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From 1 January 2026, Bulgaria's VAT system undergoes major changes following euro adoption and the implementation of EU small business VAT rules. The VAT reform impacts thresholds, registration, cross-border sales, invoicing and compliance, positioning Bulgaria as an increasingly attractive base for small and medium-sized businesses operating across the European Union.
News
Small Enterprise VAT Regime
Companies with turnover up to €51,130 in Bulgaria and up to €100,000 across the EU can now operate VAT-free across all EU member states. This represents a significant shift from the previous domestic-only exemption. Businesses using this regime do not charge VAT, do not need to register in other EU states, and do not have to use the OSS system.
Foreign suppliers and installation rules
From 2026, EU-based suppliers who deliver goods that are assembled or installed in Bulgaria must register for Bulgarian VAT. The reverse-charge mechanism for such transactions no longer applies, aligning Bulgaria with broader EU practices.
Turnover and registration changes
VAT registration thresholds now consider a broader definition of turnover, including subsidies, packaging, transport, and other charges. All thresholds and reporting requirements will also be expressed in euros following Bulgaria's adoption of the euro.
Digital and EU-integrated compliance
The system will be integrated with EU databases for registration and verification, simplifying compliance and reducing the risk of fraud. Foreign suppliers exceeding thresholds must register in Bulgaria, ensuring consistent VAT treatment.
What this means for businesses
The 2026 VAT changes position Bulgaria as one of the more competitive and business-friendly EU jurisdictions for small enterprises, freelancers, service providers and exporters. Whilst VAT is not deductible under the small-enterprise regime, companies can benefit from simplified compliance and VAT-free cross-border sales within the EU.
Conclusion
The 2026 VAT reforms mark a major step in aligning Bulgaria with EU standards, simplifying compliance for small and medium-sized businesses, and enabling legal VAT-free cross-border operations. Companies now have clearer rules, broader definitions of turnover and a system recognised across Europe, making planning and growth more predictable.
Eurofast take
Eurofast is uniquely positioned to help your business navigate these changes and maximise the benefits of EU-wide VAT exemptions. Our services include VAT registration and compliance support across the EU, strategic guidance on cross-border expansion, and operational support to ensure your business remains fully compliant whilst accessing new markets efficiently.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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