Tax highlights in Bulgaria - corporate and personal tax rates

Tax highlights in Bulgaria

Bulgaria offers one of the best taxation systems within EU. The country as a member of the European Union applies a worldwide income tax system and residents are taxable on their worldwide income. Bulgarian companies are subject to a flat tax rate of 10% and the taxable profit is the annual financial result adjusted for tax purposes. Bulgaria also offers a flat personal income tax rate of 10%.  Bulgaria’s taxation framework is exceptional from an EU and other non-EU onshore zones perspective.

Bulgaria doesn’t apply Foreign exchange control except for some reporting requirements. The currency of the country is Bulgarian Lev (BGN).

Bulgaria applies IFRS as a statutory accounting basis. Only certain entities are allowed to apply the national financial reporting standards for small and medium-sized enterprises.

Main business entities are the limited liability company, the joint stock company, sole trader and branch of a non-resident company.

Please find the tax highlights in Bulgaria :

Corporate profit tax

  • 10% withholding tax on interest, royalties, service expenses, capital gains and certain other income payable to non-resident entities and individuals
  • 5% withholding tax on dividends and liquidation quotas payable to non-EU entities and residents
  • 10% one-off tax on certain expenses deemed discretionary by the tax authorities
10%
Personal income tax

  • up to 29.7% mandatory insurance contributions on a capped base of BGN 2,000 per month
  • 10% one-off tax on interest, royalties, service fees, capital gains and certain other income payable to non-resident individuals
  • 5% one-off tax on dividends and liquidation quotas
10%
Value added tax

  • reduced rate of 7% for certain tourist services
  • 0% for exports and certain other activities
  • refund of input VAT within three months (regular term)
  • faster refund within one month if certain conditions are met
20%
Other tax, duties and fees

  • 0.01% – 0.25% annual real estate and property tax
  • 0.1% – 3% transfer tax for real estate and vehicles
  • tax and fees on vehicles, donations, inheritance, etc.
  • excise duties on energy, fuel, alcohol and tobacco
  • customs duties on imports of goods from outside the EU

You can find more about our company registration and bank account services here. 

Innovires lawyers could professionally assist you starting your activity in Bulgaria. We offer:

  • Company establishment;
  • Personal tax residency assistance;
  • VAT registration and accounting services;
  • Providing full legal and accounting assistance
  • Drafting/amending agreements with partners and clients;

Please, contact us for more information.

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