Craftsman ceramics - freelance or Ltd.
Craftsman ceramics - freelance or Ltd.
Question:
Hello,
My question is this:
I am registered under the law on crafts - ceramics. I produce ceramic vessels that I plan to sell in specialized craft bazaars and fairs, as well as in souvenir shops. During the year I expect to issue 20-30 invoices. Expected income is about 8000-12000 BGN per year. Which option is better for registering as an EOOD or a freelance? Do you need a cash register?
Thanks!
Answer:
Hello,
Once you are registered as a ceramist under the Craft Law, the best option for you is to register as a freelance practitioner. You will need to file a personal income tax return (Personal Income Tax Act) for the income generated. Your income will be taxed at 10% tax. The tax base will be formed by declining revenue by 40% (without having to prove the cost of documents - invoices for purchases, contracts, etc.) and the remainder by 10%. As a freelancer, you have no obligation to issue cash registers for a cash register for sales.
If you think that the expenses of your activity will exceed 40% of the income from the activity, it is better to register your EOOD and use it to carry out your activity. In this case, sales revenues are recorded by issuing invoices for sales to legal entities and individuals who request such sales, as well as by issuing cash receipts from a cash register for sales for which the cash is received. You will have to prove the expenses with documents and the taxable for EOOD will be formed as the difference between the documented income and the documented expenses. Profit is subject to 10% corporate tax (profit tax). Only then can you distribute the already taxed profit as a dividend for you and subtract it from the assets of the company and dispose of that profit as you wish. But you need to know that to get a dividend as an individual, you will have to pay an additional 5% dividend tax.
It is up to you to evaluate and choose how you will conduct your business.
We hope we have been helpful.
Greetings!
