New small enterprise regime under the Bulgarian VAT Act from 2026

What businesses need to know

From 1 January 2026, substantial amendments to the Закон за данък върху добавената стойност (the Bulgarian VAT Act) concerning the regime for small enterprises come into force. The amendments relate both to the introduction of the euro in Bulgaria and to the harmonisation of European rules within the EU.

This is not merely a change of thresholds — it is a new concept of taxation for small businesses, including cross-border activity.

New threshold for mandatory VAT registration

From 01.01.2026:

• The national threshold for mandatory registration is 51 130 euro
• The threshold is assessed for both the current and the previous calendar year

Exceeding this threshold triggers the obligation to register under the general procedure.

Two regimes for small enterprises

The amendments introduce a clear distinction between:

1. The regime for small enterprises in Bulgaria

This is an exemption regime.

It may be applied if:

• Turnover in Bulgaria does not exceed 51 130 euro
• The company has no grounds for mandatory registration
• The company is not VAT-registered at the time the regime is applied

⚠ Important: if the enterprise is already VAT-registered (whether on a mandatory or a voluntary basis), this regime cannot be applied. In such a case, the deregistration procedure must first be completed, provided there are lawful grounds for it.

No special registration is required to apply the regime in Bulgaria — it applies automatically in the absence of VAT registration.

Advantages:

• Less administrative burden
• No obligation to file monthly VAT returns

Limitations:

• No right to a tax credit
• Once the threshold is exceeded, registration becomes mandatory

2. The regime for small enterprises in the EU

This is a new European regime.

It allows small enterprises not to charge VAT in other EU member states as well, if:

• Total turnover in the EU does not exceed 100 000 euro
• The national thresholds of the relevant countries are observed
• A special application has been filed
• At the time the application is filed, the company is not VAT-registered under the general procedure

Once approved, a special identification number ending in “–EX” is issued.

This regime considerably simplifies the cross-border activity of small companies, but it requires a prior analysis of all the conditions.

What does this mean for online trade?

The new regime is particularly relevant for:

• online shops
• digital services
• companies with clients in the EU

However, the following must be taken into account:

• The location of the goods remains a key factor in determining the VAT treatment
• Imports from third countries give rise to customs obligations
• The exemption does not remove other tax and reporting requirements

A strategic choice for the business

From 2026, every small company should assess:

• Is it advantageous to remain outside the VAT system?
• Are there significant expenses carrying a right to a tax credit?
• Is turnover expected to grow?
• Does turnover in the EU exceed EUR 100,000?

It is important to understand that the small enterprise regime cannot be applied at the same time as VAT registration. It is an alternative to registration, not an additional regime.

Conclusion

The changes to VAT legislation from 2026 create new opportunities for small businesses, but they require careful planning.

The choice between VAT registration and the small enterprise regime should be based on an analysis of turnover, the business model and development plans.

Before filing the documents, it is important to confirm that there is no active VAT registration and to check compliance with the established thresholds, in order to avoid errors and possible penalties.

For more detailed information and to complete the procedure for applying the small enterprise regime correctly, the specialists of Bulgarian Expert are ready to provide you with professional support.