🔹 Quick Answer: VAT Changes in Bulgaria 2026
From 1 January 2026, Bulgaria introduced significant changes to its VAT rules for small enterprises.
- The VAT registration threshold is EUR 51,130 per calendar year
- Turnover is monitored per calendar year, not on a rolling basis
- Two SME VAT exemption regimes apply:
- Small Enterprise Scheme – Bulgaria only
- Small Enterprise Scheme – EU (cross-border)
- Businesses exceeding the threshold must register for VAT within 7 days
- 2025 turnover still matters due to transitional rules
- Non-EU businesses have an effective nil VAT threshold
If your business is close to the threshold, operates across the EU, or had significant turnover in 2025, a VAT review is strongly recommended.
Introduction
As of 1 January 2026, Bulgaria introduced important structural changes to its VAT legislation. These changes affect how VAT thresholds are monitored, introduce new VAT exemption regimes for small enterprises, and modify registration obligations for businesses operating in Bulgaria and across the EU.
While Bulgaria already adjusted its VAT thresholds during 2025, the 2026 reform goes further, replacing rolling turnover logic with calendar-year monitoring and introducing EU-aligned SME VAT regimes. These VAT changes are part of a broader set of tax, labour, and social security updates introduced in 2026, which we summarise in our overview of
What Changed in Bulgaria in 2026 (Tax, VAT, Labour, Social Security).
1. Background: VAT threshold developments in 2025 (context)
During 2025, Bulgaria amended its VAT registration threshold as part of a broader transition toward the 2026 framework. While the threshold was briefly increased to 166,000 BGN in early 2025, it was later aligned again with 100,000 BGN (EUR 51,130) to support the move toward calendar-year monitoring and SME VAT regimes.
For a detailed explanation of the general VAT system and historical thresholds, see our overview of VAT in Bulgaria
2. Why VAT rules changed in 2026
From 1 January 2026, Bulgaria implemented Directive (EU) 2020/285, which updates the EU VAT framework for small enterprises.
The directive aims to reduce administrative burden, harmonise VAT treatment across EU Member States, and allow qualifying small businesses to benefit from VAT exemptions even when carrying out cross-border activities.
According to an official announcement by the National Revenue Agency (НАП), amendments to the VAT Act effective from 1 January 2026 introduce the small enterprise VAT regimes in Bulgaria and the EU.
The directive aims to:
- reduce administrative burden,
- harmonise VAT treatment across EU Member States,
- allow qualifying small businesses to benefit from VAT exemptions even when carrying out cross-border activities.
To comply with this directive, Bulgaria introduced two SME VAT regimes and replaced rolling turnover monitoring with calendar-year-based assessment.
3. Fundamental change: how turnover is monitored
Until 31 December 2025
VAT registration obligations were generally triggered by:
- rolling 12-month turnover, or
- short consecutive periods in cases of rapid turnover increases.
From 1 January 2026
Turnover relevant for VAT registration and SME regimes is monitored:
- per calendar year
- from 1 January to 31 December
- on a daily cumulative basis
This requires businesses to track turnover more closely throughout the year.
4. VAT registration threshold from 2026
From 1 January 2026, the VAT registration threshold in Bulgaria is:
EUR 51,130 (annual turnover in Bulgaria)
From 2026, the threshold is legally denominated in euro, which is why it is expressed as EUR 51,130 rather than in BGN.
Key points:
- once the threshold is exceeded:
- a VAT registration application must be filed within 7 days
- VAT registration becomes effective the day after the threshold is exceeded
- late registration may result in VAT liabilities, interest, and administrative penalties
5. New VAT exemption regimes for small enterprises
From 2026, Bulgaria applies two SME VAT regimes under the EU framework.
Both regimes are optional, meaning eligible businesses may choose to apply them or remain under the standard VAT regime, depending on their commercial and compliance considerations.
A. Small Enterprise Scheme – Bulgaria only
This regime applies if:
- annual turnover in Bulgaria is ≤ EUR 51,130
- both in the current and previous calendar year
Key features:
- VAT exemption applies only to supplies with place of supply in Bulgaria
- no VAT registration or notification is required
- businesses must still monitor turnover on an ongoing basis
When the conditions are met, this regime applies in practice without a formal application procedure.
B. Small Enterprise Scheme – EU (cross-border)
This regime applies if all of the following conditions are met:
- turnover in Bulgaria ≤ EUR 51,130
- total EU turnover ≤ EUR 100,000
- turnover in each EU Member State remains below the applicable national VAT threshold
Key features:
- VAT exemption may apply in Bulgaria and other eligible EU Member States
- prior application to the tax authorities is mandatory
- an identification number ending in “–EX” is issued
- invoices must clearly display the EX identification
Additional compliance obligation under the EU SME regime
Businesses established in Bulgaria that apply the Small Enterprise Scheme – EU must comply with an additional quarterly reporting obligation.
Specifically, taxable persons registered in Bulgaria for the application of the EU SME regime are required to submit a quarterly report to the National Revenue Agency (NRA) detailing their realized turnover:
- in Bulgaria, and
- separately for each EU Member State where supplies were made.
The report must be submitted electronically, by the end of the month following each calendar quarter, and must be filed even if no turnover was realized during the period.
All amounts must be reported in euro (EUR), using the ECB exchange rate applicable on the first day of the calendar year where transactions were carried out in other currencies.
Failure to submit these quarterly reports may lead to non-compliance consequences, including the risk of losing the right to apply the EU SME VAT exemption.
This regime is particularly relevant for service providers and digital businesses operating across multiple EU countries.
6. Transitional rule: why 2025 turnover still matters
A key transitional rule applies to businesses that were not VAT registered as of 01.01.2026.
If a business exceeded the applicable threshold during 2025, VAT registration may become mandatory from 01.01.2026, even if registration was not completed at the end of 2025.
Late or missed registration under these rules may result in retroactive VAT liabilities, interest, and administrative penalties. Any business close to or above the threshold in 2025 should review its turnover carefully to avoid unexpected exposure in 2026.
7. Non-EU businesses
Businesses established outside the EU cannot apply either SME VAT regime.
For non-EU businesses, the effective VAT registration threshold in Bulgaria is nil, meaning VAT registration is generally required before the first taxable supply, regardless of turnover. This applies even where a permanent establishment exists in Bulgaria.
8. What counts toward turnover (summary)
For VAT registration and SME regime purposes, turnover generally includes:
- taxable supplies of goods and services,
- intra-EU supplies,
- financial and insurance services,
- real-estate transactions (unless incidental),
- transfers of goods between EU Member States,
- supplies under special VAT regimes, calculated on gross value, not margin.
Frequently Asked Questions (FAQ)
Is the VAT threshold lower in 2026 than in 2025?
Not exactly. During 2025, the threshold was adjusted as part of a transition. From 2026, the threshold is EUR 51,130, applied under a calendar-year system and new SME VAT regimes.
Do I need to register for VAT immediately after exceeding the threshold?
Yes. Once the threshold is exceeded, you must apply for VAT registration within 7 days, and VAT applies from the day after the threshold is passed.
Do I need to notify the tax authorities to use the SME regime in Bulgaria?
No formal notification is required for the Bulgaria-only SME regime, provided all eligibility conditions are met and monitored.
What is an “EX” VAT number?
An EX VAT number identifies businesses using the EU SME VAT regime and must appear on invoices.
Does 2025 turnover still matter in 2026?
Yes. Transitional rules mean that 2025 turnover can still trigger VAT registration obligations in 2026.
Conclusion
The VAT changes introduced in Bulgaria from 2026 are structural, not cosmetic. They affect registration timing, VAT exemptions, and how turnover must be monitored. Early review and correct classification are essential to avoid compliance risks.
Disclaimer
This article provides general information on VAT rules in Bulgaria as of 1 January 2026 and does not constitute tax, legal, or accounting advice. VAT treatment depends on the specific facts of each case. Professional advice should be obtained before taking action.
Last reviewed and updated: February 2026
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