taxation-in-bulgaria

Taxation in Bulgaria

Blog
A flat 10% profit tax. Benefits for companies, freelancers and individuals. A seamless process to tax residency.

The overall picture: Bulgaria is in the EU

Bulgaria is part of the European Union since January 1st, 2007. Bulgaria is not part of the Eurozone, nor is it part of the Schengen Area.

The currency is Bulgarian Lev (BGN) and it has been pegged to the Euro at a fixed rate of € 1 = BGN 1.95583 through a strictly managed  currency  board. Bulgaria has the second-lowest government debt in the EU and one of the lowest budget deficits. This makes Bulgaria one of the most stable countries in terms of doing business.

What exactly is the tax situation in Bulgaria?

Bulgaria is one of the countries with lowest tax rates in EU. Corporate income tax is fixed at the rate of 10% per annum, while capital gains tax is a flat 5%. Taxation on dividend payouts is 5%. What this translates to is that you pay less than 15% tax on your company income yearly.

VAT is set at 20% for purchase of goods and services. Tourism-related tax is only 9%. Due to these fixed flat tax rates, it is believed that Bulgaria’s tax regime is the most favourable for businesses in the entire European Union.

What is the process and how long does it take? 

Before you can become tax resident you have to apply for residency. The application process may take up to 14 days but often can be completed in less than 10 days. After you have received your residency card you need to wait six months before you can apply for tax residency. The application processes are pretty straight forward, however they could look a bit complex for new comers. We can assist you throughout the whole application, streamline the process and make your life easier!

The other good-to-know information is that once you become a tax resident, you do not need to permanently live in Bulgaria, if you are a EU citizen.

Do you wish to reduce your business
costs by more than 20% or more? Get in touch with us

BOOK A FREE 30 MIN. CALL

Notes:

  • Capital gains are profits that occur when an investment is sold at a higher price than the original purchase price.
  • Dividends are assets that are paid out of the profits of a corporation to the stockholders. They are considered income for the year, not capital gains.

Sources:
bulgariaresidency.com, countryeconomy.com, investopedia.com, wikipedia.org, homebusinessmag.com, tmf-group.com

Share this post

Get in touch

30 min. free call

Menu