Bulgaria's National Assembly passed the Law on Amendment and Supplement to the Value Added Tax Act on 17 December 2025, with the legislation promulgated in State Gazette issue 115 of 2025 and entering into force on 1 January 2026.

The law's passage closes two European Commission infringement procedures — No. 2025/0009 and No. 2025/0010 — opened over Bulgaria's failure to transpose Directive (EU) 2020/285 on special VAT regimes for small enterprises and Directive (EU) 2022/542 on VAT rates within the required deadlines. The Commission had issued reasoned opinions in July 2025, representing an escalation toward potential referral to the Court of Justice of the European Union.

The adopted text follows the bill submitted by the Council of Ministers under Prime Minister Rossen Jelyazkov on 3 November 2025. It was considered during the fourth session of the 51st National Assembly, which accepted it on 17 December 2025.

The law creates two new VAT exemption regimes for small businesses. Domestic enterprises with annual Bulgarian turnover below €51,130 may operate without charging VAT. A separate EU-wide regime allows both Bulgarian businesses and businesses established in other member states to benefit from equivalent exemptions on cross-border supplies within the bloc, subject to an EU-wide annual turnover ceiling of €100,000. Businesses may choose between the general VAT regime and the special regime, and are not obliged to apply the exemption in every member state where they operate.

Additional provisions update Bulgaria's minimum state aid rules in line with Regulation (EU) 2023/2831, modernise fiscalisation requirements for automated fuel dispensing equipment, and streamline VAT registration and deregistration procedures.