Al Hathaway · Independent work, clear records
Stripe, Upwork and Fiverr in Bulgaria: Taxes, VAT and Freelancer Payments
Your client pays online. A platform keeps a fee. A smaller amount reaches your bank. Build a clear trail between the work, the documents and the money- before tax deadlines arrive.
Receiving money through Stripe, Upwork or Fiverr does not create a separate Bulgarian income-tax category. Your legal status, tax residence, contractual income and the actual services determine the treatment. VAT on the service you sell and VAT on a platform service you buy must be reviewed separately. A bank payout alone cannot answer either question.
Start with the agreement
Who buys your work, and who handles the payment?
Write down three roles for each income stream: the customer buying your work, the platform providing a service to you and the provider moving the money. One business may fill more than one role, but a name on your bank statement is not sufficient evidence of all three.
You sell to the client
In a direct client engagement using a payment processor, document the client sale and the processing service separately.
Read the platform terms
The invoice and earnings model can differ across platforms. Check the contracting parties and any agency or self-billing arrangements.
A different contract
If a provider genuinely acts as merchant of record, map its sale to the end customer and your own supply under that agreement.
A checkout page does not prove a merchant-of-record arrangement
Do not assume that a provider takes over your tax or invoicing duties because it collects payment or calculates tax. Confirm the specific product, agreement, seller identity and settlement documents.
Before you start, save the terms applying to your account, its registered legal name and the fee schedule. Revisit the file when you switch from an individual account to a Bulgarian company.
Reconcile the whole transaction
The bank payout is not automatically your revenue
A payout may combine several sales, subtract fees and refunds, include earlier balances or exclude funds held in reserve. Identify your contractual entitlement first. Then explain how that amount becomes the payout. The correct gross or net presentation follows the agreement and applicable accounting or tax rules.
Illustration: a direct client sale through a processor
You are entitled to €1,000 for a project. A separately supplied processing service costs €30, leaving a €970 payout. The records explain the €1,000 client payment and the €30 fee separately. The payout does not turn the agreed project price into €970.
This is a simplified reconciliation example, not a quoted platform price or a universal rule for marketplace earnings.
Keep separate columns for currency and dates. Work completion, invoicing, payment into a platform balance, availability for withdrawal and bank receipt can fall in different periods. For an individual, determine when income is acquired under the applicable rules; for a company, determine the accounting recognition date. Do not move income into a later year merely by delaying withdrawal.
Your status matters
Can a freelancer deduct platform fees?
For many eligible Bulgarian freelance professions, personal income tax uses a statutory expense deduction of 25%. Other categories can have different treatment, including a 40% deduction for qualifying copyright income and lawyers. First classify the activity and income correctly.
Statutory expenses and actual expenses are different systems
Where your income is taxed with a statutory expense deduction, actual platform commissions do not create an additional deduction on top of that allowance. Separately incurred commissions must not silently reduce the income base and then be deducted a second time through the statutory percentage.
A company follows a different framework: actual business expenses require appropriate documentation and tax analysis. Even where a fee is not separately deductible for your personal income tax, its documents may remain relevant for VAT and reconciliation.
Your social-security obligations also continue independently of the payment provider. For the broader framework, read Freelancer Taxes and Social Security in Bulgaria and Freelancer vs Bulgarian Company.
Service-by-service review
Does using Stripe require VAT registration in Bulgaria?
There is no reliable blanket answer covering every Stripe product and fee. Identify the supplier on your agreement or fee document, the precise service and its Bulgarian VAT classification. An invoice without VAT does not, by itself, prove that a service is exempt.
Stripe’s European fee guidance distinguishes payment processing from other products, including Billing, Radar and Tax, and describes its own VAT charging policy. That policy does not replace the recipient’s Bulgarian reverse-charge analysis.
| Item to review | Question for your accountant |
|---|---|
| Payment processing | Does the actual service qualify for the financial-services exemption? Examine its functions and the supplier’s responsibilities. |
| Software or additional products | Is this a taxable foreign service with a Bulgarian place of supply and VAT payable by you? |
| Hardware | Is this a goods transaction requiring a separate VAT analysis rather than the services test? |
| Merchant-of-record product | Who sells to whom under this particular contract, and what does each settlement document represent? |
The Court of Justice’s payment-services case law makes clear that merely technical or administrative assistance is not automatically an exempt payment or transfer. Applying that distinction to your own contract requires a review of the actual service; the cited judgment is not a ruling about your Stripe account.
Article 97a can apply when you receive taxable services with a Bulgarian place of supply for which you owe VAT under Article 82(2). For that trigger, plan the application no later than seven days before tax becomes chargeable, including a relevant advance payment. A fee withheld from a settlement still needs analysis; a separate bank transfer is not essential.
See the Article 97a practical guide for registration and monthly compliance. Do not wait for substantial turnover to review foreign service purchases.
Different document models
Upwork and Fiverr: what should you download?
Separate work from platform services
Keep the client contract, transaction report, available work invoices and platform fee documents. Review the customer details and whether the platform-generated document meets your Bulgarian requirements.
Upwork’s EU guidance says it charges VAT on its services when a valid VAT ID is not on file. Entering a VAT ID changes platform billing; it does not make the underlying service tax-free or remove your Bulgarian obligations.
Use earnings records as well
Fiverr states that sellers do not receive invoices for completed orders or for the percentage withheld from earnings. It provides earnings documentation; separately purchased products such as Seller Plus and Ads have their own invoices.
Download the earnings statement and transaction CSV, and retain order and payout records. Ask your accountant how to document your supply and the withheld amount under your specific arrangement.
Fiverr’s help centre allows sellers to invoice Fiverr for earnings, but that platform instruction is not a universal Bulgarian legal conclusion about the recipient, amount or timing of your invoice. The contractual role and local rules must support the approach you use.
A missing commission invoice is a documentation problem to resolve
Keep the terms, fee calculation and transaction evidence. Request any available supplier documentation and agree the treatment before filing. Do not invent a supplier invoice, and do not conclude that VAT cannot arise merely because no PDF invoice is available.
Use the fee actually shown for your contract and period. Avoid building your records around a percentage copied from an old article.
Classify the sale separately
EU businesses, non-EU businesses and private customers
For cross-border work, document the actual customer’s identity, business status and relevant establishment. An intermediary’s location, a payment card’s issuing country or the currency is not a substitute for this evidence.
- EU business customer: review the general B2B services rule, the Article 97a registration trigger, reverse-charge invoicing and VIES where applicable. Check any relevant small-enterprise-scheme exception.
- Non-EU business customer: assess the place of supply and evidence of business status. A US customer does not, on its own, trigger the EU-customer limb of Article 97a; purchased foreign platform services remain a separate question.
- Private customer: determine the service-specific B2C rule. Personally delivered consultancy and electronically supplied automated products may follow different rules. Review OSS where relevant.
Property-related services and other special cases need their own analysis. Start with the VAT registration overview rather than applying one invoice template to every country.
If a foreign customer withholds tax, obtain the supporting certificate and review the income category, source and applicable treaty. A foreign payment does not automatically mean double taxation, and a treaty does not automatically exempt every payment.
A repeatable monthly process
The documents to send your accountant
- Sales and customer evidence. Contracts, order references, invoices, credit notes and relevant business or VAT details.
- Platform activity. Transaction-level exports covering earnings, fees, refunds, disputes, reserves and adjustments.
- Supplier documents. Fee invoices, subscription invoices and terms explaining deductions without a separate invoice.
- Balances and payouts. Opening and closing platform balances, payout references and bank or payment-account statements.
- Exceptions. Explain withheld tax, missing documents, a new product, a changed entity or a changed billing country.
Stripe’s payout reconciliation report matches automatic payouts to the transactions they settle. For manual payouts, its Balance report is the relevant alternative. Export the itemized data instead of sending only a screenshot of the payout total.
A useful reconciliation sheet
Use one row per transaction, with the order or invoice reference, contractual amount, currency, relevant dates, platform fee, refund, payout reference and remaining balance. Link each row to its documents. Keep fee VAT and client-sale VAT as separate review fields.
Agree a document handover date with your accountant early enough for your actual filing deadlines. Where VAT registration creates monthly duties, a quiet month is still part of the process.
Avoid gaps before they grow
Common mistakes with platform income
- Reporting only the net bank deposit without explaining fees and balances.
- Using one generic invoice recipient for every marketplace.
- Assuming no VAT on a foreign supplier’s invoice means no reverse charge.
- Mixing company income with a personal platform account and registration details.
- Subtracting actual commissions again when using statutory expense deductions.
- Ignoring small subscription charges until the annual tax return.
- Recording every receipt generated by a checkout as a compliant Bulgarian invoice.
Fiverr also reports information under applicable platform-reporting rules, including DAC7. Platform reporting and your own tax declarations are different obligations. Reconcile reported figures with your records rather than assuming that a platform report settles your taxes.
Card payments also deserve a separate documentation check
This guide covers income records and VAT questions. If you sell through your own website or checkout, separately review Bulgarian fiscal-documentation and electronic-shop rules for the payment arrangement. A processor’s payment confirmation alone does not establish compliance.
Clear answers
Frequently asked questions
Do I pay Bulgarian tax if the money stays on a platform?
Is every Stripe fee exempt from VAT?
Does Upwork charging VAT mean I can ignore Article 97a?
What if Fiverr does not issue a commission invoice?
Can I deduct fees as well as the 25% statutory expenses?
Can I use a single monthly document?
Does merchant of record mean I have no Bulgarian obligations?
Official sources and platform documentation
- NRA: freelance professions and statutory expenses.
- NRA: VAT registration application and Article 97a.
- Stripe: taxation of Stripe fees and payout reconciliation reports.
- Upwork: EU VAT for freelancers.
- Fiverr: invoices and earnings documents.
- Fiverr: platform tax reporting and DAC7.
- Court of Justice: DPAS, C-5/17, payment-services exemption.
Reviewed on 30 September 2026. Platform documentation describes platform processes; Bulgarian law determines your local obligations. Examples are simplified. Your contract, income category, residence and registration status require individual assessment.
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Freelancing in Bulgaria · Freelancer vs company · Taxes and social security · Article 97a practical guide
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