Personal Income Taxes in Bulgaria

The Personal Income taxes in Bulgaria

Our services in the field of personal income tax include:

• Preparation of annual tax returns
• Annual tax payments to the Bulgarian tax authorities by 30 April
• Assistance in cases of tax audits by the NRA

The taxation of the income of natural persons is governed by the Act on Income Taxes of Natural Persons. They are divided into two categories – resident and non-resident individuals. Subject to taxation are all individuals as well as those who work as sole traders. Tax residents pursuant to the Act on Income Taxes of Natural Persons are those natural persons who have their permanent residence in Bulgaria (being for at least 183 days a year resident in Bulgaria) and whose center of activities is located in Bulgaria. According to Article 4, paragraph 5, any person who has a permanent address in Bulgaria but whose centre of vital interests is not situated in the country, shall not be considered a resident natural person. Tax residents owe taxes in respect of any income acquired thereby from sources inside and outside the Republic of Bulgaria, while non-residents are subject to taxation only in regard to their gains from Bulgarian sources.

Subject to taxation are all incomes, derived from employment relationships, from business activities, rent or dividends, from liquidation proceeds, from transfer of property activities, prices, remuneration, including from entrepreneurship contracts and other sources. The general tax rate is a 10% flat rate, whereas for the incomes of sole traders – 15% tax rate. Pursuant to Article 53 of the Act the annual tax return shall be submitted on or before the 30th day of April of the year next succeeding the year of acquisition of the income. Any person, who submits an annual tax return on or before the 10th day of February of the next succeeding year, shall enjoy a rate rebate of 5 per cent of the balance of tax due under the annual tax return where remitted on or before the same date.

A tax return must be filed by both nationals and foreign natural persons, if they have received within the past year taxable incomes in Bulgaria.