At the end of September 2025, a Bill amending and supplementing the Value Added Tax Act (VAT) was submitted to the National Assembly of the Republic of Bulgaria. The proposed amendment seeks to raise the threshold for mandatory VAT registration from BGN 100,000 to BGN 166,000.
The proposed measure aims to alleviate the pressure on small and micro enterprises by reducing administrative and financial burdens, fostering entrepreneurship, and enhancing the overall business environment. Additionally, it is expected to contribute to greater transparency and formalization within the economy.
Easing the administrative and financial burden on micro and small enterprises – the backbone of the economy – is a key objective. Increasing the VAT registration threshold will relieve thousands of small traders, artisans, start-ups, and freelancers from substantial accounting expenses and bureaucratic obligations, enabling them to redirect resources toward growth, investment, job creation, and higher wages.
The increased threshold enables newly established companies to commence operations without being immediately subject to the obligations of the VAT regime. This provision is especially beneficial for small and micro enterprises, service providers, start-ups, and innovative businesses.
Between 2021 and 2023, the threshold for mandatory VAT registration was gradually increased – from BGN 50,000 to BGN 100,000, and subsequently to BGN 166,000 – as part of efforts to reduce the burden on small businesses and encourage entrepreneurship. Following a change in government, the threshold was reverted to BGN 100,000. According to the bill’s drafters, this reversal resulted in increased administrative pressure, additional costs for small entrepreneurs, and diminished predictability within the tax system. The explanatory memorandum to the bill emphasizes that reinstating the higher threshold of BGN 166,000 would restore a fairer regulatory framework and send a clear signal that the state is committed to supporting business and economic growth, rather than imposing unnecessary bureaucracy and financial strain on entrepreneurs.