover threshold in Bulgaria (EUR 51,130) is reached. In e-commerce this is a critical mistake.

Attention: Mandatory VAT registration before launch!

Purchase of foreign services (Art. 97a ЗДДС): If a company uses paid software, hosting, Shopify/WooCommerce plugins, buys advertising on Facebook/Google/TikTok or pays commissions to marketplaces (Amazon, Etsy, eBay), it is purchasing services from foreign legal entities.

Strict deadline: You must submit an application for VAT registration under Art. 97a ЗДДС at least 7 days before receiving the first such service or transferring payment.

Consequences: An obligation arises to submit VAT returns monthly and to charge VAT under the reverse charge mechanism on the foreign services received.

Sales to private individuals in the EU and the OSS (One Stop Shop) system

When selling goods to private individuals (B2C) in other European Union countries, the obligation to comply with distance selling rules arises very quickly.

Low European limit: The combined limit for B2C sales of goods and electronic services to all other EU countries is only EUR 10,000 per year. Once this threshold is exceeded, you are not entitled to charge Bulgarian VAT.

Applying the buyer’s country rates: You are obliged to charge VAT at the rate of the country in which the buyer resides (for example, 19% for Germany, 21% for Spain, 22% for Italy).

The saving grace of the OSS regime: In order to avoid registering for VAT in every individual EU country where there are customers, a Bulgarian company registers in the OSS system (Union scheme). This makes it possible to submit a single general quarterly VAT return to the NAP in Bulgaria and pay the tax centrally.

Technical infrastructure: Hosting, Domain and Payment Systems

Choosing a domain zone

A .bg domain requires full identification of the legal entity and confirmation of rights to the name or trademark. Domains such as .com, .eu or .shop are registered faster, but if you are targeting the domestic Bulgarian market, a local .bg domain inspires the highest level of trust among buyers.

Hosting and security

The platform must provide high loading speed, fault tolerance, an SSL certificate and strict compliance with the GDPR (privacy policy, cookie management, storage of personal data).

Payment gateways and acquiring processing

The platforms Stripe, myPOS, Paysera, Borica and Revolut Business are used to accept online payments. The accounting nuance is that payment systems withhold their commission before transferring funds to your account. The accountant must record the full (gross) value of the sale and write off the operator’s commissions as service expenses on the basis of the financial statements.

Selling through marketplaces (Amazon, Etsy, eMAG, eBay)

Using third-party trading platforms does not relieve the company of its tax and accounting responsibilities:

• Your company remains the seller in relation to the buyer (you are obliged to issue documents and record every sale).
  • Marketplace commissions require VAT to be charged under a protocol pursuant to Art. 117 ЗДДС (within the framework of registration under Art. 97a or general VAT registration).
  • When storing goods in FBA/FBF warehouses in other EU countries (for example, Amazon warehouses in Poland or Germany), an obligation arises for immediate local VAT registration in those countries.

Conclusion and takeaways

Opening an online business through a Bulgarian legal entity offers excellent prospects and direct access to the EU market. However, behind the apparent simplicity lies a complex tax and administrative system.

To avoid serious fines from the National Revenue Agency (NAP) (which for violations of Наредба Н-18 and ЗДДС can run into thousands of euros), the legal structure, accounting and payment processing must be fully set up before the first sale.