Freelance company charges

Jack Keyman

New member

Member since 26 July 2023

Jack Keyman

29 October 2023 11:45:01

Jack Keyman

29 October 2023 11:45:01

Hello everyone,

This is pretty difficult to me to calculate the charge if i build a freelance status in bulgaria.

I have a mai' contract with a client for 1600euro per month, how much i will pay on this?

I was in france and freelancers have no VAT so my client paid me 1600e and no VAT on it.

If i'm in bulgaria, my client will have to pay me 20%more right? cuse i will pay 20%VAT to the bulgarian government?

I think he will not be agree with that an. continue to pay me 1600e including VAT..

So, if i calculate approximately,

I will pay :

22% social contribution (around 350euro)

+30% government taxes(10%+20%VAT) on 1250e(income minus social contribution)= around 400e

So i will have a final income of 850e?

1600e-350-400?

I'm maybe totally wrong please rectify me

Thanks a lot, that's important to know. what will be the final income yo not face any surprise.

I will also take an acountant, any idea about the price of acountant service to. declare all my income and pay my taxes?

Thank you very much!!!

gwynj

Bulgaria Expert

Member since 30 June 2020

Bansko, Blagoevgrad

gwynj

30 October 2023 10:05:27

1941

gwynj

30 October 2023 10:05:27

1941

Bansko, Blagoevgrad

@Jack Keyman

As a French citizen it's very easy to relocate here as you can do the EU Citizen Registration with proof of funds, proof of health insurance (EHIC accepted), and proof of address.

I'm not an expert on self-employment in Bulgaria, but I'd be shocked if you were worse off than in France! Here, your income would be just over 3X the minimum wage.

It might be interesting to compare your French gross/net and the minimum wage there, with the Bulgarian equivalents.

I believe there is a VAT threshold, so I suspect that, as in France, your 1,600 euros per month is below it. (Or you can perhaps restructure it as a retainer, with some expenses reimbursement.)

Of your 1,600 gross payment, there is a 400 euros (25%) allowance for expenses. And then about 28% deductions for social security / healthcare. And finally 10% on the remainder as income tax.

So your net income should be around 1,140 euros... significantly better than your calculation. (i.e. 1600 - 38% of 1200)

With one client, it's probably quite simple to stay self-employed. However, some accountants here might suggest using a Bulgarian limited company, as you have more flexibility over expenses, and you can pay yourself a smaller salary to reduce social security base.

If you message me privately, I can recommend an accountant and immigration attorney.

Hristo Marinov

New member

Member since 23 November 2015

Varna

Hristo Marinov

20 February 2024 11:46:56

Hristo Marinov

20 February 2024 11:46:56

Varna

@Jack Keyman

I will try to make it short:

If you live in Bulgaria (more than 183 days) you will be considered as "local person" for tax purposes AND suply services to EU based company AND you have monthly income of 1600 EUR you have two options:

1/ Work with a company (you set up your own). In that case:

1.1 Pay monthlysocial insurances 27.8% on a base of 933 BGN - 133 EUR

1.2 Mandatory registration for VAT as provider of services to EU based company (BEFORE starrting the activity). VAT rate - 0%. You will invoice with NO VAT included.

1.3 The company will pay corporative tax on profit (income minus expenses), assuming minor or zero expenses - 10% on the income - say 160 EUR a month (paid ones a year after the years ends); The is also divident tax of 5% (paid on the difference 1600-160) - 72 EUR

TOT taxes: 365 EUR out of 1600 EUR income

Accountancy services for VAT registered company can vary from 100 to 400 EUR depending on the accountant location. Company formation - betwwn 100 to 200 EUR (paid to solictor).

2/ Work as freelancer

2.1 Register in Migration polive and obtain Bulgarian ID card

2.2 Register in Registry agency as freelancer

2.3 Register in NRA as social insurance payer

2.4 Register for VAT BEFORE starting the activity. 0% VAT

2.5 Pay social insurances on the full amount 27.8% - 333.60 EUR per month (25% recognized expenses accepted)

2.6 Pay tax - 86.64 EUR

TOT taxes: 420.24 EUR

Accountancy services for VAT registered freelancer vary in aproximatelly the same range as for company.

The description up is accurate however very general. For more details you need to discuss this with a profesional.