🇧🇬 Bulgaria Tax Guide — Income, Corporate & VAT Rates

The tax rates in Bulgaria range from 10% to 25% for personal income, with a corporate tax rate of 10% and a standard VAT rate of 20%.

Tax System Overview

Bulgaria has a territorial taxation system, where tax is levied on income earned within the country, regardless of the taxpayer's residence. However, residents are also subject to tax on their worldwide income, with foreign tax credits available to avoid double taxation. To be considered a tax resident in Bulgaria, an individual must have a permanent home in the country, or spend more than 183 days in a calendar year within the country's borders. The tax system is relatively straightforward, with a flat corporate tax rate and a progressive personal income tax system.

The Bulgarian tax authorities, known as the National Revenue Agency, are responsible for collecting taxes and enforcing tax laws. The agency provides various services, including online tax filing and payment, to make it easier for taxpayers to comply with their tax obligations. Bulgaria has also implemented various measures to prevent tax evasion and avoidance, including the introduction of a tax amnesty program and increased penalties for non-compliance.

Personal Income Tax

Corporate & Business Tax

• The corporate tax rate in Bulgaria is a flat 10%, making it one of the lowest in the European Union.
• Small businesses and start-ups may be eligible for tax incentives, such as reduced tax rates or exemptions from certain taxes.
• Bulgaria has several free zones, which offer tax exemptions and other benefits to companies that operate within these zones.
• Companies are required to register with the National Revenue Agency and obtain a tax identification number in order to operate in Bulgaria.
• Companies must also comply with VAT registration requirements, if their annual turnover exceeds a certain threshold.

VAT / Sales Tax

• The standard VAT rate in Bulgaria is 20%, with reduced rates of 7% and 9% applying to certain goods and services, such as food and hotel accommodations.
• Exemptions from VAT are available for certain goods and services, such as financial services and healthcare.
• A tourist refund scheme is available for non-EU tourists, allowing them to claim a refund of VAT paid on certain purchases.
• Businesses are required to charge and collect VAT on their sales, and remit the tax to the National Revenue Agency on a quarterly basis.

For Expats & Foreign Workers

• Expats and foreign workers are considered tax residents in Bulgaria if they spend more than 183 days in the country in a calendar year.
• Bulgaria has double taxation treaties with 68 countries, which can help to avoid double taxation and fiscal evasion.
• Expats and foreign workers may be eligible for tax credits for taxes paid in their home country, which can reduce their tax liability in Bulgaria.
• Expats and foreign workers are required to register with the National Revenue Agency and obtain a tax identification number in order to work in Bulgaria.
• Expats and foreign workers may also be required to pay social security contributions, which can provide access to certain benefits, such as healthcare and pensions.
• Remittance rules apply to expats and foreign workers, who are required to declare and pay tax on their worldwide income, including income earned outside of Bulgaria.

Crypto & Investment Income

• Investment income, such as dividends and interest, is subject to tax in Bulgaria, at a rate of 10%.
• Capital gains tax is also levied on the sale of assets, such as stocks and real estate, at a rate of 10%.
• Cryptocurrency is considered a financial asset in Bulgaria, and is subject to tax on any gains realized from its sale or exchange.
• Taxpayers are required to declare and pay tax on their investment income, including cryptocurrency gains, on their annual tax return.