Quick Summary: What Foreigners Must Know

Tax Type	Standard Rate	Applies to
Personal Income Tax	10% flat	Salary, freelance, business income
Corporate Tax	10% flat	Profits of Bulgarian-registered companies
Dividend Tax	5%	Distributions to individuals
VAT	20%	Goods & services (9% for tourism, books, etc.)
Social Insurance	~25%–30%	Applies to salaries and self-employed
Capital Gains	10% or exempt	Depends on asset type and residency

Frequently Asked Questions

Do I pay taxes in Bulgaria if I live here but earn abroad?

It depends on your tax residency.

If you are a Bulgarian tax resident (see FAQ #2), you are taxed on your worldwide income, even if your clients are abroad.

If you are a non-resident, only income sourced in Bulgaria is subject to taxation.

Common triggers for Bulgarian-source income:

• Bulgarian clients
• A company registered in Bulgaria
• Property or rental income in Bulgaria

How do I become a tax resident of Bulgaria?

You’re considered a Bulgarian tax resident if any of these apply:

• You spend more than 183 days in Bulgaria in a calendar year
• Your center of vital interests is in Bulgaria (e.g., family, business, property, bank, school)
• You have permanent residence status

Tip: Residency for immigration ≠ tax residency. You may hold a residence permit without being a tax resident — and vice versa.

I opened a company in Bulgaria. Do I pay personal tax too?

Yes — you pay corporate tax on profits, then personal tax on dividends if you withdraw money from the company.

Tax Layer	Rate	When It Applies
Corporate Tax	10%	On annual profit
Dividend Tax	5%	When distributing dividends

No double tax treaty with your home country? You may still be taxed again abroad — check with your accountant.

Do I have to pay social contributions as a company owner?

It depends:

Scenario	Social Insurance Applies?
You hire yourself on payroll	Yes
You take only dividends	No
You’re self-employed or ET	Yes
You have no salary, no dividend	No

Minimum social contributions (2025) are based on thresholds (e.g., ~BGN 933/month minimum base).

Some foreigners choose to invest in dividends solely to avoid contributing to the Bulgarian social security system legally.

How does income tax work in Bulgaria?

Income Type	Tax Rate	Notes
Employment income	10% flat	Plus employer/employee social contributions
Freelance or business income	10% flat	Accounted through the company or ET
Dividends	5%	Separate from income tax
Rental income	10% flat	Can deduct 10% expenses by default
Interest/capital gains	Usually 10%	Some exemptions for EU residents

Do I need to file a tax return as a foreigner?

Yes, if:

• You’re a tax resident of Bulgaria
• You own a Bulgarian company
• You earn local income (e.g., rent, consulting)
• You have freelance income or side gigs

Filing deadline: April 30 each year (for the previous year)

Company filing: Corporate tax return by March 31

Does Bulgaria have tax treaties to avoid double taxation?

Yes. Bulgaria has double taxation treaties with 70+ countries, including:

• All EU countries
• UK, Switzerland, USA, Canada, Australia, etc.

These treaties:

• Help avoid paying tax in both countries
• Define which country has the “right to tax” certain income
• Sometimes lower or eliminate withholding tax

Important: You may need to provide a Tax Residency Certificate from your home country.

I work remotely for a foreign company — do I pay tax in Bulgaria?

Yes, if you are a Bulgarian tax resident.

No, if you are not a tax resident and your income is earned for services rendered outside Bulgaria.

Remote work can still trigger local tax obligations — especially if your client pays to a Bulgarian bank or entity.

Is freelance income taxed differently?

If you operate through an EOOD (Ltd.), the company pays:

• 10% corporate tax on profit
• 5% dividend tax if you withdraw profit

If you’re self-employed (ET):

• 10% income tax
• ~30% social contributions

EOOD is usually more tax-efficient for foreigners and digital nomads.

Are there any tax incentives for foreigners or expats?

No. Bulgaria does not offer special expat tax regimes like Portugal or Italy.

But the flat 10% rate is already one of the lowest in Europe, and:

• No wealth tax
• No local income tax
• No church tax
• No progressive brackets

What is VAT, and when do I need to register?

VAT (Value Added Tax) in Bulgaria is:

• 20% standard rate
• 9% reduced rate for books, hotel accommodation, etc.

VAT Registration is required if:

• Your turnover exceeds BGN 100,000 (~€50,000)
• You trade cross-border in the EU
• You voluntarily want to reclaim VAT on expenses

Can I pay myself from my Bulgarian company while living abroad?

Yes, but you need to:

• Withhold 5% dividend tax when withdrawing profits
• File tax declarations in both Bulgaria and your home country if required
• Understand if your country taxes foreign-sourced dividends

Use a tax accountant familiar with international filings.

Hidden Insights: What Nobody Tells You

Insight	Why It Matters
Owning a company’s ≠ legal residence	You don’t automatically get the right to live/stay
You can run a company with zero employees	Take dividends only — no social tax burden
Property rental income is taxed locally	You must file even if you live abroad
Bulgaria does not offer “non-dom” status	No expat benefits like in the UK/Portugal
Bulgaria does not tax worldwide wealth	You can run a company with zero employees

You Will Also Like To Know About:

• How to Register a Company in Bulgaria
• Types of Companies in Bulgaria – Explained for Foreigners
• Annual Company Costs in Bulgaria
• Staying in Bulgaria – Visas & Residence for Founders and Freelancers

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, tax, or financial advice. While we strive to ensure accuracy and relevance, laws and administrative practices are subject to change. Always consult a qualified legal or tax advisor before making business or residency decisions in Bulgaria.