Bulgarian Personal Taxation

A flat rate of 10% on the taxable income.

Taxing residency

In general, individuals are considered Bulgarian taxing residents if:
* They have stayed in Bulgaria for more than 183 days in any 12-month period; or
* The centre of their vital interests is in Bulgaria (determined in view of their personal and economic ties to the country, e.g., factors like permanent address in Bulgaria, family, employment, possession of property, etc.)

Taxable income

Generally, the taxable income includes monetary income, as well as benefits received in-kind (except non-taxable items and “in kind social expenses”, see p. 6).
Bulgarian tax residents are taxed on their worldwide income, while non-residents are taxed only on their Bulgarian-sourced income.

Bulgarian Personal income tax rate

Exempt income

Certain types of income are exempt from taxation, including capital gains from the disposal of shares on a regulated Bulgarian / EU / EEA market, interest on deposits in EU/EEA based banks or branches of non-EU banks, income from disposal of certain real estate, etc.

Deductions

Tax deductions apply in some cases, including:
* Mandatory social security and health insurance contributions
* Statutory deductions for freelancers, for rental income, etc.
* Voluntary personal insurance up to certain limits
* Certain donations and other specific situations (disability, etc)

Lump-sum taxation

Applicable to certain sole proprietorships with annual turnover less than BGN 50 thousand (approximately EUR 25 thousand).

Bulgarian Personal income taxation

Tax returns and payment

The annual personal income taxation return has to be submitted by 30 April of the following year (the tax year coincides with the calendar year).
The tax has to be paid by the same deadline. A 5% reduction of the outstanding tax can be applied if:
* The annual tax return is filed and the tax is paid before 10 February of the following year; or
* The annual tax return is submitted electronically.
Individuals are not obliged to file annual tax returns if they have received only employment income for which an annual reconciliation of the tax liability was made by the employer (which was their only employer as at the end of the year), non-taxable income and/or income subject to one-off tax.
Personal

One-off taxation of certain income

One-off tax is due on income received by non-resident individuals from:
* Dividends and liquidation quotas distributed by a Bulgarian resident company
* Management and technical services fees
* Interest, royalties, franchising and factoring fees
* Income from the use of movable and immovable property
* Capital gains from disposal of real estate and financial assets
* Certain other income.
One-off tax is due on dividends and liquidation quotas distributed to a Bulgarian resident by a non-resident entity.
EU resident individuals may declare deductable expenses and claim a corresponding refund of the one-off tax paid on a gross basis under certain conditions.

One-off taxation

* 0% for capital gains from disposal of shares on a regulated Bulgarian / EU / EEA market by EU / EEA residents
* 5% for dividends and liquidation quotas
* 7% for income from voluntary life insurance received after the termination of the insurance policy (if older than 15 years)
* 10% for all other income
The one-off taxation may be reduced under an applicable tax treaty.

Mandatory insurance contributions

Between 30.7% - 31.4% paid by both the employer and the employee in a certain ratio. This includes:
* 12.8% - pensions fund
* 5% - universal pensions fund
* 0.4% - 1.1% - occupational accident and professional disease fund (rate depending on the field of activity)
* 3.5% - general illness and maternity fund
* 1% - unemployment fund
* 8% - health insurance fund

Insurance base

The gross remuneration less statutory deductions in some cases. The insurance base is capped at BGN 2000 (approximately EUR 1000) monthly.

Bulgarian Personal income taxation

Social security treaties

Foreigners may be exempt from social security contributions in Bulgaria or the contributions they make may be recognized in their home country under an applicable bilateral or multilateral social security agreement.