In short: Pricing is how you set the price of a product or service so that it covers the full cost, leaves a profit and is competitive enough to sell.
Simply put: A good price has four jobs: it covers all costs (indirect ones too), leaves a profit for growth and a reserve, sells, and tells the truth about quality. Its parts are cost price + profit + VAT (if you are registered) + discounts and commissions. A price is tested in small steps, not set once and for all.
Example: Direct costs €0.80, share of indirect costs €0.40, desired profit €0.30 → price before VAT €1.50. With 20% VAT the customer pays €1.80, while your income stays €1.50.
Watch out: "the cheaper, the more customers" holds only up to a point. Below cost you lose on every sale. VAT is not your profit — you collect it and pass it on.
Across the EU, VAT follows common rules: the standard rate may not be lower than 15% (VAT Directive 2006/112/EC, Article 97); rates and registration thresholds are set nationally.
Example: Bulgaria — The standard VAT rate is 20% (VAT Act, Article 66). From 1 January 2026 registration is compulsory once annual turnover in the country exceeds €51,130 (Article 96(1)).
Check in your country — The VAT rates, the registration threshold and whether you must register. Ask your tax authority.
Source: Council Directive 2006/112/EC — https://eur-lex.europa.eu/eli/dir/2006/112/oj · NRA, "VAT registration" — https://nra.bg/wps/portal/nra/taxes/dds-v-balgariya/registratsiya-po-zdds (in Bulgarian)