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Taxation in Bulgaria
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Taxation in Bulgaria

Corporate Tax

Standard rate: 10%

Resident companies are taxed on their worldwide income; non-resident companies pay tax only on Bulgarian-source income. Companies are generally treated as resident if they are registered under Bulgarian law. A flat rate of 10% applies. Profits distributed by resident companies to resident corporate shareholders are excluded from taxable income of the recipient company.

Individual Tax

Progressive rates up to 24%

Resident individuals are taxable on worldwide income; non-residents pay tax only on Bulgarian-source income. An individual is deemed to be resident if the individual’s centre of vital interests is in Bulgaria (which is strongly indicated by a permanent address in the country) or if the individual stays in Bulgaria for more than 183 days in any 365-day period.

Income tax rates rise progressively to a top rate of 24%. Dividends distributed to individual shareholders of Bulgarian companies are taxed at source at a flat rate of 7%.

Capital Gains Tax

Generally taxed as income

Capital gains are taxed as income. Gains on shares listed on the Bulgarian stock exchange are exempt, subject to meeting certain requirements.

Indirect Tax

Standard rate: 20%

Value-added tax (VAT) applies to most transactions. Exports and intra-community supplies are zero-rated. Exemptions include financial and insurance services, education and health services, land sales (that do not qualify as regulated land plots) and old buildings (with or without adjoining land).

Registration is compulsory for businesses with a taxable turnover of over BGN 50,000 in any previous period not exceeding 12 months. Registration is also compulsory for intra-community acquisitions exceeding BGN 20,000 for the year if the company/individual is not registered on other grounds. Registration may occur on a voluntary basis regardless of the turnover.

A non-resident company making supplies in Bulgaria must register for VAT through an accredited representative.

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