Annual Tax Returns in Bulgaria Explained: A Guide for Corporate Accounting

Taxation in Bulgaria. Brief Introduction.

Any company or partnership incorporated in Bulgaria, as well as permanent establishments of foreign legal entities, are subject to taxation in Bulgaria. Bulgarian residents and Bulgarian resident companies are taxed on their worldwide income, while non-residents and non-resident legal entities are only taxed on their Bulgarian source income.

Any company or partnership incorporated in Bulgaria, as well as permanent establishments of foreign legal entities, are subject to taxation in Bulgaria. Bulgarian residents and Bulgarian resident companies are taxed on their worldwide income, while non-residents and non-resident legal entities are only taxed on their Bulgarian source income.

Some of the most important types of companies subject to taxation in Bulgaria are:

• the joint stock company,
• limited liability company,
• sole trader,
• branch of a foreign company.

The main taxes to be paid in Bulgaria

The most important taxes to pay in Bulgaria are the following:

1. the income tax which is levied on the personal income of individuals and profits of companies;
2. the value added tax (VAT) which is the most important indirect tax in Bulgaria;
3. withholding taxes which are applied to dividends, interest and royalties payments;
4. the capital gains tax which is levied on various incomes obtained in Bulgaria
5. the real estate tax which applies on properties based on their value;
6. the inheritance and gift taxes which are applied to Bulgarian residents.

Tax returns

n general, taxpayers have to submit annual tax returns. Employees who work on the basis of an employment contract with a local employer are not obligated to submit tax returns if they have employment income only, the entire income has been taxed during the year via the employer’s monthly payroll withholding, and at 31 December of the tax year they have only one employer who makes an annual reconciliation of the due tax by 31 January of the following year. In all other cases, individuals, including those who receive income under employment contracts with non-resident employers, are obligated to file an annual tax return.

For tax purposes, spouses are treated as separate taxpayers. No income splitting is allowed. Income is declared in the year in which it is actually received, regardless of the year when it was earned and to which it relates.

The deadline for submission of tax returns is 30 April of the following year. A reduction of 5% of the outstanding income tax is applicable if the annual tax return is filed electronically by 31 March of the following year, the individual has no outstanding public liabilities, and the tax is paid by 31 March of the following year. The discount of 5% is capped at BGN 500.

Individuals are allowed to file a one-off corrective tax return without a penalty by 30 September of the following year. 

Corporate – Taxes on corporate income

Bulgarian tax residents are taxed on their worldwide income. Non-residents are taxed on their income from Bulgarian sources only, through a permanent establishment (PE) and/or via withholding tax (WHT), depending on the case (see the Branch income section).

In general, corporate income is subject to CIT at a flat rate of 10%.

Alternative tax

Income earned by organisers of gambling games for which the bet is included in the price of a phone or other telecommunication service is subject to 15% alternative tax, applied on the increase in the price of the phone or other telecommunication service (i.e. the difference between the regular price of the service and the new higher price due to the gambling game). A fixed-sum tax is applied to the operation of gaming machines.

Online gambling games are exempt from the alternative tax (and are subject to standard CIT instead), as are a significant part of the other land-based gambling games (i.e. totto; lotto sports betting, including horse and dog racing; and betting on random events or related to the knowledge of facts).

Tonnage tax regime

A special alternative tax regime applies to the operation of commercial maritime vessels, as per their net tonnage, at a rate of 10%.

Local income taxes

There are no provincial or local government corporate income taxes in Bulgaria.

Corporate – Group taxation

Last reviewed – 28 October 2025

No group consolidation is permitted for tax purposes in Bulgaria. All companies must pay tax on the basis of individually assessable profits and losses.

Payment of tax

If a company realized net revenue from sales of more than EUR 1.5 million in the year before the preceding year, it is liable for monthly CIT payments for each month in the current year. If the net sales revenue for the year before the preceding year is below EUR 1.5 million but above EUR 151,000, the company is liable for quarterly advance CIT payments for each quarter of the year except the fourth quarter. The amount of the monthly or quarterly CIT instalments is calculated based on the forecast taxable profit for the current year.

Companies established during the current or preceding year and companies with net revenue from sales below EUR 151,000 for the year before the preceding year are not required to pay advance CIT instalments.

The overpaid amount of CIT can be offset against advance and annual payments due for the next period. The overpaid amount may also be effectively claimed for refund by the taxpayer. The difference between the annual tax declared in the CIT return and the advance tax paid for the corresponding year must be paid by the deadline for submitting the tax return on 30 June of the following year.

Accounting Outsourcing – Common Reasons

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