Summary of VAT Regime Changes After 1.1.2026

VAT Act changes from January 1, 2026 – summary

As of January 1, 2026, substantial amendments to the Bulgarian VAT Act enter into force, transposing Directive (EU) 2020/285 on the special scheme for small enterprises.

The changes primarily affect small enterprise regimes and cross-border EU supplies.

Key practical impact

From 2026, businesses effectively have three separate regimes for EU sales:

1. Standard VAT registration
2. OSS (One Stop Shop)
3. SME scheme (EX number)

Choosing between them is now a tax-planning decision, not just an administrative registration step. A critical point: the SME scheme may be more expensive in practice, because it does not allow input VAT deduction.

Legislative highlights covered in this article

• New chapter for small enterprise schemes (Art. 168d-168l)
• EU SME scheme conditions (Art. 168e-168zh)
• New EX identification number (Art. 168zh(11))
• New invoicing requirements (Art. 114(13))
• Quarterly reporting regime (Art. 168l)
• Restriction on combining SME and OSS for the same member state (Art. 168g(4))
• Partial loss of the regime by country (Art. 168z)
• Changes to Art. 97a registration rules
• Domestic small enterprise regime in Bulgaria (Art. 168d)
• Unchanged mandatory VAT threshold under Art. 96(1)