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- From 1 April 2025, the mandatory VAT registration threshold was reduced from BGN 166,000 to BGN 100,000 of turnover over the previous 12 months.
- The application for registration is filed by the end of the month following the month in which the threshold is reached.
- Registration brings monthly reporting, but also the right to deduct input VAT on purchases.
- Monitor your turnover throughout the year so that you do not miss the deadline and incur penalties from the National Revenue Agency.
On 1 April 2025, Bulgaria introduced a significant change affecting many small and medium-sized enterprises: the mandatory VAT registration threshold was reduced from BGN 166,000 to BGN 100,000. The measure reflects the country's commitments to bring its tax system into line with EU standards and aims to increase transparency and budget revenue.
What Does This Mean in Practice?
Under the new threshold, any business whose turnover reaches or exceeds BGN 100,000 over the previous 12 months must apply for VAT registration by the end of the month following the month in which the threshold was exceeded.
For many businesses, this means additional administration and accounting costs for preparing and filing monthly VAT returns. On the other hand, registration also brings benefits, such as the right to deduct the VAT charged on purchases and investments.
Who Will Be Most Affected?
The businesses most affected will be the small and medium-sized enterprises that have so far operated below the previous threshold. The change may be felt most by start-ups, freelancers and e-commerce businesses.
These businesses should take timely steps to adapt to the new rules, such as:
- Reviewing their accounting systems.
- Preparing for regular reporting to the National Revenue Agency.
- Planning future expenditure and investment in light of the new tax rules.
The Benefits of VAT Registration
Despite the additional red tape, VAT registration can also offer significant advantages:
- The ability to recover or deduct the VAT charged on goods and services purchased.
- A better image with partners and counterparties: many companies prefer to work with VAT-registered partners because of the easier accounting and greater transparency.
- The opportunity to take part in public procurement and larger transactions.
What Next?
To avoid penalties from the National Revenue Agency, it is essential to file the registration documents on time. If you are close to the new threshold, it is advisable to consult an accountant or tax adviser now.
Businesses should also monitor their turnover carefully throughout the year so as not to miss the point at which they must register.
The lower VAT registration threshold is an important change in Bulgarian law that will affect a significant number of companies and entrepreneurs. Preparing for it is key to minimising the negative consequences and making the most of the opportunities that VAT registration offers.
With good information and planning, any challenge can become an opportunity for your business to grow. For assistance with VAT registration or restructuring your business, our commercial law team is here to help.
Frequently asked questions
When do I have to register for VAT?
When your taxable turnover over the previous 12 months reaches the threshold of BGN 100,000. The application is filed by the end of the month following the month in which the threshold was exceeded.
What are the benefits of VAT registration?
The right to deduct the VAT charged on purchases and investments, easier dealings with VAT-registered partners, and the opportunity to take part in public procurement and larger transactions.
Who is most affected by the lower threshold?
Small and medium-sized enterprises, start-ups, freelancers and e-commerce businesses with a turnover of between BGN 100,000 and BGN 166,000: between 1 January and 31 March 2025 the threshold was BGN 166,000, and from 1 April 2025 it returned to BGN 100,000.
What is the VAT registration threshold in 2026?
EUR 51,130 of taxable turnover for the current calendar year. The application must be filed within seven days of exceeding the threshold.
