How to work as an artist?
Self-employed or commercial enterprise (‘firm’)?

Taxation of artists
A lot of people involved in art have been asking themselves this question lately. And of course, there is no clear answer to this question. I will touch only on some aspects of social and taxation, without any pretense of completeness, since many options cannot be covered briefly. For a more complete consultation regarding your specific case, you can contact us for a professional consultation through the contact forms.
In principle, there is no problem for an artist to register in the Bulstat register as a self-employed person. For this purpose, he needs a diploma or other document showing that he has such competencies, an identity card, and an application in the Bulstat Register.
Taxation of artists as a self-employed person
What follows from this?
- From the moment this artist starts working, he will have to start self-supporting at least on the minimum insurance income for the country. As of May 2024, it is BGN 933 and at least 27.8% insurance must be paid on it. I.e. if you plan to start an independent business, plan about BGN 300 start-up costs for insurance. Henceforth, depending on whether this artist creates works that are subject to copyright or works on commissions where the result of his work is not subject to copyright, there may be no additional insurance in the former case or there may be in the second case.
- In cases where the artist creates works of art, 40% of legally recognized expenses will be deducted from his taxation, and in other cases 25%. I.e., if you have more income than the first type and your actual expenses do not exceed this 40%, it might be better to register as a freelancer. The tax is 10%. Ask a copyright attorney about which works of art are subject to copyright.
- As a freelancer, you have one serious plus – you do not comply with the requirements of Regulation H-18, better known as the “Regulation on cash registers”. It follows that you do not buy a cash register, you save the costs of maintaining it at the maintenance companies, and you save hours wondering which of the vague requirements of this regulation you will violate.
- Regarding VAT, you should bear in mind that a possible registration may affect the taxation of sales, which you have not thought about and which I will not dwell on, but which you should ask your accountant about. You should also keep in mind that your status as a self-employed person does not in any way change your status as a person liable for VAT, i.e. all the requirements that apply to businesses apply to you. The last thing I’ll mention about VAT is that in cases where you work overseas, you will almost always need to be VAT registered too, which is a good idea to talk to your accountant about before starting such a business if you don’t want to start its activity with sanctions by the National Revenue Agency.
Taxation of artists as a commercial enterprise
If you decide to register a commercial enterprise, you can do it yourself or preferably with the assistance of a lawyer, this leads to the following:
- You are re-insured at least on the minimum insurance income, as in self-employment, but you make an annual equalization only on the remuneration received for personal work, not on the entire income from the activity, i.e. if you choose to take your money as a dividend rather than as remuneration for personal work, you do not pay additional insurances above the minimum.
- You tax your income according to the Corporate Income Tax Act – i.e. in general, from the real income, you subtract the real expenses and pay on them a 10% profit tax, and subsequently on the absorption of the profit and a 5% dividend tax. In case you have high expenses, above 40%, maybe this is not a bad option for you.
- You comply with the requirements of Ordinance H-18, which cannot be listed here.
- About VAT, you comply with all requirements, as well as self-insured. What these requirements are is too extensive a topic to comment on here.
As mentioned, everything listed so far is perhaps one-tenth of the facts and circumstances that must be taken into account when deciding in what form to exercise an activity. The smart approach is to consult with a trusted professional to help you make these decisions. We could guide you in this.