How to Become a Tax Resident of Bulgaria — Guide (2026)

Why tax residency in Bulgaria?

Bulgaria offers some of the lowest tax rates in the European Union, making it an attractive destination for individuals seeking to optimize their tax burden while fully complying with the law.

• 10 % flat tax on personal income — no progressive scale, regardless of income level.
• 5 % dividend tax — final withholding tax.
• 70+ DTTs — double tax treaties with most developed economies, including Germany, the UK, France, the USA, Canada, Switzerland, and others.
• EU and eurozone membership — since 01.01.2026, Bulgaria is in the eurozone, ensuring full currency stability.
• Low cost of living — Bulgaria offers significantly lower living costs compared to Western Europe, while maintaining good quality of services.

Tax residency criteria

Under Art. 4 of the Personal Income Tax Act (PITA), a resident individual is any person who meets at least one of the following criteria:

1. The 183-day rule

A person who stays in Bulgaria for more than 183 days within any 12-month period is considered a tax resident of Bulgaria.

2. Center of vital interests

A person whose center of vital interests is in Bulgaria. The center is determined by a combination of factors:

• Family residence (spouse, children)
• Location of property (real estate, vehicles)
• Place of professional activity
• Bank accounts and financial assets
• Social and cultural ties

3. Permanent address

A person with a permanent address in Bulgaria may be considered a tax resident, unless the center of their vital interests is in another country. A permanent address alone is not a sufficient criterion if the person can prove residency in another country.

Procedure for obtaining a certificate

The tax residency certificate is issued by the National Revenue Agency (NRA) and serves as an official document to prove your tax status before foreign tax administrations and institutions.

1. Application filing — using an NRA template, at the territorial directorate of permanent address or electronically with a qualified electronic signature.
2. Review — the NRA verifies compliance with residency criteria.
3. Issuance — the certificate is issued within approximately 30 days of filing.
4. Validity period — the certificate is valid for one calendar year. Annual renewal is required.

The procedure is free of charge — no state fee is due.

Required documents

To file an application for a tax residency certificate, prepare the following documents:

• Application form from the NRA
• Identity document — copy of passport or ID card
• Proof of address — title deed, lease agreement, certificate of current address
• Proof of economic activity — employment contract, freelance activity, company management
• Property and income questionnaire — completed using an NRA template, containing information about assets, bank accounts, income, and family status

Additional NRA requirements

In recent years, the NRA has applied an increasingly strict approach when issuing tax residency certificates, especially for persons who were previously residents of another country:

• Deregistration certificate from a foreign municipality — the NRA may request a document certifying that the person has terminated their tax residency in the previous country (e.g., Abmeldung in Germany).
• Report from the Border Police General Directorate — on border crossings, to confirm the 183 days of stay.
• Evidence of actual residence — utility bills, medical check-ups, subscriptions, bank statements with transactions in Bulgaria.

Tax consequences of residency

Tax residency in Bulgaria leads to the following main consequences:

Worldwide income taxation

As a tax resident of Bulgaria, you are subject to taxation on your worldwide income — i.e., all income regardless of its source (Bulgarian or foreign).

Tax rates

Foreign tax credit under DTTs

If you receive income from a country with which Bulgaria has a DTT, the tax paid abroad is credited against the tax due in Bulgaria (up to the amount of Bulgarian tax). This prevents double taxation.

Example: If you receive royalties from Germany and Germany has withheld 15 % withholding tax, in Bulgaria you will owe only the difference (if the Bulgarian tax is higher) or nothing (if the foreign tax equals or exceeds 10 %).

Annual tax return

Every tax resident of Bulgaria is required to file an annual tax return under Art. 50 of the PITA if they have income other than employment income (or if they wish to claim tax reliefs).

• Filing deadline: from 1 March to 30 April of the year following the tax year.
• Filing method: electronically (with a qualified electronic signature or via the NRA's personal identification code) or on paper at an NRA office.
• Declaring foreign income: all income from abroad must be declared, including income for which tax has been withheld abroad.
• Annexes: Annex 1 (employment income), Annex 2 (freelance income), Annex 3 (rental income), Annex 8 (foreign income), etc.

When claiming tax reliefs (for children, mortgage, voluntary social insurance), you must attach the relevant evidence.

Changes in 2026

With the adoption of the euro on 1 January 2026, the following changes affect tax residents:

• Returns in euro — the annual tax return for 2026 (filed in 2027) will be in euro.
• No change in criteria — the criteria for determining tax residency (183 days, center of vital interests, permanent address) remain unchanged.
• No change in rates — the tax rates (10 % income, 5 % dividend) have not changed.
• DTTs — double tax treaties continue to apply without change.

The transition to the euro is primarily technical and does not affect substantive tax rules.

Frequently asked questions