Welcome to ASB Accounting Services Bulgaria – your trusted partner for accounting, tax, and business services in Bulgaria!
Thank you for watching! Don’t forget to like, subscribe, and hit the bell button for more tips on doing business in Bulgaria!
Bulgarian Company Paying Influencers or Content Creators Abroad: Tax Rules Explained (2025)
Working with influencers and content creators from other countries is now a standard part of digital marketing. Bulgarian companies increasingly collaborate with creators on YouTube, Instagram, TikTok, blogs, and affiliate platforms. While the marketing side is usually clear, the accounting and tax treatment often is not. This article explains, in a practical and precise way, how a Bulgarian company should handle payments to influencers who live abroad, what taxes apply, and what documentation is essential.
How Bulgarian tax law classifies influencer services
The first and most important step is to understand what type of service you are paying for. In most cases, influencer activities fall under advertising or marketing services. This includes sponsored posts, videos, stories, product reviews, affiliate campaigns, and brand promotion.
From a tax perspective, it does not matter whether the influencer is an individual or a registered company. The nature of the service remains the same. What matters is where the service provider is established and where the service is considered supplied under VAT rules.
When the influencer lives and operates outside Bulgaria, the service is treated as a cross-border service. This directly affects VAT and withholding tax obligations.
VAT treatment when paying foreign influencers
VAT rules for cross-border services are based on the “place of supply.” For marketing and advertising services provided to a Bulgarian company, the general rule applies.
If the influencer or content creator is established outside Bulgaria, the place of supply is usually the country where the service provider is established. This means Bulgarian VAT is not charged on the invoice.
In practice, the influencer issues an invoice without Bulgarian VAT. The Bulgarian company records the expense without VAT charged. In some cases, the reverse-charge mechanism may apply, mainly for services received from EU-based businesses. For services from non-EU influencers, VAT is usually not due in Bulgaria.
Correct VAT treatment depends on whether the provider is in the EU or outside the EU and whether they are registered for VAT. This is why checking the influencer’s status before payment is essential.
Withholding tax obligations in Bulgaria
Withholding tax is often the most misunderstood part of influencer payments. Bulgarian law provides for a 10% withholding tax on certain payments to foreign individuals and companies.
Marketing and advertising services may fall under this rule unless an exemption applies. The most common exemption comes from a Double Tax Treaty between Bulgaria and the influencer’s country of tax residence.
If such a treaty exists, the withholding tax rate may be reduced or eliminated. However, this is not automatic. The Bulgarian company must collect a valid tax residency certificate from the influencer. Without this document, the tax authorities may require the company to apply the standard 10% withholding tax.
Applying the wrong treatment can lead to additional tax assessments, interest, and penalties during a tax audit.
Required documentation for compliant payments
Proper documentation protects the company and proves that the expense is real, justified, and correctly taxed. Even small influencer collaborations should be supported by clear records.
| Document | Purpose |
|---|---|
| Invoice | Proof of the service and the amount paid |
| Contract or written agreement | Defines the scope of work and obligations |
| Tax residency certificate | Used to apply Double Tax Treaty relief |
| Proof of performance | Shows that the service was actually delivered |
Proof of performance can include links to posts, screenshots, analytics reports, or campaign summaries. These documents are especially important during tax inspections.
Common risks and mistakes to avoid
One frequent mistake is treating influencer payments as informal or personal expenses. Payments labeled as gifts or sent through personal accounts raise serious red flags.
Another risk is skipping withholding tax analysis entirely. Even if no tax is ultimately due, the decision must be documented and justified. Assuming that “no tax applies” without evidence is dangerous.
Finally, inconsistent documentation creates problems. Missing invoices or unclear agreements may lead tax authorities to reclassify expenses or deny deductions.
Why professional advice matters
Cross-border payments are closely monitored. Influencer marketing is no exception. Each collaboration should be reviewed individually, especially when countries, tax treaties, and VAT status differ.
A qualified accountant can confirm the correct VAT treatment, assess withholding tax exposure, and ensure that all documents meet Bulgarian legal requirements. This prevents costly corrections later and provides peace of mind.
When structured correctly, paying foreign influencers is fully legal, efficient, and safe for Bulgarian companies. The key is clarity, documentation, and informed decision-making.
ASB Accounting Services Bulgaria supports businesses that work with foreign influencers and content creators by providing clear tax guidance, correct VAT treatment, and full compliance with Bulgarian and international regulations. Before making payments abroad, rely on ASB Accounting Services Bulgaria to review your setup, reduce tax risks, and help you make informed, confident decisions.
This information is provided for general guidance only and does not constitute tax, accounting, or legal advice. Each situation requires individual review.