( Questions about Taxes ) Freelancer translator in Bulgaria

Check this again, but it appears that VAT registration is only mandatory with turnover of >=  50000 leva a year. So you may not be subject to it. The income tax (10%) is taken off 75% of your freelance income, not the whole thing.

On the other hand, you'll need to make Soc Security contributions, and these are rather large...

Thank you Sogy!

here I found out that you can avoid social contributions if you create a limited liability company:
https://trifonov.info/en/eu-freelancers-lowest-taxes/

hmmmmm, you have to put some order in your thoughts

1. There's nothing like a full time position for a freelancer!  You either work as a freelance or you work fulltime!!!

2. Registration to the National Commerce Agency ??? Doesn't sound  correct!! There's some mistake here. Besides the obligation to pay taxes comes from the earnings, and not from any registration!!!

3. VAT - here's a total mess in your post, actually you always pay VAT whenever you buy sth. from a VAT registered company! And this has noting to do with the money you earn!!!

4. 10 % tax - if you're talking about the corporate tax, then it will affect you once you register a company, if you're speaking about the income tax, then it applies always, with the exception of some patent based ocupations.

5. And this:
"here I found out that you can avoid social contributions if you create a limited liability company:"
is absolutely wrong !!!! No WAY!!!

check the link you have posted - it says: "the bad news is that you will have to pay social contributions" )))

6. One day you will discover that actually the corporate tax is 10 % but there's additional 5 % on income, accrued whenever you decide to withdraw money from your company.

So calculate on the basis of 15 %

kristiann wrote:

3. VAT - here's a total mess in your post, actually you always pay VAT whenever you buy sth. from a VAT registered company! And this has noting to do with the money you earn!!!

6. One day you will discover that actually the corporate tax is 10 % but there's additional 5 % on income, accrued whenever you decide to withdraw money from your company.

So calculate on the basis of 15 %

3 - if you are VAT registered, you have to charge VAT to your clients (at least withing the EU).

6 - This is the downside of minimizing social security contribution. But in many cases 15% is still less than 30%

3. ONLY a company can be VAT registered. If you work on an emplyment contract, even if you surpass the 50 000 threshold you will not have to charge anybody anything.

6. It is not like this. Actually 10 % is the corporate tax on the profit of your company, and 5 % is the divident tax, on the money you recieve form your company, apart from your salary.

The social contributions of about 30 % are another story, thay are paid solely on the basis of your gross salary.

Hi Thanks for the replies !

1. Yes you are right, by "fulltime" I mean one single client will bring me enough work as a freelancer

I want to register myself as a freelancer

If I earn 2000 lv as a freelancer then I would like to calculate my net income:

   - 20% VAT
   - 15% Tax
   - 200 leva social security

TOTAL NET INCOME ===>1160 leva after taxes, is this approximately right ?

forget the VAT, you do not pay VAT when you receive money

forget the 15 %, if you work as a freelancer, without a company you will most likely be on  some patent tax

social security contributions depend on whether your income is nett or gross, and on the type of workrelationship with your employer

Thanks Kristiann!

The VAT thing is not clear

Let's take an example: my Hairdresser in Jenski Pazar in Bulgaria

When I go to the hairdresser I give him 10 leva for a haircut. This 10 leva include 20% VAT.

So the hairdresser earns only 8 leva because later he will give 2 leva VAT to the government

The same for my baker: when I buy a Banitsa for 1 leva, the baker will earn only 0.80 leva after he has paid the VAT

In France and other countries as well, for every product or service you sell, the government wants to retrieve the VAT and will ask you the money for the VAT

I will continue my research and I will update this post, maybe it can be useful to other freelancers

The VAT works exactly in the same way here. Just that there are companies that are VAT registered ad companies that are not. The last ones do not add VAT to their prices.

Most likely your hairdresser is not VAT registered, and most likely your baker is VAT registered.

And finally, there might be a case, when you will have to register and add VAT to you price - this is in case you're doing translations for companies from the EU.

Thank you once again Kristiann for the extensive help provided ! really nice from you

yes you are right, so for clients in the EU I have to charge the VAT

maybe if someone reads this topic later it can be useful to know that i found out that clients in the US don't have to be charged of the VAT