As an individual or as a company to sell online?

As an individual or as a company to sell online?

Question:
Hello!
I am employed on a contract in a company where they provide me with a minimum wage. I want to start an additional business - a clothing store and I will sell on platforms such as Instagram and Facebook. Can I do the sales as an individual without a company, with the idea of ​​filing a tax return every year? If I don't have a business, are the costs of advertising on the platforms and the purchase of clothes deductible from the taxable income on which I owe tax at the end of the year? It is a small business with a not very large turnover - about BGN 12,000. per year.
If it is not possible to operate as a natural person, what would you recommend?
Thanks in advance!

Answer:
Hello,
If you want to trade, you must be registered in some form as a trader. A natural person - a trader, who will buy - sell goods, can only be in the form of an ET (sole trader). Even if you do not register as such, the law equates you to an ET. The ET will be recognized for any expenses related to the activity, and if you have not registered as an ET, only the value of the goods you purchased will be recognized as an expense. The tax you will pay will be 15% of the realized profit. For the time during which you are active, you will also owe social security contributions (minimum BGN 198.00 per month, calculated on the minimum social security income for the country for this year - BGN 710.00). If the realized profit at the end of the year exceeds the amount on which you paid insurance contributions, you will owe insurance on the difference. If you decide to advertise your activity on Faceboock, Instagram, Google or other platforms or in general if you receive services from companies that are established in a member state of the EU (European Union) you have an obligation to register for VAT. In this mode of registration, you will not charge VAT on your sales, but you will owe VAT on the value of such services received.

Your other option is to open a company. The difference between a company and an ET is seemingly minimal - at the end of the year you pay 10% tax on the realized profit and an additional 5% dividend tax if you decide to transfer the company's profit to you as an individual. Insurance is again BGN 198.00 per month, but there is no annual equalization. The main differences are two: The first is that the company is responsible for its potential liabilities up to the amount of its capital, while you, as an ET, are responsible for the potential liabilities of your activity as an ET with all your personal assets. Also, in case of a possible VAT registration, only company transactions will be subject to regulation, whereas with an ET you may find yourself in a situation where a transaction that has nothing to do with your activity as an ET may also be subject to VAT regulation ( e.g. sale of own property).
We hope we have been helpful!
Greetings!