Taxes in Bulgaria

Tax rates in Bulgaria in 2026: the short version

Bulgaria charges 10% income tax and 10% corporate tax, among the lowest rates in the European Union. When a company pays profit out to its owner, a 5% dividend tax is added, so the total burden on distributed profit is about 14.5%. What is expensive in Bulgaria is not tax but social contributions: together with the employer share they take about a third of a salary, but only up to a ceiling of $2,600 (€2,300) a month.

All amounts in 2026 are calculated and paid in euros: Bulgaria joined the eurozone on 1 January, and the lev was converted at the fixed rate of 1.95583 leva per euro. The full list of countries is in our taxes by country overview.

Compare taxes in 146 countries: relocation taxes 2026

Personal income tax

The rate is a flat 10%. Tax residents pay tax on their worldwide income, non-residents only on income from Bulgarian sources.

Bulgaria has no tax-free allowance: the 10% applies from the first euro. There are deductions, though. In 2026 a parent of a minor child reduces the annual tax base by $3,500 (€3,067.75), with two children by $6,900 (€6,135.50) and with three or more by $11,000 (€9,203.25). The relief can be taken monthly through the employer or in the annual return.

Mandatory social contributions are also deducted from the base, so the effective tax rate on a salary is below 10%. Income from rent, a liberal profession and one-off deals is taxed at the same rate, but with statutory expenses that need no receipts.

How much tax is taken from a salary in Bulgaria: a worked example

From a Bulgarian salary the employee contributions of 13.78% are deducted first, and then 10% tax is taken from the rest. About 77.6% of the gross amount reaches your account as long as the salary is below the contributions ceiling. From 1 August 2026 the ceiling rose from $2,400 (€2,111.64) to $2,600 (€2,300) a month, and anything above it is subject only to the 10% tax.

Worked example: an employee without children, with the minimum 0.4% workplace accident rate for the employer. The employee contributions break down as 6.58% for pension plus 2.2% to a universal pension fund, 3.2% for health insurance, 1.4% for sickness and maternity and 0.4% for unemployment. The minimum wage in 2026 is $700 (€620.20).

For comparison, in neighbouring Greece the same salary is taxed on a progressive scale of up to 44%, so for a high earner Bulgaria is one of the most tax-efficient countries in the European Union for employment.

What changed in 2026

On 1 January 2026 Bulgaria adopted the euro: taxes, fees and budget payments are now calculated and paid in euros. Rates did not change: a flat 10% income tax, 10% corporate tax and 20% value added tax. Lev savings and lev income were converted at the fixed rate with no tax consequences.

The thresholds changed along with the euro. Value added tax registration is now mandatory from $58,000 (€51,130) of turnover in a calendar year, the minimum wage is $700 (€620.20), and the maximum income for contributions rose to $2,600 (€2,300) a month from 1 August 2026. The child relief has been converted to euros and is $3,500 (€3,067.75) a year.

Bulgaria tax residency: how to get it and count the days

Bulgaria makes you resident with more than 183 days in any 12 months, and the days of entry and exit count as days in the country. You become resident for the year in which the stay passes 183 days. The second route is a permanent address or centre of vital interests in Bulgaria.

The rate is simple: 10% on worldwide income for a resident, while a non-resident pays only on Bulgarian income. The status is confirmed by a National Revenue Agency certificate.

Mistakes cost more: a flat in Varna with your family in it gives residency even if you felt like a guest. Murblz support removes these risks: we count days, check the address and ties, and obtain the certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

Talk to a manager now

How to become a Bulgarian tax resident

1. A basis to live there. Nationals from outside the European Union need a residence permit: for work, business, retirement or another ground.
2. Address. Register a permanent address in Bulgaria and move your centre of life there: family, home, main activity.
3. Days. Spend more than 183 days in the country within 12 months.
4. Certificate. Request a tax residence certificate from the National Revenue Agency.
5. Previous country. Exit tax residence where you lived before under its rules.

Resident and non-resident: the difference

Taxes for non-residents and withholding tax

A non-resident pays Bulgarian tax only on Bulgarian income, and most often the payer withholds it - the employer, company or bank. Withholding rates are low: 5% on dividends and 10% on interest, royalties, technical service fees, rent and directors' fees.

• Dividends. 5%, and 0% for European Union companies holding a stake under the parent-subsidiary rules.
• Interest and royalties. 10%, lower under a double tax treaty if the recipient provides a residence certificate.
• A non-resident's salary for work in Bulgaria. 10% as a final tax.
• Sale of Bulgarian property. 10% of the gain unless the seller qualifies for an exemption.

To apply a reduced treaty rate, the recipient gives the payer a tax residence certificate from their country, and for large payments files documents with the National Revenue Agency. Without them the full Bulgarian rate is withheld, and recovering the difference later is harder.

Taxes on investment income

The flat rate and exemptions for European exchange trades make Bulgaria one of the mildest European Union countries for private investors, but you must become a Bulgarian tax resident and close residence in your previous country.

Deductions, crypto and other income

• Deductions. The tax base can be reduced by deductions for children, donations and voluntary insurance within set limits.
• Crypto. Gains from selling digital assets are taxed as other income at 10%, so document trades and purchase cost.
• Foreign rent and interest. A resident reports them in the return; tax paid abroad is credited under the treaty with that country.

Property: buying, owning, selling

• Buying. A municipal transfer tax of 0.1% to 3% of the price, set by the municipality, plus notary and registration fees.
• Owning. An annual property tax of 0.01% to 0.45% of the tax valuation, plus a waste fee.
• Renting out. Income is taxed at 10%, with part of it deemed expenses without receipts.
• Selling. Income from selling one residential property a year is exempt if owned for more than 3 years; otherwise the gain is taxed at 10%.

A national from outside the European Union can buy a flat in their own name, but land only through a Bulgarian company: direct land ownership is restricted for such foreigners.

Inheritance and gifts

Spouses and direct relatives - children, parents, grandchildren - pay no inheritance tax. Siblings and their children pay 0.4% to 0.8% of the estate, other heirs 3.3% to 6.6%; the municipality sets the rate within these ranges. Similar rules apply to gifts.

The inheritance declaration is filed with the municipality within 6 months of the date the estate opens, and the tax is paid on the municipality's notice. If the estate includes property abroad or shares in foreign companies, the procedure also depends on that country's law, so we calculate such cases separately.

Taxes for companies

Bulgarian companies pay corporate tax on their worldwide income, foreign companies only on income from Bulgarian sources. Capital gains tax is included in the general corporate tax rate.

Value added tax

The standard rate is 20%. A reduced rate of 9% applies to certain goods and services.

Social contributions

• Employee - 13.78%: 6.58% for pension, 2.2% to a universal pension fund, 3.2% for health, 1.4% for sickness and maternity, 0.4% for unemployment.
• Employer - 18.92-19.62% on top of salary, depending on the workplace accident rate.
• Contributions are charged on income up to $2,600 (€2,300) a month.

VAT in Bulgaria: rates and the registration threshold

From 2026 the mandatory value added tax registration threshold is $58,000 (€51,130) of turnover in a calendar year, and you must register within 7 days of exceeding it. Previously the threshold was measured over any 12 consecutive months and the deadline ran to the 7th of the following month, so businesses now have less time to react.

Voluntary registration is possible below the threshold: it makes sense if your clients pay value added tax themselves and want to deduct it. For digital services and goods sold to private customers in other European Union countries the European Union-wide $11,300 (€10,000) annual threshold applies, after which value added tax is charged at the rate of the buyer's country.

Companies and entrepreneurs

Bulgarian corporate tax is 10%, and dividends to the owner are taxed a further 5%. Entrepreneurs and the self-employed pay 10% income tax and social contributions. Value added tax registration is mandatory above the set turnover threshold. The company files its annual corporate tax return by 30 June of the following year. Many foreign founders choose Bulgaria for a combined burden of about 14.5% on distributed profit.

The self-employed, freelancers and sole traders

A freelancer in Bulgaria can work in three forms, and the tax difference between them is significant. A liberal professional pays 10% on 75% of income, a sole trader 15% on profit, and a company 10% corporate tax plus 5% on dividends.

The self-employed pay their own contributions: 27.8% for pension, the universal pension fund and health, plus an optional 3.5% for sickness and maternity benefits. The base is chosen between the minimum of $700 (€620.20) and the maximum of $2,600 (€2,300) a month. Income tax is paid in quarterly advances and reconciled in the return due by 30 April.

For some small businesses - such as taxis, repairs or hairdressers - municipalities charge a fixed patent tax instead of income tax. For opening a company see company registration in Bulgaria, and for its bank account see business account in Bulgaria.

Example for a freelancer

Self-employed professionals such as programmers and consultants can deduct 25% of income as expenses without receipts. If you earned $56,000 (€50,000) in a year, taxable income is $42,000 (€37,500) and income tax $4,200 (€3,750), excluding social contributions.

Advance payments and local taxes

Entrepreneurs and the self-employed pay income tax in quarterly advances and reconcile in the annual return. Car owners pay an annual tax based on engine power and age, set by the municipality. Local property tax and the waste fee are paid twice a year, with a municipal discount for paying in full by the end of April.

Returns and deadlines

The annual income tax return is due by 30 April of the following year, together with any balance due. It can be filed online on the National Revenue Agency portal. Residents with foreign income must report it in the Bulgarian return and attach proof of tax paid abroad to credit it.

If tax is paid late, late-payment interest is charged at the Bulgarian National Bank base rate plus 10 percentage points a year. Failing to file or filing incorrect information brings a fine from the tax authority. An employee who had only one employer during the year and no other income does not have to file an annual return: the employer reconciles the tax.

Companies file the annual corporate tax return by 30 June, and value added tax payers file monthly returns by the 14th of the following month. Mistakes with these deadlines cost more than the taxes themselves, because interest and fines build up every month.

Double tax treaties

Bulgaria has many double tax treaties that decide where dividends, interest and pensions are taxed. In August 2023 Russia suspended the main provisions of its treaties with a number of countries, including European Union states, so Russia now withholds tax on payments abroad at its domestic rates. A Bulgarian residence certificate is needed for a foreign bank or company to withhold tax at the reduced treaty rate. More on moving: Bulgarian residence.

Bulgaria and its neighbours

Common mistakes

• Previous residence not closed. Two countries may then treat you as resident at once.
• Wrong day count. Arrival and departure days count as days in Bulgaria, and the 183-day threshold applies to any 12 months.
• Foreign income not declared. A resident must report it in the Bulgarian return.
• No residence certificate. Without it foreign banks and tax authorities will not apply treaty benefits.

What it means if you relocate

Bulgaria pays off for high earners who are ready to genuinely live in the country: the flat 10% and the contributions ceiling make it one of the cheapest European Union countries for tax. But the low rate only works once you are a Bulgarian resident and have closed your residency in the previous country.

• Who it suits. Specialists and freelancers earning over $3,400 (€3,000) a month, company owners who pay themselves dividends, and private investors trading on European Union exchanges, where capital gains are exempt.
• Who it does not suit. Those who spend less than half the year in the country and keep a home and family elsewhere: residency will not arise. Recipients of large income from countries with no treaty in force with Bulgaria: they risk being taxed twice.
• Where to start. Grounds for living in the country, an address, a residence certificate and a plan to leave your previous residency. Residence options are on the Bulgaria residence permit page, the route to a passport on Bulgarian citizenship by origin, and an overview of the country on Bulgaria.

How days are counted in different countries and what to do about dual residency is explained in our article on tax residency and the 183-day rule.

How we help

We calculate the tax burden before the move, help you become a Bulgarian tax resident and close residence in your previous country, obtain a tax residence certificate, prepare returns and structure ownership of business and investments. Write in the chat and a manager will calculate the cost.

For a freelancer we compare the three forms - liberal profession, sole trader and company - on your figures, taking contributions and the $2,600 (€2,300) monthly ceiling into account. We register the company and the value added tax payer when turnover approaches $58,000 (€51,130), obtain the tax residence certificate, file annual and quarterly returns and arrange reduced treaty rates so that a foreign bank or company does not withhold too much. A manager will calculate the cost of support in the chat.

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