From 1 January 2026 small businesses in Bulgaria will have a genuine opportunity to expand their activities in the European market, free from the significant administrative and financial burden of multiple VAT registrations in different countries.
At GA Book our accounting firm closely monitors changes in tax legislation to help our clients take full advantage of new regimes and reliefs.

So, what is the 'SME regime' under the VAT Act?
Т.нар. SME режим (Special Scheme for Small Enterprises) е нов режим по ЗДДС, въведен на ниво Европейски съюз, който The SME (Special Scheme for Small Enterprises) regime is a new VAT regime introduced at the EU level. It allows small enterprises to sell to customers in other EU countries without charging or registering for VAT in each individual country.
In other words, it makes selling in the EU easier, cheaper and less bureaucratic.

Who can benefit from the scheme?
It applies to small businesses that meet all of the following conditions:
EU-wide threshold:
Your total annual sales turnover within the EU must not exceed €100,000.
National threshold:
You must also meet the VAT exemption threshold in the country where you make your sales. For example, for Bulgaria, this is up to the national registration threshold of €51,130.

Specific registration:
Prior registration with the National Revenue Agency is required to apply the SME regime.
Key benefits for your business:
Cross-border VAT exemption
Sell goods or services to customers in other EU countries without charging VAT.
No VAT registration abroad
Avoid costly and complex registrations, communication with foreign administrations and local consultants.
Lower administrative costs
Fewer declarations, less reporting and lower accounting costs.
Better competitiveness
Lower final price for the customer = greater chance of sales on the European market.

What are the obligations when applying the SME regime?
Although the regime is simplified, it is not completely automatic. Companies are required to:
pre-register for the regime;
submit quarterly reports to the National Revenue Agency;
strictly monitor turnover by country and for the EU as a whole;
invoice correctly in accordance with the requirements of the regime.

How can GA Book help you?
At GA Book, we take care of the entire SME regime administration process, including:
analysing whether the regime is suitable for your business;
registration and communication with the National Revenue Agency;
ongoing monitoring of turnover;
preparation and submission of quarterly reports;
consulting on expanding your business in the EU.
This allows you to focus on sales and growth while we ensure your legal and accounting security.
Don't miss this opportunity!

The SME regime is a powerful tool for small businesses that want to access the European market without taking on unnecessary risk or expense.
Timely preparation is essential — incorrect registration or omissions in reporting can result in penalties.
Find out more about our services and how we can transform your accounting at www.gabook.bg/en

Frequently Asked Questions (FAQs) about the SME Regime under the VAT Act
What is the SME Regime under the VAT Act?
It is a special scheme for small enterprises, allowing exemption from VAT on cross-border sales within the EU, without the obligation to register for VAT in each individual Member State.

When does the SME regime come into force?
It comes into force on 1 January 2026 and applies to all EU Member States.

Does my company have to be registered for VAT in Bulgaria?
No, as the SME regime specifically applies to small businesses that are not registered for VAT and meet the exemption conditions at both the national and European levels.

What is the maximum turnover for applying the SME regime?
Up to €100,000 total annual turnover within the EU.
At the same time, you must also comply with the national VAT exemption threshold in the country where you make your sales.

Do I have to file returns under the SME regime?
Yes. Despite the relief, companies are required to submit quarterly reports to the National Revenue Agency containing information on sales made in the EU.

Can I apply the SME regime to all my EU customers?
The SME regime only applies under the conditions set by the relevant Member State, in compliance with its national threshold. Not all supplies fall within the scope of the regime, so individual accounting and tax considerations are required.

What happens if I exceed the €100,000 threshold?
If you exceed the European threshold:
You lose the right to apply the SME regime;
You are required to register for VAT under the general rules, including possible registrations in other countries.

Is the SME regime suitable for online stores and digital services?
Yes. The SME regime is particularly suitable for:
online trade in goods;
digital services;
freelancers and consultants working with EU clients.
However, each activity should be analyzed individually.

How specifically can GA Book help me?
We can help with:

• assessing whether the regime is applicable to your business;
• registering for the SME regime;
• preparation and submission of quarterly reports;
• ongoing monitoring of turnover;
• consulting on growth and reaching thresholds.

How do I get started?
The best first step is to seek professional advice to avoid making mistakes early on.
Contact GA Book to learn how to use the SME regime to your advantage:
www.gabook.bg/en

Author: Galya Angelova