In the first issue of Tax News for 2026 we share the most significant changes to the VAT Act, promulgated in State Gazette Issue No 115 dated 30 December 2025.
New VAT regime for supplies of goods with installation by EU suppliers
According to the changes, starting in 2026 the supplies of goods that are assembled or installed by foreign suppliers established in the EU will no longer be subject to VAT reverse charge by the Bulgarian recipient. For non-EU suppliers such a relief was not available anyway. As a result, foreign suppliers of goods with installation are required to register for VAT in Bulgaria before their first transaction.
The change requires businesses to review their current and planned contractual arrangements related to such transactions and to coordinate efforts with their counterparties to meet the new legal requirements.
Introduction of special schemes for small enterprises
In line with harmonizing the local legislation with the provisions of the VAT Directive (Directive 2006/112/EC) two special schemes for small enterprises are introduced:
- Small enterprises scheme in the country, and
- Small enterprises scheme in the EU.
In general, the small enterprises scheme in the country replicates the current regime for unregistered taxpayers. The turnover for VAT registration is fixed to EUR51,130 on an annual basis. The list of supplies for calculating this threshold has been extended to include exempt supplies of immovable property. Taxpayers, which in 2025 exceeded the threshold on the basis of the new criteria, must file application for VAT registration by 8 January 2026.
The scheme for small enterprises in the EU in its turn allows small businesses established in one Member State and performing supplies in other Member States to be exempt from charging VAT on their supplies in the respective jurisdictions. For goods and services received and used for performing these exempt from VAT supplies businesses will not be entitled to deduct input tax.
Taxpayers must file an application indicating the EU Member States in which they wish to apply the VAT exemption and following a registration procedure they would receive a VAT number ending with “EX”. Their annual turnover in the EU must not exceed EUR 100,000.
The amendments to the VAT Act introduce other changes aimed at synchronizing the legal texts with the new rules.
For Information
Associate Partner, Tax
Tel.: +359 (2) 9697 700
Senior Manager, Tax
Tel.: +359 (2) 9697 700
