Dealing with tax in Bulgaria while overseas can be tricky and pose complications that would demand expert guidance. Bulgaria has competitive rates for both personal and corporate taxation – among the attractions drawing foreign investment into the country. However, there are still challenges and pitfalls. With more than 20 years of experience in Global Expansion services, Bradford Jacobs ensures our clients comply with every variation of tax laws across the globe. Our ‘know-how’ is vital for international companies expanding into Bulgaria.

Bradford Jacobs’ dedicated specialists remove the burdens of worrying about tax complications while you focus on building your business in a new territory. From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists will guide you in every way.

Overview of Tax in Bulgaria

Personal Income Tax (PIT)

A flat rate of 10% applies to all employment remuneration, including salaries, bonuses and benefits in kind.

Social Insurance Taxes

Employers’ contribution to the social security and health insurance funds is between 18.92%-19.62%, with 13.78% withheld and remitted from employees’ salaries.

Corporate Income (Tax)

Resident companies are taxed on their worldwide income at a flat rate of 10%.

Withholding Tax (WHT)

A rate of 5% applies to dividends paid to non-EU tax-resident companies. Interest and royalties paid to non-resident entities or individuals are subject to 10%.

Value Added Tax (VAT)

Apart from the headline rate of 20% on goods and services, a rate of 9% applies to some services in tourism.

Payroll Tax

Employers withhold 10% of employees’ salaries, bonuses and any fringe benefits for remittance to the tax and social insurance authorities.

Personal Income Tax in Bulgaria

The tax year is the calendar year. Married couples must file returns independently. A flat rate of 10% applies to Personal Income Tax (PIT), with returns and any due taxes paid by April 30 of the year following the tax year. Taxable income includes all employment remuneration, bonuses and any fringe benefits. Single or married employees whose tax liability is handled entirely by their employer’s payroll system do not need to file returns unless they have income extra to their salary.

Whether or not employees are Bulgarian citizens, they are considered tax residents if they have a permanent Bulgarian address; reside in the country for 183 days in any 12-month period, or work abroad for a Bulgarian company or the state. Tax residents are liable for their worldwide income.

Individual Tax Rules in Bulgaria

  • The tax year is from January 1 until December 31, without exception.
  • Married couples file separate returns.
  • Employees do not have to file a return if their entire remuneration is taxed at source and remitted from their employer’s payroll system.
  • Employees with additional income to payroll must file by April 30 of the following year, and due tax must be paid by the same date.
  • Employees’ taxable income includes fringe benefits from the employer and bonuses and salary.
  • Individuals have deemed tax residents if they have a permanent address in Bulgaria, reside in the country for 183 days in any 12 months, or work abroad for a Bulgarian company or the state. This is regardless of citizenship.
  • Tax residents are liable for their worldwide income.
  • Personal income is taxed at 10% and withheld and remitted to the National Revenue Agency (NRA) by the employer from their payroll.
  • Freelancers are also taxed at 10%.

Employer's Social Insurance and Statutory Contributions in Bulgaria

Employers in Bulgaria are legally required to contribute to the national insurance system via the social security and health insurance funds, by remitting a percentage of employees’ payroll to the National Social Security Institute (NSSI).

Social Security: 14.12% to 14.82%

Health Insurance: 4.8%

Total contribution: 18.92% to 19.62%


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