How are “modern professions” regulated by Bulgarian legislation?

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This series of topical articles and current materials aims to address the practical and legal aspects related to the gradual entry of “modern professions” in the Bulgarian employment market. In line with the more general tendency of modern law to form a regulative framework and instruments for its practical application afterwards, i.e., after the actual emergence of regulated social relations, the same trend is observed with “modern professions”. Thus, with the progressive development of technology, the entry of blockchain technologies and social networks, unconventional new professions – independently carried out, on full responsibility of the provider, completely or partially within an online environment – are emerging in the state for the first time.

Although in a number of cases the law is seemingly formalistic and even lagging behind the modern social conjuncture, with regard to the “modern professions” the legal framework existing even before their entry into the country proves to be far-sightedly applicable (of course, with view to further development tendency).

What is the legal wording for “freelancer“?

Historically, the figure of these persons is far from new, insofar the legal framework for this type of employment dates back to the early years of this century. In general, contemporary Bulgarian law refers to “freelancers” as self-employed professionals.

The Personal Income Tax Act (PITA) non-exhaustively enlists the following as examples of ‘freelancers’: chartered accountants, consultants, auditors, lawyers, notaries, private bailiffs, juries, court and prosecutors’ office experts, licensed evaluators, industrial property agents, medical professionals, translators, architects, engineers, technical managers, cultural, educational, artistic and scientific workers and insurance agents.

As the enlisting above is far from exhaustive for all possible forms of self-employment, the PITA outlines the general features which, once encountered, lead to qualification of the person as a “self-employed professional” or, in the light of modern vocabulary, as a “freelancer“. Thus, from a tax perspective, a person is a “freelancer” if, cumulatively:

  • carries out professional activity on his/her own account; and
  • is not registered as a sole trader; and
  • is self-insured (for more details see our article on the insurance regime applicable for “freelancers” here).

A person “carries out professional activity on own account” where the activity is not carried out under an employment or civil agreement relations.

Registration as a sole trader (“sole trader”) is a consequence of a procedure for registration with the Commercial Register of local individuals who enter into commercial contracts and have their activities organized “in a commercial manner” (have a commercial enterprise). In such cases, it is particularly specific that a person can register only one sole trader company and cannot transfer the entity separately from the enterprise.

A self-employed professional is a person who deducts, pays and administers his/her own social security contributions (contrary to employees under employment agreements, whose contributions are deducted and paid by the employer).

Hence, according to the criteria above, freelancers are, for example: bloggers, vloggers, copywriters, influencers.

From all of the above, it can be concluded that the definition of modern professions is mainly derived from the tax legislation, which represents a significant weakness of the Bulgarian legal system, since these professions are beginning to occupy a large share of the labor market, and at the same time there is no detailed regulation regarding their existаnce, i.e. the fact that there is clarity on how a given income is taxed does not invariably lead to defining the place, role and essence of the relevant modern profession. The practice of similar phenomena shows that after their definition, it may turn out that their tax treatment is different, because of the different legal nature.

In the meantime, while we witness the lack of specific legal definitions and framework for current social phenomena, we can observe many texts of dead provisions in the laws, which are from a long time inapplicable or abandoned in practice.

Are “freelancers” subject to registration regime?

In short, yes, freelancers are subject to registration. Although the flexibility and mobility of freelancing is its core attractive feature, freelancing (legally) requires that freelancers are registered:

  • with the BULSTAT Register (with the Registry Agency); and
  • with the National Revenue Agency (NRA).

Both registrations – with the BULSTAT Register and with the NRA – should be completed within 7 days as of commencement of freelance activity.

Apart from this, before the freelancer starts to conduct of “patent activity”, the latter is also subject to registration with the respective competent local municipality (relevant to the place of carrying out the activity).

Insofar as the above registration procedures are accompanied by administrative procedural specifics related to the novelty of this particular market niche, you can reach out to our team for assistance so as to ensure efficient implementation un manner which guarantees quickly and legally compliant performance of such professional endeavours.

 

This series of informational materials aims to regularly inform readers – consumers and service providers – about the contemporary implementation matters related to the provision of services by freelancers, influencers, bloggers/vloggers, dropshippers, and others, as well as the main issues that users of such services face.

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