What you need to know about the liberal professions in Bulgaria

What is a “liberal profession”?

Everyone is free to choose their specialisation and their place of work. But while some people choose salaried employment, others do not wish to work fixed hours in one place for the benefit of a single employer. In that situation you can become a freelance professional.

The liberal professions are listed in the Personal Income Tax Act (ZDDFL), paragraph 1, item 29. They are:

• lawyers;
• notaries;
• certified accountants;
• auditors;
• lay judges;
• private enforcement agents;
• architects;
• figures in culture, science, the arts and education;
• experts at the prosecution service and the courts;
• translators;
• medical specialists;
• licensed valuers;
• technical managers;
• engineers;
• insurance agents.

Members of these professions must meet all of the following conditions at the same time:

• not being registered as sole traders;
• carrying out their professional activity at their own expense;
• meeting the definition of “self-employed persons” in the Social Insurance Code.

Legal entities therefore cannot engage in freelance practice, and all the expenses of members of the “liberal professions”, including social insurance contributions, are borne by them at their own expense.

How to register

To practise freelance you must register in BULSTAT at the Registry Agency. No more than 7 days may pass between the start of the activity and registration. The following documents are required for registration:

• an application for registration of a freelance professional;
• documents confirming the necessary qualifications (diploma, certificates, etc.);
• a declaration of the accuracy of the data;
• an identity card;
• a receipt for payment of the state fee of 10 leva.

After registration, the freelance professional receives an EIK number (unified identification code), which coincides with their EGN.

The next stage is registration with the tax authorities. Within 7 days of the start of the activity and after receiving the EIK, you must file a declaration of registration as a self-employed person with the National Revenue Agency (NAP). This can be done by visiting an office in person, or online using a personal identification code.

After that, you must file a declaration with NAP and pay social insurance contributions (pension and health insurance contributions) each month by the 25th. At the end of the tax year, the social insurance contributions are equalised on the basis of its results.

If the activity is subject to patent tax, then before starting work you must also file a patent declaration with the municipality at the location of the place of work or at your permanent address, on the basis of Article 61 of the Local Taxes and Fees Act.

Taxation of self-employed persons

Taxation depends on the type of activity. If it is subject to patent tax, you must pay the patent tax. Before starting work and every year by 31 January, you must file the relevant declaration.

If the activity is not subject to patent tax, members of the liberal professions are taxed in accordance with the ZDDFL, i.e. as individuals.

Self-employed persons are subject to the VAT Act (value added tax). VAT registration is required upon reaching a taxable turnover of 50 thousand leva over 12 consecutive months.

Who can become self-employed?

Freelance practice is an attractive option, but it is not available to everyone. First of all, this option suits holders of an EGN, i.e. Bulgarian citizens and foreigners who have obtained a permanent residence permit or EU long-term resident status. As for everyone else, most likely only those who have the right to work in Bulgaria will be able to register as self-employed – spouses of Bulgarian citizens and of foreigners with a permanent residence permit, as well as EU citizens.

Other foreigners can set up a legal entity and provide services on its behalf. This option is suitable for everyone, even without a residence permit.

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