Taxation in Bulgaria: A Guide for Businesses, Individuals, and Accounting Professionals

What this video covers: concise map of Bulgaria’s tax system, who must file, and why it matters for businesses and individuals. Why watch: immediate takeaways for accountants and business owners to reduce risk and stay compliant, Accounting Services in Bulgaria | Bookkeeping, accounting, payroll, taxes, tax reduce, accountancy

Corporate Taxation & Compliance for Businesses

Flat 10% Corporate Income Tax Rate: Under the Corporate Income Tax Act (CITA), Bulgaria imposes a competitive flat tax of 10% on worldwide taxable profits for resident companies. Non-resident dividend distributions generally incur a 5% withholding tax (WHT), while payments to parent entities within the EU/EEA are 0% WHT exempt, Taxes – Accounting Services in Bulgaria

Strict Transfer Pricing Rules: Domestic and cross-border transactions between related parties must strictly follow arm’s length principles. Companies must maintain compliant transfer pricing documentation to validate fair market pricing during tax audits conducted by the National Revenue Agency (NRA),Financial accounting – Accounting Services in Bulgaria

Annual Filings & Advance Installments: Businesses submit their annual tax declarations and settle final tax liabilities by June 30th. Entities exceeding statutory sales thresholds must also make regular monthly or quarterly corporate income tax advance payments throughout the tax year, Company incorporation in Bulgaria – Accounting Services in Bulgaria

Individual Income, Social Security & Residency

Flat 10% Personal Tax & Residency Standard: Tax residents are subject to a 10% flat Personal Income Tax (PIT) on their worldwide earnings, whereas non-residents are taxed only on Bulgarian-sourced income. Individuals attain tax residency by spending over 183 days within a 12-month period in Bulgaria or by proving their vital interests center there.

Capped Social Security Framework: Total mandatory social security and health contributions equal approximately 33.4% of gross monthly salary, split between the employer (~19.62%) and employee (~13.78%). Contributions are assessed up to the statutory maximum monthly insurance base, exempting any income above the cap from social security deductions.

Self-Employed & Freelancer Directives: Sole proprietors and independent professionals must register as self-insured persons with the NRA. They make advance monthly social contributions and file an annual tax return (ZDDFL) to make final tax adjustments by April 30th.

VAT Rules, Accounting Standards & Reporting

Mandatory VAT Threshold & SME Regimes: Mandatory registration under the Value Added Tax Act (VATA) is triggered when calendar-year taxable turnover hits €51,130 (or ~BGN 100,000). Applications must be filed within 7 days of crossing the limit, while eligible small businesses can utilize simplified EU SME schemes, Taxes – Accounting Services in Bulgaria

VAT Rates & VIES Intra-EU Reporting: Bulgaria charges a standard 20% VAT rate (with a reduced 9% rate for accommodation/hotel sectors). B2B service providers operating across borders in the EU must register under the VIES system to perform zero-rated intra-Community transactions, Financial accounting – Accounting Services in Bulgaria

Financial Reporting & Commercial Register: Accounting records must comply with Bulgarian National Accounting Standards (NAS) or IFRS. Entities are required to submit monthly VAT returns by the 14th of each month and deposit their audited annual financial statements with the Bulgarian Commercial Register, Annual closing – Accounting Services in Bulgaria

Accounting Outsourcing – Common Reasons

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Our promises & invitation for a partnership

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See you Friends, looking forward to contribute to your business growth & success, Accounting Services in Bulgaria | Bookkeeping, accounting, payroll, taxes, tax reduce, accountancy