Foreigner and freelancer in Bulgaria
Foreigner and freelancer in Bulgaria
Question:
Hello!
I am a natural person with the right of temporary residence in Bulgaria (I have a personal identification number). I am about to sign a contract for consulting information services with Greek and American companies, my total income will exceed BGN 50,000 per year. Do I have the right to register as a freelancer? If so, what tax and social security liabilities will I have? Am I obliged to register and charge VAT, if so, what percentage? What's the difference if I just pay personal tax?
Thanks in advance!
Answer:
Hello,
In order to be able to register as a freelancer, you must be able to present a diploma, certificate or other document certifying your ability to carry out the activity for which you wish to register. If you are not a citizen of the European Union, you will also need a certificate from the Employment Agency. On this site you can find more information about obtaining the certificate in question - https://www.az.government.bg/pages/dejnost-na-svobodna-praktika/.
When carrying out activity as a free profession, you will owe an annual tax in the amount of 10%, accrued on the income received during the year, deducted by 25% of deductible expenses and social security contributions.
The insurance contributions, in turn, are the following:
- monthly during the year you make insurance contributions, calculated on the value between the minimum and maximum insurance income for the country for the respective year.
- at the end of the year an annual equalization of the insurance contributions is made. The amount on which social security contributions are accrued is deducted from the amount of income received during the year and additional social security contributions are accrued on the difference. It should also be borne in mind that in addition to the minimum insurance income, there is also a maximum, and accordingly the amount on which the insurances are paid cannot exceed the maximum monthly insurance income.
Regarding VAT registration - if you are going to provide services to countries in the European Union (you mention Greece), you will have to register for VAT up to 7 days before the first service is provided. You will not owe VAT on sales made to legal entities outside Bulgaria.
We hope we have been helpful to you.
Greetings!
