Taxes in Bulgaria

Updated on 9 February 2024

Every year, by 30 April, certain people who receive income in Bulgaria, regardless of their citizenship, are obliged to file an annual tax declaration and pay taxes.  For example, by 30 April 2024 a tax declaration must be filed for income received in 2023.

Whether you have to file a tax declaration depends on where you work and what type of contract you have – labour, civil contract or other. In this article, we will present some examples of when you, as a working person, will need to file a tax declaration and pay taxes. This article is not exhaustive and does NOT INCLUDE information about taxes that companies have to pay or such related to income from rents or taxes paid for real estate, cars etc.

Important! Whether you will declare only income earned in Bulgaria or also income earned abroad depends on whether you are a "resident" according to Bulgarian legislation. You are considered a resident, regardless of your nationality, if:

• You have a permanent address in Bulgaria, or

• You are residing in Bulgaria for more than 183 days in any 12-month period (a period of stay in Bulgaria solely for the purpose of study or medical treatment is not considered to be residence in Bulgaria), or

• You have been sent abroad by the Bulgarian State, its authorities and/or organisations, Bulgarian enterprises and your family members, or

• The centre of your vital interests is located in Bulgaria.  To determine this it is taken into account whether you have family, property, employment or business in Bulgaria.

You should note that even if you have a permanent address in Bulgaria but the centre of your vital interests is not located in the country, then you are not considered a resident. 

Also, where a tax treaty or other international agreement between Bulgaria and another country contains a different definition of a "resident", the definition in the relevant tax treaty or agreement applies.

If you fall within the definition of a tax resident, then you must declare income earned both in Bulgaria and abroad and pay tax on it. If you qualify as a "foreign person" then in Bulgaria you only declare income earned from a source in Bulgaria. 

We advise persons with temporary protection in Bulgaria to obtain information from the competent tax authorities in Ukraine as to whether they are tax residents in Ukraine and what their tax status is there.

If you work only on a labour contract

If you receive income only from a labour contract and you do not want to claim tax reduction (see more information bellow), you do not have the legal obligation to file an annual tax declaration. In this case, your employer deducts tax from your salary each month.

If you work on both a labour and a civil contract or only on a civil contract

In these cases, you have a legal obligation to file an annual tax declaration by 30 April every year.

If you are a freelancer

Freelancers are, for example, accountants, consultants, lawyers, notaries, medical professionals, translators, architects, cultural, educational, artistic and scientific workers, insurance agents, etc.

As a freelancer, you are self-employed and therefore, you are personally responsible for declaring and paying your social insurance contributions and taxes. With regards to taxes, you have the following legal obligations:

1. To submit a tax declaration every 3 months called “Declaration under Article 55 of the Law on Income Taxes of Natural Persons and make tax payments in advance. The deadlines for this are by 30 April, 31 July and 31 October each year.  For the last 3 months of the year, the declaration of income for tax purposes is done with the annual tax declaration.

A template of the declaration can be found at this link.

Declaration under Article 55 can only be filed online using a personal identification code (PIC)  or a qualified electronic signature (QES).

For more information on how to issue a PIC or QES go here:

How to get a personal identification code (PIC)

How can I get an electronic signature?

2. To submit an annual tax declaration and pay your taxes from 10 January to 30 April each year, following the year you received your income (e.g for 2023 you will file your declaration until 30 April 2024). This declaration is called Declaration under Article 50 of the Law on Income Taxes of Natural Persons. See more information in the section “How and where do I file my annual tax declaration?” down below.

When you submit your annual tax declaration, the amount of social security contributions and taxes you owe are adjusted based on the taxable income you earned in the previous year. This means that any discrepancies or changes in your income are taken into account, and the amount of tax you owe is recalculated accordingly. This helps ensure that you are paying the correct amount of taxes based on your actual income.

Depending on what activity you carry out as a freelancer, you have legally recognized expenses. These expenses are deducted from your income when calculating how much taxes you have to pay, therefore, you pay less taxes.   In general, the legally recognized expenses are 25% of the income you earn monthly. For some professions, such as journalists, science, culture or education workers or lawyers, the percentage is higher - 40%.

How much taxes do I need to pay?

 In Bulgaria, the tax rate is generally 10% of the tax base for the income you earned in the previous year.

The tax base is the amount on which you are liable to pay tax. It is formed by deducting your legally recognized expenses (LREs) from your total income.  You must then deduct the social security contributions you have paid from the amount you have received. This gives you the tax base, from which you can calculate how much 10% is and this will be the tax you have to pay

Tax base = [(total income - LREs) - social contributions paid]

Taxes that you need to pay = Tax base x 10%

How and where do I file my annual tax declaration?

Tax declarations can be filed:

• Electronically (online) with an electronic signature (QES) or personal identification code (PIC) through the National Revenue Agency’s e-services portal. For more information how to issue a PIC or QES go here:

How to get a personal identification code (PIC)

How can I get an electronic signature?

If you are a freelancer, you must file your tax declaration online.

The advantage of filing your declaration online is that between 1 March and 30 April, a pre-filled tax declaration for your previous year's income will be available in the National Revenue Agency’s (NRA) system and you won't have to fill it in yourself. All you have to do is check if the auto-filled details are correct.

By 28 February each year, employers are obliged to submit declarations to the NRA on the salaries paid by them from where the NRA takes the information for the pre-filled tax declaration.

• On paper via the Bulgarian post offices. On the envelope, you need to indicate the address of the territorial office of the National Revenue Agency responsible for your declaration in accordance with the address you are registered on.
• On paper at the territorial offices of the National Revenue Agency in accordance with the address where you are registered.
• Through specific post stations. A list of post offices where tax declarations are accepted in 2024 can be found at this link.

If you are filing you declaration on paper, you must download, print and complete all required attachments and statements in advance. You can download the forms at this link.

 All forms are only available and have to be submitted in Bulgarian.

At the end of the declaration, there are detailed instructions. Read them before you start filling in.

On your annual tax declaration, you should also declare the rental income you received in the previous year, if any.

There are no fees for submitting a tax declaration, and the service is free.

Discounts

If you file your annual tax declaration and pay your taxes before March 31, you can take advantage of a 5% early online submission and payment discount.

Tax reductions

There are cases where you can benefit from a tax reduction and pay less tax. For example, if you have made donations during the year, if you have children under 18, for young families paying mortgage etc. In this article, we will focus only on tax reductions related to having children under 18.

Children

In order to qualify for such tax reduction you must be:

• A tax resident (see definition at top of article)

• Foreign individuals established for tax purposes in a Member State of the European Union or in another State that is a party to the Agreement on the European Economic Area.

To take advantage of a tax reduction for children under 18 you have to attach to your annual tax declaration one of these declarations:

• Declaration for tax relief for children. A sample of this declaration can be found at this link.
• Declaration for tax relief for children with disabilities. A sample declaration can be found at this link.

Tax reduction is available up to the amount of taxes you owe. This reduction can only be claimed by one parent for the respective tax year, and not by both parents at the same time. Only where the amount of tax reduction is higher than the sum of actual taxes you need to pay, the difference can be claimed by the other parent by filing an annual tax declaration.

The child for whom you will claim the tax relief must, by 31 December of the tax year:

1. be a local resident of a Member State of the European Union or of a country of the European Economic Area.
2. be under 18 years of age
3. be not placed in a social or integrated health and social service for residential care at the full expense of the state.
4. If your child has a disability, you should have a valid disability decision from the Territorial Expert Medical Committee (TELC). Reduction is also available for the year in which the type and degree of disability were established and for the year of the expiry of the decision.

PROCEDURE FOR ESTABLISHING A DISABILITY

To qualify for this reduction by 31 December of the tax year, you as a caregiver must:

1. Be a local resident, sole trader or person established for tax purposes in a Member State of the European Union or in a country of the European Economic Area
2. Not be deprived of parental rights and your child has not been placed outside the family and custody or guardianship has not been established;
3. Not be the parent who is not granted custody in divorce cases; or
4. Be the guardian or custodian of the child; etc.

Attach to your annual tax declaration copies of official documents proving the conditions for the tax reduction for children, as well as their translation into Bulgarian by a certified translation.

Additional information

This article is not exhaustive. If further assistance with regards to taxes in Bulgaria is required, consult an accountant.

Further information on the tax and social security requirements can also be found on the NRA website www.nap.bg and via the NRA phone numbers: 02/9859 6801 or 0 700 18 700 at a price according to the tariffs of the operator you use. 

For additional information for citizens of Ukraine, go here:

Taxes of Ukrainian citizens in Ukraine