Freelancing in Bulgaria 2026 — Complete Tax & Legal Guide

2026-04-27

Freelancing in Bulgaria 2026 — sole trader vs EOOD, 10% tax, social security, VAT threshold 100,000 BGN, invoicing rules. Expat guide by Fakturka.bg.

Freelancing in Bulgaria 2026 — Complete Tax & Legal Guide

💶 All amounts shown in BGN first, then EUR (Bulgaria adopted the EUR on 1 January 2026 at fixed rate 1 EUR = 1.95583 BGN). The dual display is mandatory until 8 August 2026.

TL;DR (quick read):

• Two main legal structures for freelancers: ET (Sole Trader) and EOOD (single-member LLC).
• Sole trader pays 15% flat personal income tax; EOOD pays 10% corporate tax + 5% dividend withholding.
• Mandatory social security contributions: roughly 32.3% of insurance income for the self-employed.
• VAT registration is mandatory above 100,000 BGN (51,129 EUR) turnover over 12 consecutive months — ZDDS Art. 96 (VAT Act).
• Every invoice must follow the 14 mandatory fields under ZDDS Art. 114.
• Fakturka.bg issues compliant Bulgarian invoices in English and Bulgarian — 15 invoices/month free forever.

Table of contents

1. Why Bulgaria is attractive for freelancers
2. Legal structures: ET vs EOOD vs Civil contracts
3. Personal income tax — 15% for sole traders
4. Corporate tax — 10% flat for EOOD
5. Social security and health insurance
6. VAT registration thresholds and obligations
7. Invoicing requirements you cannot skip
8. Bookkeeping, declarations and deadlines
9. How Fakturka.bg helps freelancers in Bulgaria
10. Frequently asked questions (FAQ)
11. Sources and further reading

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Why Bulgaria is attractive for freelancers

Bulgaria has quietly become one of the most popular EU jurisdictions for digital nomads, software engineers, designers and consultants. The combination of low flat taxes, EU membership, affordable cost of living, and a growing English-speaking professional community in Sofia, Plovdiv and Varna makes it a compelling base.

For an EU citizen, registration as a freelancer takes a few business days. For non-EU citizens, a residence permit on the basis of self-employment or company ownership is required, but the path is well established.

First-hand note from our team: We see thousands of freelancers each month onboard onto Fakturka.bg, with about 30% of new sign-ups coming from non-Bulgarian-speaking founders who use the English UI.

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Legal structures: ET vs EOOD vs Civil contracts

Bulgarian law gives freelancers three practical options.

1. ET — Sole Trader (Едноличен Търговец)

A registered sole trader is a natural person carrying on commercial activity in their own name. The trader and the business are legally the same entity — meaning unlimited personal liability for business debts.

• Setup cost: ~30 BGN (15.34 EUR) state fee + ~50-100 BGN (25.57-51.13 EUR) for an accountant if you use one.
• Tax: 15% flat on net taxable profit (revenue – allowable expenses – social security).
• Social security: mandatory, calculated on declared insurance income (min. 933 BGN / 477 EUR per month in 2026).
• Best for: consultants, designers and contractors with predictable revenue and low liability risk.

2. EOOD — Single-Member LLC (Еднолично Дружество с Ограничена Отговорност)

A single-shareholder limited liability company. The owner's liability is limited to the share capital.

• Setup cost: ~200-300 BGN (102-153 EUR) court and notary fees, plus optional accountant fees.
• Minimum share capital: 2 BGN (about 1 EUR — symbolic).
• Tax: 10% corporate income tax + 5% withholding when you take dividends.
• Best for: software companies, agencies, freelancers with employees, anyone needing limited liability or planning to scale.

See our dedicated guide: How to Set Up an EOOD in 2026.

3. Civil contract (Граждански договор)

For one-off work without a registered business. The payer typically withholds 10% personal tax and 27.8% social security at source. Practical only for small, occasional gigs — not a long-term solution for a serious freelance career.

Quick comparison

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Personal income tax — 15% for sole traders

Under the Personal Income Tax Act (ZDDFL — Закон за данъците върху доходите на физическите лица), registered sole traders pay a 15% flat tax on profit from commercial activity.

The taxable base

Taxable base = gross revenue – deductible business expenses – mandatory social security contributions.

Annual declaration

• Filing form: Annual tax return under ZDDFL Art. 50.
• Deadline: 31 March of the following year (e.g. 2026 income → due 31 March 2027).
• Submission: Electronically via the NRA portal using a Qualified Electronic Signature (KEP) or PIN code.
• Discount: A 5% discount applies if you file and pay by 31 March (capped at 500 BGN / 256 EUR).

Allowable expenses

Standard categories include rent for a home office, software subscriptions, professional services, equipment depreciation, business travel, and accountant fees. Keep every receipt — Fakturka.bg's mobile expense scanner extracts data from photos automatically.

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Corporate tax — 10% flat for EOOD

If you run an EOOD, your company pays 10% corporate income tax under the Corporate Income Tax Act (ZKPO — Закон за корпоративното подоходно облагане) — one of the lowest rates in the EU.

When you withdraw profit as a dividend, an additional 5% dividend withholding applies for resident shareholders. Non-resident shareholders may benefit from lower rates under double-tax treaties.

For full coverage see our Corporate Tax in Bulgaria 2026 — ZKPO Guide.

Salary vs dividend optimisation

A common pattern for EOOD owners: pay yourself a small monthly salary (covering social security on a reasonable insurance income), then take the rest as dividends. This balances cash flow, future pension entitlement and tax efficiency. Always run the numbers with a Bulgarian accountant — the optimal split depends on your total income.

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Social security and health insurance

This is the area most newcomers underestimate. Bulgarian social security applies to all economically active persons — including foreign freelancers tax-resident in Bulgaria.

Self-employed contribution rates (2026)

• Pension fund: 14.8% (or 19.8% if born after 1959 and choosing universal pension fund).
• General sickness and maternity (optional for self-employed): 3.5%.
• Health insurance: 8%.
• Total: approximately 27.8% – 32.3% of declared insurance income.

Insurance income range

You declare your monthly insurance income between the legal floor and ceiling:

• Minimum: 933 BGN (477 EUR) per month in 2026.
• Maximum: 4,130 BGN (2,112 EUR) per month in 2026.

Most freelancers declare the minimum to keep contributions affordable, then reconcile annually if their actual income is higher. Contributions on the minimum work out to roughly 260-300 BGN (133-153 EUR) per month.

Payment deadline

Monthly social security contributions must be paid by the 25th of the following month. Filings go through the NRA portal.

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VAT registration thresholds and obligations

The Value Added Tax Act (ZDDS — Закон за данък върху добавената стойност) governs VAT in Bulgaria.

Mandatory VAT registration

You must register for VAT under ZDDS Art. 96 when your taxable turnover exceeds 100,000 BGN (51,129 EUR) over 12 consecutive months (rolling). The application is due within 7 days of crossing the threshold; registration takes effect on the 14th of the following month.

Voluntary VAT registration

You can register voluntarily at any time, regardless of turnover. This often pays off if your customers are VAT-registered businesses (they reclaim the input VAT) or if you accumulate significant business expenses with input VAT you would like to deduct.

VAT rates

• 20% — standard rate (most goods and services).
• 9% — reduced rate, hotels and tourism only (permanent reduced rate per ZDDS Art. 66 §2).
• 0% — exports outside the EU, intra-Community supplies to VAT-registered EU buyers, international transport.

Filing duties for VAT-registered freelancers

• Monthly VAT return by the 14th of the following month.
• Monthly VIES declaration by the 14th if you have intra-EU sales.
• Maintain a purchase ledger and a sales ledger.
• Pay VAT by the 14th, together with the return.

For a deeper dive see our Complete Guide to Invoicing in Bulgaria 2026.

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Invoicing requirements you cannot skip

Bulgarian invoices must contain 14 mandatory fields under ZDDS Art. 114. Missing any of them turns the invoice into a defective tax document — and the recipient loses the right to deduct input VAT.

The 14 mandatory fields (summary)

1. Document name ("invoice", "credit note" or "debit note").
2. Sequential 10-digit number, no gaps.
3. Issue date (within 5 days of the chargeable event under ZDDS Art. 113 §4).
4. Date of the chargeable event, if different from issue date.
5. Supplier name and registered address.
6. Supplier UIC / personal ID.
7. Supplier VAT identification number (if registered).
8. Recipient name and address.
9. Recipient UIC / personal ID.
10. Recipient VAT number (if registered).
11. Description, unit of measure and quantity of goods or services.
12. Unit price excluding VAT.
13. Taxable amount and applicable VAT rate.
14. VAT amount and total amount due.

Special markings

• "Supplier is not VAT-registered" — if you are not yet VAT-registered.
• "Reverse charge" with a reference to ZDDS Art. 82 — for B2B services within the EU.
• "ICS per ZDDS Art. 7" — for intra-Community supplies of goods.
• "Export per ZDDS Art. 28" — for sales outside the EU.

Penalties for invoice errors

Under ZDDS Art. 180 §1:

• Individuals: 250 to 1,000 BGN (128 to 511 EUR).
• Legal entities: 500 to 5,000 BGN (256 to 2,556 EUR).
• Repeat offences: doubled.

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Bookkeeping, declarations and deadlines

Annual deadlines at a glance

Document retention

Per Art. 12 of the Accounting Act (ZSch):

• Primary documents (invoices, receipts): 5 years.
• Accounting registers and annual financial statements: 10 years.
• Payroll records: 50 years.

Electronic archiving is fully equivalent to paper if it preserves authenticity, integrity and readability throughout the period.

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How Fakturka.bg helps freelancers in Bulgaria

Fakturka.bg is a Bulgarian SaaS platform purpose-built for the local tax environment. For English-speaking freelancers it removes the language barrier without removing legal compliance.

Features that matter for freelancers

• English UI alongside the Bulgarian original — you keep working in the language you understand.
• Auto-fill by UIC — enter only the customer's UIC and the system pulls registered name, address and VAT number from the Commercial Register.
• Built-in VIES validation — validate any EU VAT number in real time.
• Mobile expense scanner — photograph a receipt, AI extracts the data and creates the bookkeeping entry.
• Multi-currency invoicing — issue in EUR, USD, GBP with automatic Bulgarian National Bank exchange rates.
• PEPPOL e-invoicing — send compliant invoices to public authorities and EU partners.
• Free plan: 15 invoices/month forever, no credit card required.

Paid tiers (Pro 7.50 EUR / 14.67 BGN per month, Business 15 EUR / 29.34 BGN per month) unlock unlimited invoices and additional integrations.

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Frequently asked questions (FAQ)

Do I need to be a Bulgarian citizen to freelance in Bulgaria?

No. EU/EEA citizens can freely register as freelancers. Non-EU citizens need a residence permit — typically obtained on the basis of self-employment or by registering an EOOD.

Can I freelance in Bulgaria while remaining tax resident elsewhere?

In most cases no. If you spend more than 183 days per year in Bulgaria or your "centre of vital interests" is here, you become a Bulgarian tax resident and must declare worldwide income locally. Always check the relevant double-tax treaty.

What is the cheapest legal structure to start with?

ET (Sole Trader) — registration costs around 30 BGN (15.34 EUR) and bookkeeping is single-entry. The trade-off is unlimited personal liability.

When do I have to register for VAT?

When your taxable turnover crosses 100,000 BGN (51,129 EUR) over any 12 consecutive months. Voluntary registration is also possible at any turnover.

Can I issue invoices in English?

Yes. Bulgarian law does not require the invoice to be in Bulgarian. However, all 14 mandatory fields under ZDDS Art. 114 must be present, and the document must be archived per Art. 12 of the Accounting Act.

How much social security do I really pay each month?

On the minimum insurance income (933 BGN / 477 EUR), expect roughly 260-300 BGN (133-153 EUR) per month in combined contributions. Higher declared insurance income raises both the contribution and your future pension and sickness benefits.

Do I need a Bulgarian accountant?

For ET with simple turnover, a digital tool like Fakturka.bg combined with an annual consultation may be enough. For EOOD, an accountant is practically mandatory because of double-entry bookkeeping and the annual financial statement filing.

What happens if I miss a deadline?

NRA penalties for late VAT returns range from 500 to 10,000 BGN (256 to 5,113 EUR). Late personal income tax returns attract penalties from 500 BGN (256 EUR) upward. Set automated reminders or use Fakturka.bg's built-in tax calendar.

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Sources and further reading

• VAT Act (ZDDS) — lex.bg
• Personal Income Tax Act (ZDDFL) — lex.bg
• Corporate Income Tax Act (ZKPO) — lex.bg
• Accounting Act (ZSch) — lex.bg
• National Revenue Agency (NRA) — official portal

Related articles

• How to Set Up an EOOD in 2026
• Bulgarian Tax Calendar 2026
• Corporate Tax in Bulgaria 2026 — ZKPO Guide
• Complete Guide to Invoicing in Bulgaria 2026

Last updated: 2026-04-27 Author: The Fakturka.bg team Legal review: Certified accountant, member of the Institute of Certified Public Accountants of Bulgaria