Home / 🇧🇬 Bulgaria
Bulgaria, situated on the Balkan Peninsula in Southeast Europe, has a strategic geographic position as a bridge between Europe and Asia. Bulgaria is part of the European Union since 2007, has well-developed macroeconomic policies and is one of the most financially stable economies in the Central and Eastern region of Europe.
In recent years, Bulgaria has been an increasingly attractive destination for outsourcing of businesses in a number of sectors, such as the pharmaceutical sector and the IT and communications sectors. The workforce in Bulgaria is well-educated, while the cost of labour in the country is relatively low. The country has a low corporate income tax (CIT) rate of 10%.
Highlights
Residency Programs (2)
Cost of Life
Taxation overview
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Tax system
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Residence-based taxation
Countries with a residence-based taxation levy tax from your worldwide income for as long as you're a tax resident of that country. This is the most common taxation system.
Tax residence definition varies from country to country. General rule is you're a tax resident of a country if you spend 183 days or more in it in a year.
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Tax summary
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Personal income tax (PIT)
10%
Corporate income tax (CIT)
10%
Value-added tax (VAT)
20%
Social security contributions
National insurance contributions: 19.62% paid by employer and 13.78% paid by employee. Minimum amount to pay by individuals varies between BGN 650 ($396) and BGN 1,763 ($1,073) and maximum is capped at BGN 3,000 ($1,826).
Withholding tax (WHT)
- Resident WHT rates: 0% on Dividends, 10% on Interests and Royalties (0% if paid to associated EU company)
- Non-resident WHT rates: 5% on Dividends, 10% on Interests and Royalties
Capital gains tax (CGT)
- As Corporation: subject to standard Corporate income tax (CIT) rate
- As Individual: 10%
Net wealth/worth tax
Not taxable
Inheritance and Gift tax
- Inheritance: Varies depending on category of the heir and the amount of the inheritance.
- Gifts: Donation tax due to the local municipalities in the range of 3.3% to 6.6%.
Controlled foreign companies (CFCs)
- Controlled by Corporation: Yes. Undistributed profits of low-taxed foreign subsidiaries (and PEs) shall be included in the tax base of the Bulgarian controlling entity, subject to 10% Bulgarian CIT. Certain exemptions apply, including that profits of CFCs with substantive economic activity will not be taxed in Bulgaria.
- Controlled by Individual: Not provided
Disclaimer: This tax summary is for information only and shall not be construed as tax advice. Every situation is different. Should you consider moving to Bulgaria, we highly recommend you liaise with a local tax advisor to confirm your future tax regime.
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Year of Assessment
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YA 2021