Bulgaria VAT changes 2026: €51,130 threshold explained

The Act Amending the Value Added Tax Act (ЗИД на ЗДДС, State Gazette (ДВ) issue 115 of 30 December 2025) is the most extensive change to the Value Added Tax Act (ЗДДС) since it was adopted. With the transposition of Council Directive (EU) 2020/285, entirely new schemes for small enterprises are introduced, along with a new registration threshold in euro and a fundamentally different logic for determining taxable turnover. For legal advisers who counsel clients on VAT questions, not knowing these changes can lead to missed registration deadlines and serious penalties.

This analysis covers the European context (Directive 2020/285), the new threshold of €51,130, the annual turnover under Art. 168в, the two small enterprise schemes (national and EU), the changes for tour operators and dealers, and provides a practical checklist for legal advisers.

Directive (EU) 2020/285: the European context

The changes to the ЗДДС are not an isolated national decision but the mandatory transposition of Council Directive (EU) 2020/285 of 18 February 2020, which reforms the special scheme for small enterprises in Directive 2006/112/EC (the VAT Directive). The deadline for transposition was 31 December 2024, with application from 1 January 2025, but Bulgaria, like a number of other member states, transposed it a year late.

The Directive pursues two main goals. First, reducing the administrative burden on small enterprises, which generate minimal VAT revenue but bear disproportionately high compliance costs. Second, introducing a cross-border exemption: for the first time a small enterprise from one member state can benefit from an exemption in another, if it meets certain conditions.

It should be noted that Directive 2020/285 sets the maximum permitted national threshold at €85,000 (new Art. 284, paragraph 1 of Directive 2006/112/EC). Bulgaria has chosen a threshold of €51,130 (BGN 100,000 at the fixed exchange rate), which is well below this maximum. For the cross-border exemption an additional ceiling of €100,000 of total annual turnover in the EU has been introduced.

New registration threshold: €51,130

The central change in the ЗДДС is the rewording of Art. 96(1), the rule that determines when the obligation to register arises. The old regime (BGN 100,000 over a period of the last 12 consecutive months) has been replaced by an entirely new mechanism.

Annual turnover under Art. 168в: what is included and what is not

The new Art. 168в ЗДДС introduces the concept of “annual turnover” („годишен оборот“), which replaces the previous “taxable turnover” when determining the obligation to register. The difference is not only terminological: the scope of the supplies included has been significantly widened.

The critical change is the inclusion of exempt supplies of real estate (item 5). Under the old regime, exempt supplies of property (for example the sale of an “old” residential property under Art. 45 ЗДДС) were not included in the taxable turnover. They are now part of the annual turnover, which means that a one-off sale of a property can lead to the threshold being exceeded and an obligation to register.

Art. 168в(2), item 2 excludes from the annual turnover supplies of long-term assets used by the person in their activity. This is a deliberate safeguard against situations in which an enterprise sells production equipment or a company car and is forced to register because of the one-off transaction.

The Small Enterprises Scheme in Bulgaria (Art. 168д)

The new Chapter Nineteen “a” of the ЗДДС introduces the Small Enterprises Scheme (РМП), which is conceptually different from the previous “non-registration”. Instead of simply not charging VAT because it is not registered, the person applies a special scheme with defined obligations and restrictions.

Attention should be paid to three scenarios in which the scheme ends: (1) mandatory registration when the threshold is exceeded; (2) voluntary registration at the person’s choice; (3) moving to the Small Enterprises Scheme in the EU. On ending under item 1, registration takes effect from the day after the threshold is exceeded, and the person must charge VAT from that date.

The Small Enterprises Scheme in the EU (Art. 168е-168к)

This is the genuinely new element introduced by Directive 2020/285: a cross-border VAT exemption. For the first time a Bulgarian enterprise can benefit from an exemption in another member state without being established there, if it meets three cumulative conditions.

When applying the scheme the person receives an identification number with the suffix “-EX” (for example BG123456789-EX), has an obligation to report quarterly through an electronic portal (Art. 168н ЗДДС) and cannot combine the scheme with the OSS (One Stop Shop) or the import scheme under Art. 168б.

Specific schemes: tour operators, dealers and investment gold

A change that stayed outside the focus of most publications but has significant practical impact: when determining the annual turnover for the purposes of the threshold, persons applying special schemes (Art. 142а for tour operators, Art. 149 for dealers in second-hand goods, Art. 162а for investment gold) now include the full amount received, not just the margin.

This is critical information for legal advisers whose clients work in the tourism sector, trade in works of art or deal in investment gold. Many of them may not realise that they have already become liable to register when the act came into force.

Old and new: comparison of the schemes

Practical advice for legal advisers

The changes to the ЗДДС call for a proactive approach to VAT advice. The following checklist covers the key steps when reviewing a client’s VAT exposure.

For more information on applying the changes, see the full text of the ЗДДС on lex.bg, the text of the ЗИД на ЗДДС (State Gazette (ДВ) issue 115/2025) and Directive (EU) 2020/285. See also our guide to the 2026 tax return for the related changes affecting individuals.