What Taxes Are Due in Bulgaria?

What taxes are due in Bulgaria: the basis of the fiscal system, taxation for individuals, obligatory payments of a legal entity, tax benefits, experts consulting.
Taxes in Bulgaria
The fiscal system in Bulgaria is one of the most efficient in the European Union. It combines fixed and graduated rates that contributes to the business development and attracts foreign investors.
Special aspects of the tax policy
Taxes shall be paid in Bulgaria by both the citizens of the country and the non-residents. The first shall make payments from all the incomes irrespective of the source. While the members of the second group shall pay interests on the funds earned within the country to the public purse.

The tax authorities do not cover all the foreigners, but only those who:

  • Have permanent address of residence within the country;
  • Do not leave the country during six months.

Here are some specific details of the fiscal system:

  • A long list of payments;
  • Complicated calculations
  • Sensitive policy for different categories of payers

It is quite difficult to deal with all payments on your own, therefore it is convenient and financially profitable to seek the help of consultants.
Individuals: list of mandatory deductions
All the payers are obliged to annually pay the income tax. The rate is clearly fixed and does not change during 11 years and it amounts to 10%. Deductions shall be made on almost of incomes:

  • income earned from individual entrepreneurial activities;
  • official salary;
  • dividends (the payment is reduced to 5%);
  • bank deposits;
  • royalty;
  • rental of real estate;
  • prize accruals, winnings, bonuses and so on.

Real estate tax in Bulgaria for Russians and other foreigners implies payments made for the amount earned as a result of sale or mutual exchange of an apartment/house. The rate shall be 10%, however, in case 1 item of real estate is sold, the payer shall have the right for benefits.

Such individuals shall also pay:

  • transport tax – it depends on the car power;
  • patent fee – this type of payment shall apply only to those who are involved into the private entrepreneurship.
The latter shall be divided into 3 equal parts and shall be allocated to the state in three transactions – in April, July and October.
Deductions to be made by a legal entity
The major fiscal liability of companies is the corporate tax that amounts to 10% of all incomes. The list of payments shall also include:

  • 8% - deductions from bank payments made to citizens;
  • 10% - payment to be made from interests paid to foreigners;
  • 5% - dividends;
  • 20% - VAT.
Real estate taxes in Bulgaria are calculated on a case to case basis and are within the range of 0.01% to 0.45%. If the owner constantly lives in the house or apartment registered to their name, then the supervisory bodies shall give a discount of 50% of the total amount. The real estate tax in Bulgaria can be reduced by 75%, but such a privilege is granted only to owners with disabilities.

In case of any questions pending, please contact our experts. They are available to give free consulting; moreover, they can assist you purchasing a shelf company put on the list with the legal entity to be re-registered. In addition, we can set up an offshore remotely and select most beneficial forms of incorporation.