Freelancer vs EOOD in Bulgaria: Which Pays Less Tax?

The two routes for solo earners

In Bulgaria, an independent professional can operate as:

• A Self-Insured Person (СОЛ / freelancer) — registered with the NRA as an individual
• An EOOD — a single-shareholder limited company

Both are legitimate. Total tax burden depends heavily on income level.

Freelancer math (2026)

A freelancer can deduct 25% of gross revenue as a standard expense allowance (for certain professions — engineers, consultants, IT, designers, journalists, etc.). Then:

• 10% personal income tax on the remainder
• 27.8% social + health contributions on a chosen base between BGN 1,000 and BGN 4,000 (~EUR 510-2,045)/month

Example — freelancer earning EUR 60,000/year

• Standard expense deduction: EUR 15,000
• Taxable: EUR 45,000
• Income tax (10%): EUR 4,500
• Social on max base (EUR 2,045 × 12 × 27.8%): EUR 6,822
• Total: ~EUR 11,322 (18.9% effective)

EOOD math (2026)

• 10% corporate tax on company profit
• 5% dividend tax on distribution
• Minimal director salary (e.g. EUR 1,000/month) bears social contributions

Same EUR 60,000 revenue through an EOOD

• Director salary: EUR 12,000 → social ~EUR 3,340 + tax ~EUR 870
• Accounting: EUR 1,800/year
• Profit: ~EUR 42,000 → 10% CIT = EUR 4,200
• Dividend net of CIT: EUR 37,800 → 5% tax = EUR 1,890
• Total: ~EUR 12,100 (20.2% effective) — but you've covered social security AND have a separate legal entity

When the EOOD pulls ahead

The EOOD wins clearly above EUR ~80,000 net revenue, because:

• Social contributions are capped (paid only on salary base, not profit)
• You can retain profit and defer dividend tax
• You can deduct real business expenses (laptop, travel, software) on top of salary

When freelancing wins

• Revenue below EUR 40,000
• Very few business expenses
• You don't need a separate legal entity for clients or contracts

Other considerations

• Liability: EOOD shields personal assets; freelancer doesn't
• Pension base: freelancers pay full social on the chosen base; EOOD founders pay only on salary
• Credibility: enterprise clients often require a company contract

Bottom line

Under ~EUR 40k/year, register as a freelancer. Over ~EUR 80k/year, run an EOOD. Between the two, model both.