Bulgaria
Corporate taxes and other direct taxes
Bulgaria has a flat corporate income tax rate of 10%, which is applied to the annual tax profit. The tax profit may be reduced by tax losses carried forward within five subsequent financial years. Bulgaria applies thin capitalization rules to interest expenses from loans or leasing provided or guaranteed by related parties.
The financial results of collective investment schemes and enterprises with special purposes are not taxable through corporate income tax.
Advance tax payments should be made each month or quarter, based on the estimated tax profit for the current year.
Withholding tax rates are 5% for dividends and 10% for interests and royalties (double taxation treaties between Bulgaria and other countries can also be applied in order to decrease the withholding tax rate). There is no withholding tax if the dividends, interests, and royalties are paid in favor of a parent company registered in an EU Member State.
Local taxes are determined by each municipality within the ranges stated in the Law of Local Taxes and Fees. Local taxes and fees include:
- real estate tax: the tax rate is in the range of 0.1% to 4.5%. The base for taxation of non-residential real estates of companies is the higher of the book value or the value calculated by municipality tax valuation. The base for taxation of all residential real estate is the municipality’s tax valuation;
- transportation vehicle tax: determined as an exact amount, depending on vehicle type and power;
- gift tax: applied to gifts of all kinds, with very limited exemptions. Applies also to forgiven payables. There are two ranges of rates applicable: between 0.4% and 0.8% for gifts between siblings and their children; and between 3.3% and 6.6% for all other gifts;
- tax on the acquisition of property for a consideration: applies to real estate, vehicles, and limited real estate rights acquired for a consideration. The tax rate range is between 0.1% and 3% of the value of the property, or, in the case of exchange, the value of the more expensive property;
- inheritance tax: exempt to a limited extent (family members);
- patent tax: applied to micro enterprises or individuals whose activities are small services such as tailoring, very small stores, carpentry, etc. These are fixed amounts, determined by each municipality;
- a wide range of other fees (such as tourist tax; tax on the carriage of passengers by taxi; refuse collection fee) or other fees usually imposed for specific services, such as social services, technical and other services, renting of plots for sale at marketplaces, pavements, etc.
Level of attention paid by Tax Authority:
VAT and other indirect taxes
For 2024, the standard VAT rate is 20% and the reduced rate is 9%. The tax rate is 9% for:
1. Provision of accommodation services in hotels and similar facilities, including the provision of holiday accommodation and the rental of campsites or caravans, with a place to perform on the territory of the country;
2. Provision of books on physical or electronic media, or both (including textbooks, educational books and study sets, children's books with illustrations, for drawing or coloring, printed or handwritten music editions), and periodical printed works such as newspapers and magazines.
3. Provision of baby and small children's food, baby diapers and similar items for baby hygiene according to Appendix No. 4.
4. Until December 31, 2024, for deliveries with a place of performance on the territory of the country: restaurant and catering services.
5. Until June 30, 2024, the provision of the following with a place of performance within the territory of the country: provision of a general tourist service and supply of service for use of sports facilities.
Services exempt from VAT include financial and insurance services, transfer of buildings and certain parcels of land and rights related thereto, letting of real estate to individuals for housing, postal services and postage stamps, educational services, gambling, supplies, culture, religion, medical and social services, and supplies for which no tax credit was used.
VAT payers are required to submit monthly VAT returns, sales and purchase registers, VIES, and Intrastat returns.
Other indirect taxes include excise duties (on mineral oils, spirits, beer, wine, tobacco and tobacco products, natural gas, electricity, and solid fuels).
| VAT options in Bulgaria |
Applicable / limits |
| Distance selling |
approx. EUR 35,790/year |
| Call-off stock |
 |
| VAT group registration |
|
| Cash accounting - yearly amount in EUR (approx.)* |
approx. EUR 500,000/preceding 12 months |
| Import VAT deferment |
|
| Local reverse charge |
All types of waste (construction, household, production, hazardous); services related to waste processing; various types of agricultural production (seeds and grain). |
| Option for taxation |
| - letting of real estate |
 |
| - supply of used real estate |
|
| VAT registration threshold* |
Approx. EUR 51,130/last 12 months(till 12/31/2024)
Approx. EUR 84,875/last 12 months (from 01/01/2025) |
Personal income tax / Social security system
Personal income tax is applied at a flat rate of 10% on most of the income. The tax rate for dividends or liquidation shares paid in favor of a natural person is 5%.
The tax rate for amounts received from the expiry of life insurance, if its duration was more than 15 years, is 7%.
Income from employment and self-employment is subject to social security and health insurance contributions. In the case of employment, the employee’s contribution amounts to 13.78% (10.58% social security and 3.2% health insurance). For the employer, this contribution is 18.92% (14.12% and 4.8%, respectively). There are different contribution rates for specific positions involving higher risk (miners, pilots, workers in chemical and other harmful production facilities, etc.).
F or each position, a minimal base is determined for social and health contributions (mostly distributed by sectors of the economy). The maximum assessment base for social and health insurance contributions is BGN 3,750 (approx. EUR 1,918).
Wage related taxes
in Bulgaria |
Minimum wage
|
Average wage
in private sector |
| Exchange rate BGN/EUR |
in EUR |
in BGN |
in EUR |
in BGN |
| 1.96 |
477 |
933 |
1,029 |
2,012 |
| Total wage cost |
567 |
119% |
1,223 |
119% |
| Social security contribution - employer |
67 |
14% |
145 |
14% |
| Health insurance - employer |
23 |
5% |
49 |
5% |
| Gross salary |
477 |
100% |
1,029 |
100% |
| Employees' contributions |
66 |
14% |
142 |
14% |
| Calculated personal income tax after employees' contributions |
41 |
10% |
89 |
10% |
| Net salary |
370 |
78% |
798 |
78% |