Bulgaria Tax Changes 2027: What the Drafts Mean for Foreign Business Owners

Bulgaria tax changes 2027 in brief: the draft tax bills the Ministry of Finance published on 23 September 2026 would raise the VAT registration threshold to €75,000, let companies carry tax losses forward for 10 years but offset them against no more than 70% of each year's taxable profit, require structured B2B e-invoices from 2028 and restate VAT fines in euro. They would not change the 10% income and corporate tax rates. The bills are still drafts.

Registered for VAT in 2026 because you crossed €51,130? Depending on a point the draft leaves open, the proposed €75,000 threshold may not let you deregister before 31 December 2027.

We read the drafts amending the VAT Act, the Corporate Income Tax Act (CITA) and the Personal Income Tax Act (PITA), and set them against the rules in force today. Below you will find what each change means for an owner turning over somewhere between €50,000 and €100,000, where the drafts leave a real gap, what they do and do not change in income tax, dividends, social security and tax rates, and what we would and would not do before 1 January.

Registered for VAT in 2026 or carrying losses into 2027? Send us your 2026 turnover and registration date, or write to us at [email protected].

Where the drafts stand: the 2026 rules against the September drafts

The table compares the rules in 2026 with the September drafts. The § numbers refer to the paragraphs of the published bills, so you can check them yourself in the Ministry of Finance drafts published as consultations 12733-K (VAT), 12737-K (CITA) and 12734-K (PITA) on the strategy.bg portal.

VAT registration threshold: the proposed €75,000 and deregistration

Under the VAT draft, the registration threshold for 2027 would be €75,000: paragraph 24 of the VAT draft replaces "51 130" with "75 000" in Art. 96(1) and (2)(1) of the VAT Act. Paragraph 105 makes the law effective on 1 January 2027 and does not list § 24 among the later-dated exceptions. EU law allows a national threshold of up to €85,000 (Council Directive (EU) 2020/285), so €75,000 sits within that ceiling.

The threshold works on domestic turnover in a calendar year, as defined in the VAT Act. It applies the same way to an EOOD and to a freelancer registered as a self-employed person. What changes for you depends on where you stand today.

If you are not VAT-registered yet

Nothing changes before 1 January. In 2026 the threshold is €51,130 and the application is due within 7 days of crossing it (Art. 96(6)(1) VAT Act; the National Revenue Agency page on VAT registration states the same). If your 2026 turnover passes €51,130 in November or December, you must register even though the draft would lift the threshold a few weeks later. The draft does not excuse late applications.

From 1 January 2027, if the draft is adopted, the trigger becomes domestic turnover above €75,000 in the calendar year. The turnover threshold is not the only way into the VAT system. Under Art. 97a VAT Act, a business established in Bulgaria has to register regardless of turnover, at least 7 days before the tax becomes chargeable, if it supplies services whose place of supply is in the client's EU country under the general rule for business clients (Art. 21(2) VAT Act), or receives services from abroad on which it must self-account for VAT. The draft does not change these grounds, and from 1 January 2027 it would add one for new buildings and building plots (VAT draft § 26). For EOODs that serve EU business clients, Art. 97a may matter more than the threshold. Our guide to VAT registration in 2026 covers the threshold rules in detail.

If you registered because you crossed €51,130

A common question is: Do I have to deregister? No. Under the VAT Act, once the basis for mandatory registration falls away, you acquire a right to deregister voluntarily (Art. 108(1)(1)). It is not one of the mandatory deregistration grounds in Art. 107, and Art. 109(2) leaves it to you to decide when to file, subject to the Art. 108(5) restriction explained below. The draft does not touch these rules.

What the draft also does not contain is a transitional rule. We read every paragraph of its transitional and final provisions (§§ 100–105): they deal with defence supplies, the December 2027 return, invoices around 1 January 2028, testing access and the start date, and say nothing about businesses already registered with turnover between €51,130 and €75,000.

Even where deregistration becomes possible, it is not automatically the better option. After deregistration you can no longer deduct the 20% VAT on rent, software, equipment or professional fees, and VAT-registered business clients gain little when you stop charging VAT, because they can usually recover it; consumers cannot. On the date of deregistration you are also treated as supplying any goods you still hold as assets on which you deducted input VAT, so VAT is charged on them (Art. 111(1) VAT Act, subject to the exceptions in Art. 111(2)): if you deducted VAT on a laptop you still use, VAT is charged on that laptop when you leave the system. Deregistering on the threshold ground is worth modelling only if your 2027 turnover stays below €75,000 and, if your 2026 turnover exceeded €51,130, the open Art. 108(5) question is resolved in your favour; the rules in force now are in our guide to VAT registration in 2026.

Crossed €51,130 in 2026? Send us your 2026 turnover and VAT registration date, or write to us at [email protected], and we will review your position under the law in force and under the draft.

New buildings and plots: VAT registration regardless of turnover from 2027 (draft)

From 1 January 2027, a business that makes taxable supplies of new buildings, their land, or regulated land plots would have to register for VAT regardless of turnover, at least 7 days before the tax becomes chargeable (VAT draft § 26). This matters if you hold or develop property through an EOOD.

Tax losses (draft): 10 years, capped at 70% a year

Currently, a Bulgarian company that elects to carry forward a tax loss must use it over the following 5 years, and in each year it may offset the loss against its full taxable profit (Arts. 70 and 71 CITA). The corporate tax rate is 10% (Art. 20 CITA), and the CITA draft does not change it.

The CITA draft (consultation 12737-K) would change both halves of that rule. We read the draft act itself. Under § 4, the new Art. 71(1) would let a company deduct tax losses of up to 70% of its taxable profit before loss relief; a loss smaller than that would be deducted in full. Under § 3, the carry-forward period in Art. 70(1) would become 10 years instead of 5. The transitional § 48 would allow losses incurred and not yet used at 31 December 2026 to be carried forward for up to 10 years, and the 70% cap would apply to losses from before and after that date together. Under § 52 the CITA draft would take effect on 1 January 2027, and §§ 3, 4 and 48 are not among the provisions dated earlier.

One point remains open: § 48 does not say from which year the 10 years run for older losses. Our reading [legal assessment, not settled practice]: if the 10 years are counted like today's 5, over the years following the loss year, the 2025 loss in the example below could be used until 2035. If they are counted from 2027, when the transitional rule would take effect, it could be used until 2036.

Worked example: a start-up with early losses

Assume an EOOD made tax losses of €30,000 in 2025 and €20,000 in 2026, and then taxable profit of €40,000 before loss relief in both 2027 and 2028. We use the 10% rate and apply the draft as published.

In this example the cap would not raise the total tax, because both losses are fully used by 2028 at the same 10% rate; it would move €1,200 of tax into the first profitable year, which is exactly when a young company tends to need its cash. If a loss is never fully used, the cap can raise the total. The longer period would help the other way: a loss that would expire after 5 years under today's rule would get more time to be used. The trade-off is timing against expiry, and it depends on how quickly you return to profit.

Structured e-invoicing from 2028 (draft): what would change for a small business

The VAT draft adds a new chapter on structured electronic invoices and a national platform run by the NRA. Under § 105 of the draft, these rules would start on 1 January 2028. In short:

• Who would issue: a VAT-registered supplier established in Bulgaria, for supplies taxed in Bulgaria (advance payments included), when the customer is established in Bulgaria and is a business, a non-taxable legal entity or a public body (§ 34, new paragraphs in Art. 113). Invoices for intra-EU supplies could remain ordinary invoices.
• Who would not: a supplier registered in Bulgaria but established abroad would issue ordinary invoices. A supplier that is not VAT-registered would be caught only when it invoices the state or a state or municipal body.
• Who would receive: under the draft, a recipient would have to be able to receive and process structured invoices electronically. Because the threshold would rise, more small firms would sit outside VAT, but they would still receive structured invoices from their Bulgarian suppliers.
• When an invoice would count: only once the NRA system assigns it a unique compliance code. Where the automatic check finds an error, the draft gives 48 hours to fix it.
• Pre-filled VAT returns: the NRA would generate a draft return from structured invoices and customs data and make it available by the 2nd of the following month; the sales and purchase ledgers would be abolished (§§ 44 and 45). The December 2027 return would still follow the old rules (§ 101).
• Penalty: from 1 July 2028, a VAT-registered supplier that fails to issue a structured invoice would face a fine (individuals who are not traders) or a pecuniary penalty (companies and sole traders) equal to the uncharged VAT, but at least €750 for individuals who are not traders and at least €1,500 for companies and sole traders (VAT draft § 85).
• Preparation window: the Minister of Finance would have to issue the technical ordinance within 6 months of the law's publication (§ 104), and the draft provides for 6 months of NRA test access; § 103 does not clearly say when that period starts.

For an EOOD that invoices mainly clients outside Bulgaria, the issuing duty is narrow. The EU background — the ViDA package and cross-border e-invoicing from 2030 — is in our separate guide to e-invoicing in Bulgaria and ViDA. If your EOOD invoices Bulgarian companies, the practical question is whether your accounting software will connect to the NRA platform in time.

Invoicing Bulgarian companies? Send us a sample invoice and the name of your software, and we will check your 2028 set-up against the draft.

VAT fines restated in euro (draft, from 2027)

Bulgaria has used the euro since 1 January 2026, at a fixed rate of 1.95583 leva per euro (Council Regulation (EU) 2025/1409, amending Regulation (EC) No 2866/98). Fines still written in leva continue to apply through the conversion rules of the Euro Introduction Act. The VAT draft would restate them in euro, and not evenly:

Euro equivalents are calculated at the fixed rate. For companies and sole traders, the euro amount of these three fines would equal today's leva figure, so they would roughly double (about 1.96 times their current value). For individuals who are not traders, these three fines would keep roughly today's value. Other fines differ. Some would be converted at about their current value: for example, the draft turns 200–1,000 leva in Art. 185(1) into €100–€500 for individuals and 1,000–4,000 leva into €500–€2,000 for companies (§ 88). Others would also keep the leva number in euro and so roughly double, for example Art. 184(1), 1,000–10,000 leva → €1,000–€10,000 (§ 87), and Art. 185a(1), where this applies to individuals who are not traders as well: 1,000–3,000 leva → €1,000–€3,000 (§ 89). The euro amounts would apply from 1 January 2027 with the rest of the law. With a 7-day registration deadline and monthly returns, the late-filing fines are the ones a small company is most likely to meet.

Income tax, dividends, social security and tax rates in 2027: current status

We checked the three Ministry of Finance drafts of 23 September 2026 against the rates in force on 14 October 2026:

• Personal income tax: the PITA draft (consultation 12734-K, §§ 1–20) does not amend the 10% rate in Art. 48 PITA. Its main change is to child tax reliefs; it would also restate the PITA fines in euro and take effect on 1 January 2027 (§ 20).
• Dividends: the tax rate on dividends paid to individuals (income under Art. 38(1) PITA) is set in Art. 46(3) PITA. None of the three drafts amends it: the PITA draft does not amend Art. 46, and § 51 of the CITA draft amends Art. 46(2) for food vouchers, not Art. 46(3). The current rules on taking profit out of an EOOD are in our guide to distributing dividends from an EOOD.
• Corporate tax: the CITA draft does not amend the 10% rate in Art. 20 CITA. Its other measures are described below.
• VAT: the VAT draft does not amend the VAT rates in Art. 66 VAT Act.
• Social security: the maximum monthly insurable income and the minimum insurable income for self-employed persons are set each year by the State Social Security Budget Act (Art. 6(2) of the Social Insurance Code). As of 14 October 2026 we had not found a published draft of that Act for 2027, so the 2027 figures are not yet known. We intend to add them to this page once the draft is published.

Who the 33% surplus-profit tax would hit, and the 7% tax on food vouchers (draft)

The CITA draft would impose a one-off 33% tax on surplus profit generated in 2027 (§ 50). It is limited to banks, insurers and reinsurers, providers of public electronic communications services, certain financial institutions and traders with at least five food retail outlets, so it does not reach a typical EOOD. Through § 51, the CITA draft would also amend the PITA to subject electronic food vouchers to a 7% final tax (Arts. 38(16) and 46(2) PITA).

Child tax reliefs (PITA draft)

The PITA draft would raise the child tax reliefs in Arts. 22v and 22g PITA and add a new relief for spending on a child's health, education and sports of €2,000, €4,000 or €6,000 depending on the number of children (new Art. 22zh).

The drafts could still change before adoption.

Freelancers and sole traders (ET): which 2027 changes apply

For self-employed persons taxed under the PITA, the CITA loss changes described above would not apply directly. The VAT threshold, the Art. 97a registration grounds and the e-invoicing rules would apply to them as to a company. Sole traders (ET) are different: their taxable income is the tax profit determined under the CITA (Art. 26(1) PITA), so the draft loss rules may reach them as well. The PITA draft does not change the 10% rate, but it would change the child tax reliefs, and the 2027 minimum insurable income for self-employed persons is not yet known (see social security). If you are weighing the structures, see our company vs. freelancer comparison.

What to do before 1 January 2027

1. Watch 2026 turnover until 31 December. The €51,130 threshold and the 7-day deadline apply until the end of 2026, whatever the draft says.
2. Do not deregister on the strength of a draft. Wait for the State Gazette, then check Art. 108(5) against your 2026 and 2027 turnover.
3. Check your Art. 97a exposure. Services taxable in an EU business client's country, or reverse-charge purchases of services, can keep you in the VAT system whatever your turnover.
4. Model 2027 corporate tax with the draft 70% cap. If you carry losses, plan the first profitable year's cash flow on the basis that, under the draft, at least 30% of each year's taxable profit before loss relief would remain taxable, however large the losses.
5. Put four questions to your invoicing software provider about 2028. Under the draft, can it (1) issue structured invoices through the NRA platform and record the unique compliance code, (2) receive and process structured invoices from your suppliers, (3) correct an invoice the NRA check rejects within 48 hours, and (4) connect to the NRA test access before 1 January 2028?
6. Diary the deadlines you already have. Our Bulgaria tax calendar lists the 2026 dates.

Bulgaria tax changes 2027: summary and next steps

If the drafts are adopted as published, raising the threshold would allow some registered businesses to deregister, subject to the open Art. 108(5) question; it would not oblige anyone to leave VAT. The longer loss period would give losses more time to be used, while the 70% cap would bring some tax forward into the first profitable year. The 10% income tax and corporate tax rates and the dividend tax rate would not change. E-invoicing (from 2028) and the euro fines (from 2027) are compliance tasks for your accounting set-up. Until the final texts are adopted, the three steps that matter most are in the list above: watch your 2026 turnover, do not deregister on the strength of a draft, and model 2027 corporate tax with the 70% cap. We intend to update this page once the adopted texts are published in the State Gazette.

Frequently asked questions

Sources

• Ministry of Finance — draft Act amending the VAT Act (version 1.0, 23 September 2026): § 24 (threshold), § 26 (new buildings), §§ 34, 42, 44, 45 (structured e-invoices and pre-filled returns), §§ 71–97 (fines), §§ 100–105 (transitional and final provisions, entry into force); no paragraph amends Art. 66. Public consultation 12733-K on strategy.bg.
• Ministry of Finance — draft Act amending the Corporate Income Tax Act (CITA draft, 25 pages), published with public consultation 12737-K on strategy.bg (23 September – 23 October 2026), read on 14 October 2026: § 3 (10-year period in Art. 70(1)), § 4 (70% cap in Art. 71(1)), § 48 (losses at 31 December 2026), § 50 (surplus-profit tax), § 51 (PITA amendments), § 52 (entry into force); no paragraph amends Art. 20.
• Ministry of Finance — draft Act amending the Personal Income Tax Act (PITA draft, 6 pages, §§ 1–20), published with public consultation 12734-K on strategy.bg (23 September – 23 October 2026), read on 14 October 2026: §§ 2–5 (child reliefs), §§ 13–19 (fines in euro), § 20 (entry into force); no paragraph amends Art. 48.
• National Revenue Agency — VAT registration: €51,130 threshold and 7-day deadline in 2026.
• Value Added Tax Act, Arts. 66, 96 (threshold of €51,130 as amended by State Gazette No. 115/2025, in force since 1 January 2026), 97a, 107, 108, 109, 111, 178, 179, 182, 184, 185 and 185a; CITA, Arts. 20, 70 and 71; PITA, Arts. 26(1), 38(1), 46 and 48; Social Insurance Code, Art. 6(2), as in force on 14 October 2026.
• Council Directive (EU) 2020/285 — special scheme for small enterprises (national threshold up to €85,000).
• Council Regulation (EU) 2025/1409 of 8 July 2025 amending Regulation (EC) No 2866/98 as regards the conversion rate to the euro for Bulgaria — 1.95583 leva per euro, applicable from 1 January 2026.

Disclaimer: This article describes draft legislation as published for consultation and the law in force as of 14 October 2026. It is general information, not legal or tax advice, and the adopted law may differ.