Taxes

1. Languages used by local tax authorities -> foreign documents must be translated (and legalized when required) in Bulgarian when provided to the Bulgarian National Revenue Agency. 

2. Corporate tax rate 10%. Deadlines: Tax return prepare & submit 1^st March – 30^th June next year. Deadline to pay 30^th June next year.

Under Bulgarian tax legal regime, individuals who are considered tax residents in Bulgaria are required to pay taxes on their income from all sources worldwide. On the other hand, non-residents are only subject to taxation on their income derived from Bulgarian sources, either through a permanent establishment or by means of withholding tax, depending on the specific circumstances. In the case of corporate entities, the general rule is that their corporate income is liable to corporate income tax at a flat rate of 10%.

3. VAT legislation updates.

Bulgaria cuts VAT registration threshold to BGN 100,000 (approx. EUR 85,000) from April 2025. From 1 April 2025, entities with taxable turnover meeting or exceeding BGN 100,000 over any 12-month period must register for VAT, as stipulated in the VAT Act. This new limit applies for both mandatory registration and deregistration process.

4. Specific tax regime for dividends. Dividends tax 5%. Withholding tax 10%. Deadlines: Tax return prepare & submit quarterly till 15^th month after the quarter. Deadline to pay end of the month after the month of declaration.

Under Bulgarian tax law, 5% withholding tax is due on payment of dividends and liquidation proceeds to local and foreign legal entities. The company shall be responsible for the withholding and payment of taxes, which shall be executed no later than the conclusion of the month subsequent to the calendar quarter in which the resolution for the distribution of dividends was passed or the liquidation proceeds were accrued.

Royalties, interest, technical services, rent, franchise fees, factoring fees, scholarships, and directors’ remuneration are subject to 10% withholding tax. Exemptions may apply for EU/EEA entities with respect to interest and royalties. Exemptions and relief available under applicable Double Taxation Treaties (DTTs).

5. Personal income tax rate 10%. Deadlines: Declare & pay monthly till 25^th next month. Annual recalculation, declare and pay the difference if any till 28^th February next year.

Resident individuals are taxed on their worldwide income, and non-residents on the Bulgarian source income. Taxable income includes income derived from employment, business activity as freelancer or other business activity, rent, capital gains, etc.  

Tax incentives and reliefs are available on personal contributions for voluntary insurance or retirement pension insurance, donations, for young families, for children and disabled individuals, in cases of electronic payments, etc.  

Deductions and allowances are available depending on the type of income, e.g. freelancers, farmers, agricultural products producers, etc.  The general personal income tax rate is set at 10%.