Bulgaria is a middle-size Eastern European country with affordable lifestyle, which is quickly becoming a hot spot for digital nomads. Except of being the oldest country in Europe, Bulgaria has a beautiful nature – formidable seaside and breathtaking mountain landscapes. Thanks to its low cost of living and expat community, in the recent years there are a lot of people who work remotely and choose the country as their place to work and live.
Registering as a Freelancer in Bulgaria
Being a digital nomad when you are starting an activity as a freelancer in Bulgaria, the one of most important conditions is to be registered in BULSTAT. It is something like a Bulgarian Commercial Registry, but for freelancers. You will be issued a unique identification number you will conduct your activity with. You will pay social securities with it, you can make a VAT registration with it, conduct contracts in your capacity as a freelancer in Bulgaria etc. After this registration is done, you are good to go.
Social Security for Freelancers in Bulgaria
As freelancer it is required to pay your own social security under the Code of Social Insurance. Remotely working individuals are provided with coverage for sickness and diseases, work-related accidents, old age, pension and more. This compulsory insurance is payable each month and it is in approximate amount of 8% of gross salary or income for health insurance, 5% for pension insurance and 17% for basic social security. However, the amount paid for social security lowers your tax base.
Invoicing clients as a Freelancer in Bulgaria
Freelancers should prepare a separate invoice for the goods and services that are selling. Each invoice must be in compliance with the VAT invoice requirements issued by the EU VAT Directive. Invoices must be issued for each service provided and should be filed away for at least 10 years. Be aware of that, the invoice should be VAT compliant, but if you as a freelancer do not generate income more than BGN 100 000 a year, you are not obligated to have VAT registration in Bulgaria and respectively add VAT on you goods and services prices.
All Bulgarian invoices issued by freelancers must have a date of issuance and a unique invoice number. The invoice should clearly display the freelancer’s VAT number as well as the customer’s Bulgarian or BULSTAT VAT number. You also need to show both the freelancer’s and customer’s address and a description of the services or goods that the customer purchased. For goods, you must include the number of items sold and their unit prices. If the date of delivery is different from the invoice date, the date of delivery must be displayed. The invoice needs to show the product’s or service’s net taxable value. Other information that must be shown on the invoice includes the VAT rate, any reason for a VAT exemption, the margin scheme and the gross value for the invoice. Below, you can find an example of an invoice:
Tax rate for Freelancers in Bulgaria
The personal income tax rate for self-employed individuals (freelancers) is flat – 10% of your tax base. Depending on the activity you are conducting, there is a possibility to have legally recognised expenses, which make your tax base lower. Most common percentage of these expenses is 25%, but it can go up to 40% in some cases – if you are freelance journalist, scientist etc. For example – if you have income of EUR 2 000 per month, you can deduct 25% of this amount as expenses. The 25% rule is applied automatically no matter if you have more or less expense. Then you deduct the social security that you have already paid and the amount left is your tax base, to which you apply the 10% income tax rate.
Our team can help you and assist you in the procedure for registering you as a freelancer in Bulgaria. We can provide consultations, drafting of the necessary documents and depositing them before the state agencies. Also, we are working with trusted accountants who can do all the paperwork regarding you activity. We can do the whole process for you remotely – it saves your money and time.
If you would like to be a freelancer in Bulgaria, do not hesitate to contact us. We would be more than happy to help you move to Bulgaria where to establish and grow. You can write to one of our team members in LinkedIn, if you feel ok with it, too.