Tax and Social Security

 

Tax and Social Security

 

  1. Taxation

Corporate Income Tax

 

  • 10% flat corporate income tax for the overall profit from activities in Bulgaria and abroad for the local companies and only on the profit from activities in Bulgaria for foreign companies;
  • 0 % corporate income tax in regions with high unemployment.

Personal Income Tax

  • 10 % flat personal income tax for the overall income for local individual tax residents (residing more than 183 days per year in Bulgaria) and only for the income from Bulgaria for all non-residents.

Tax on Dividends and Liquidation Quotas Tax

  • 5 % tax on dividends and liquidation quota withheld at the source (0 % for EU companies).

VAT

  • 20 % in the general case.
  • 9 % in tourism;
  • 0 % on community supplies;
  • Exempt suppliesrelated to healthcare, social care, education, sport, culture, non-for-profit, religion, transfer of ownership and rights in rem in land and buildings (not newly constructed), financial and insurance services, gambling, post services and services for which tax refund has not been used;
  • Obligatory VAT registration when turnover of BGN 50,000 (EUR 25,565) is reached for a period of 12 months. Voluntary registration option.

Avoidance of Double Taxation treaties

  • Extensive network of Avoidance of Double Taxation Treaties – effective with 53 countries.

Tax Relief

Individuals

  • for children;
  • for young families for the interest rate for mortgage loans paid throughout the year;
  • for disabled;
  • for additional voluntary social security and life insurance;
  • for certain donations such as related to healthcare, social care, education, sport, disabled, Red Cross, etc.

 

Companies

  • Tax exempt are social costs for additional voluntary social security and life insurance of the personnel including management staff, food vouchers, transportation of the personnel;
  • Employment of unemployed and disabled;
  • for certain donations such as related to healthcare, social care, education, sport, disabled, Red Cross, etc.;
  • Transfer of tax loss over a period of 5 years;
  • Special investment schemes and special investment purpose companies are tax exempt.

Social Security

  • Minimum social security threshold for the different professions and activities starting from BGN 420 (EUR 215) monthly;
  • Maximum social security income on which social security is paid BGN 2,600 лв. (EUR 1,330) monthly;
  • Minimum salary BGN 420 (EUR 215) monthly.
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