Bulgaria has the lowest tax rates in the whole of EU and by becoming a tax resident you can enjoy these low taxation rates. If you obtain tax residency, you will have to pay in Bulgaria a tax on your worldwide income. The personal income tax rate is set at a flat 10% as well and below you can see other rates:
Benefits of becoming a Bulgarian tax resident
- Corporate Income Tax Rate – 10%.
- Capital Gains Tax Rate – 10%
- Capital gains derived from sale of shares through the Bulgarian Stock market or a regulated market in an EU/EEA member state – 0%
- Tax on Dividends – 5%
- Dividends paid to legal entities which are tax residents in an EU/EEA member state – 0%
- Interest and Royalties – 10%
- VAT – 20% * Refund period is 2 months under certain conditions. If your annual company turnover is less than EUR 25,000 VAT registration in Bulgaria is not mandatory
- Personal Income Tax – 10%
- Social contributions for 2022
payable by Employer: – 18.92%
payable by Employee: – 13.78%
- Maximum monthly taxable base – BGN 3,400 (approx. EUR 1740) from 1st April 2022
Bulgaria has also double taxation treaties signed with more than 60 countries –
Albania, Algeria, Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Democratic People’s Republic of Korea, the Republic of Korea, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malta, Morocco, Qatar, Moldova, Mongolia, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Spain, Singapore, Slovakia, Slovenia, South Africa, Sweden, Switzerland, Syria, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Vietnam, Yugoslavia, Zimbabwe.
The tax resident certificate must be registered as well as the country, with which Bulgaria has signed a convention for avoidance of the double taxation. Every country has a separate application for a certificate for tax residents has to be submitted.
How to become a tax resident in Bulgaria
There are two ways you can claim Bulgarian tax residence if 1. You reside in Bulgaria 183 days annually or 2. You prove that the center of your vital interests is in Bulgaria.
As the first option is pretty much clear, the second option is more interesting and needs little more explanation. Proving that the central of your vital interests could be related to your family status, economical activity, self-employment, residence permits etc. Our tax experts could consult and assist you so you to become a tax resident in Bulgaria.
The most important requirement in order to establish a tax residency in Bulgaria is the residence of the person. For the purposes of the Income-Tax Act such as residence is the address in a place in Republic of Bulgaria, on which the citizen has registered. The information for the address is included in every ID document. One of the main steps in the process of becoming a tax resident in Bulgaria is to get a residency permit in Bulgaria. Here you can see further information about the long-term residence in Bulgaria. We will assist and accompany you to the Bulgarian Migration agency and guide you through the whole process.
The procedure for obtaining a tax residency certificate in Bulgaria usually last between 7 and 14 business days. There is a chance, if Bulgarian authorities ask for additional information, the process to take longer. Here comes our role helping you to become a tax resident in Bulgaria. Legalla’s team has the necessary knowledge and experience in relation to the issuance of a tax residency certificate in Bulgaria. You can contact us or ask us some other questions 🙂