Craftsman's activity
Craftsman's activity
Question:
Hello!
I am a craftsman and I have several questions:
1. As a journeyman I can sell my products as a craftsman, right?
2. What do I owe as taxes, fees, insurances?
3. My clients are mostly abroad, we are on forums, social networks, etc. Does it matter which country they are in? Did I find out about any obligation for the craftsman to register for VAT if he sells to the EU and passes a turnover of BGN 20,000? Does this apply to restored and artistically improved second-hand clothes? And as far as I understand it is only for the EU? For the United States, the limit is 50,000. Did I understand correctly that only when this limit of 20,000 is exceeded does this mandatory VAT registration take place? Because it's not very clear to me. In this case, I sell products that I have made.
Thanks in advance!
Answer:
Hello,
Directly to your questions:
1. As a journeyman I can sell my products as a craftsman, right? - Once you are a craftsman and have the relevant master certificate for journeyman, you can register as a freelancer in the Bulstat register.
2. What do I owe as taxes, fees, insurances? - Regarding taxes, you have two options: to pay patent tax (at your request and with an annual turnover of less than BGN 50 thousand) or to be taxed as a standard natural person (again at your request or with an annual turnover of over BGN 50 thousand) . The patent tax is determined by the municipality in which you carry out your activity (different municipalities have different amounts of the due patent tax). When taxing as a standard individual, at the end of the year you will owe a tax of 10% on the so-called tax base. This tax base is formed by deducting 40% of legally recognized expenses and due social security contributions from the total income received. For the time in which you carry out activity, you will owe insured contributions on a monthly basis. The insurances you will owe will be calculated on an amount of your choice, but not less than the minimum insurance income for the country. At the end of the year, with the submission of your annual tax return, the social security contributions are equalized, and depending on the income received by you during the year, it may be necessary to supplement social security contributions.
3. My clients are mostly abroad, we are on forums, social networks, etc. Does it matter which country they are in? Did I find out about any obligation for the craftsman to register for VAT if he sells to the EU and passes a turnover of BGN 20,000? Does this apply to restored and artistically improved second-hand clothes? And as far as I understand it is only for the EU? For the United States, the limit is 50,000. Did I understand correctly that only when this limit of 20,000 is exceeded does this mandatory VAT registration take place? Because it's not very clear to me. In this case, I sell products that I have made. - it can be said that you understood correctly. To begin with, we will assume that your customers are individuals. We will divide your sales into three - in Bulgaria, in the EU and in Third countries (outside Bulgaria and the EU)
- When selling in Bulgaria and Third countries, you form a turnover for VAT registration in Bulgaria. Upon reaching BGN 50,000 turnover for the last 12 months, an obligation for VAT registration arises in Bulgaria.
- In sales in the EU, you perform the so-called. "Remote Sales". After July 1, 2021, if you make distance sales totaling more than BGN 20,000, you will have two options - either to register for VAT in each country in which you make sales or to register for VAT in Bulgaria.
If you sell to companies, whether in Bulgaria, the EU or third countries, you always form a turnover for VAT registration in Bulgaria.
Also, the basis for VAT registration would be if you receive a service from a person registered in the EU. We mention it because in order to promote your products, you can choose to advertise on Facebook, Google or directly upload your products for sale on a platform that would charge you a commission when making sales. Ie you would receive a service from a person registered for VAT in the EU, which leads to mandatory VAT registration no later than 7 days before the first receipt of services.
We hope we have been useful to you!
Greetings!
