Global Daily Tax News, Bulgaria Enacts Law Altering VAT Registration Rules, (Jan 2, 2026)

Bulgaria's National Revenue Agency has confirmed the belated entry into force, on December 30, 2025, of legislation transposing into domestic law EU Directive 2020/285 on changes relating to the VAT exemption for small businesses.

Bulgaria was one of four EU member states earlier challenged by the European Commission for failing to implement new EU VAT law provisions regarding the special scheme for small businesses by January 1, 2025.

Under the small business exemption scheme, provisions in the EU VAT Directive entitle member states to provide that supplies may be made free from value-added tax by a small business providing its annual turnover does not exceed a given threshold, with these thresholds currently varying between member states.

As well as not being required to charge value-added tax on their supplies, small businesses may be exempted from certain or all VAT obligations relating to identification, invoicing, accounting, or returns. A major drawback of the exemption, however, is that, almost always, businesses may not claim back any value-added tax on their inputs.

Under the new rules, which member states were required to implement from January 1, 2025, small businesses will be able to take advantage of the small business exemption scheme in other member states where they do not have operations, providing their annual turnover in the country is below the state's threshold, and providing also that their EU-wide turnover does not exceed EUR100,000.

Further, the NRA has confirmed the value-added tax registration threshold for 2026 of EUR51,130, with registration required within seven days of when this threshold is exceeded. The threshold is equal to the threshold for 2025 but takes into account the country's adoption of the euro from January 1, 2026.