Taxation in Bulgaria

Value Added Tax

1.1.The tax rate is 20 percent for:
– taxable supplies, unless expressly specified as being subject to a zero-tax rate
– import of goods on the Bulgarian territory
– taxable intra-Community acquisitions
1.2.The tax rate applicable to accommodation provided at hotels and similar establishments, including providing vacation accommodation and letting out places for camping sites and caravan sites, is 9 percent (9%).
1.3.The tax rate is 0 percent (0%) in the cases provided for by the VAT Act – Chapter III of the VAT Act.

1.4.. Exempt supplies:
– Supply linked to health care;
– Supply linked to welfare and social security work;
– Supply linked to education, sports or physical education;
– Supply linked to culture;
– Supply linked to religious denominations;
– Supply of a non-profit-making nature;
– Supply linked to land and buildings;
– Supply of financial services;
– Supply linked to insurance services;
– Gambling;
– Supply of postage stamps and postal services;
– Supply of goods or services for which credit for input tax has not been used

Minimum social security income

– minimum monthly social security income of self-employed according to their 2012 taxable income as self-employed:
– up to BGN 5,400.00 – BGN 420.00;
– from BGN 5,400.01 to BGN 6,500.00 – BGN 450.00;
– from 6,500.01 to BGN 7,500.00 – BGN 500.00;
– over BGN 7,500.00 – BGN 550.00;
– minimum monthly social security income of registered agricultural producers and tobacco producers – BGN 240.00;
– the minimum social security income of individuals employed under employment contracts is fixed as per groups of professions and according to the Classification of Economic Activities (CEA) (2008).
The income for which social security contributions must be paid includes all remunerations and other earnings from employment; the social security income also includes the gross monthly remunerations accrued but not paid.
The minimum salary for the country for 2014 is BGN 340.00.

Maximum monthly social security income

– maximum monthly social security income – BGN 2400.00;

Corporate Income Tax Act

The corporate tax rate is 10 percent (10%).
The corporate tax period is the calendar year.
For newly incorporated companies, which are taxable persons, the tax period commences on the date of incorporation and ends at the end of the year.

Tax rates for income earned from dividends and liquidation dividends and non-resident income tax withheld

– A tax of 5 percent (5%) withheld at source is charged on dividends and liquidation dividends allocated by resident legal entities;
– Income of a non-resident entity from a source in Bulgaria /as provided for by Article 12 (2.3), (2.5) and (2.8) of the Corporate Income Tax Act/ not earned through a place of business in Bulgaria is subject to a tax of 10 percent (10%) withheld at source, which shall be final.

On the annual base the following costs are subject to a 10% tax:

– Representation costs;
– Social costs, in-kind;
– Social costs for contributions /premiums/ for additional social security and life insurance;
– Social costs for food coupons in the cases provided for by the law;
– Costs related to maintenance, repairs and use of vehicles when used for administration purposes;

Individual Income Tax Act

Tax rates
– Uniform individual income tax rate of 10 percent (10%);
– Uniform sole proprietorship income tax rate: 15 percent (15%);

Tax rates of final tax:
– 5 percent (5%);
– 10 percent (10%);
– 7 percent (7%);

Accounting Services Bulgaria