Tax residence of Bulgaria
Have you considered becoming a tax resident of Bulgaria? Under the Bulgarian legislation you can claim Bulgarian tax residence if 1. You reside in Bulgaria 183 days annually or 2. You prove that the center of your vital interests is in Bulgaria.
Under point 1, you will be considered a tax resident of Bulgaria only in the year when you have resided in the country for 183 days. On the other hand, you are not required to satisfy the strict residence requirement if you justify that the center of your vital interests is in Bulgaria.
To determine the center of vital interests, the tax office will consider the location of your employment/ self-employment, business, the country where you pay social contributions, residence permits, properties, family, and others. Our dedicated and recommended by Legal500 team of Bulgarian tax lawyers will make sure that you are granted Bulgaria tax residency status hassle free.
Bulgarian residence and Bulgarian ID card for EU citizens.
To ease your tax residence application under point 2 (vital interests), we may assist you to obtain a residence permit and Bulgarian ID card for EU citizens. Our immigration lawyers will ensure that your Bulgarian residence card is issued within 3 working days.
Become a Bulgarian tax resident
The procedure of issuing a residence permit in Bulgaria for individuals, who are citizens of the European Union (EU) is governed by the Law on Entering, Residing and Leaving the Republic of Bulgaria of EU citizens and members of their families . According to this law:
Art. 6. (1): A European Union citizen shall reside in the Republic of Bulgaria with identity card or passport within a term of up to three months. Art. 7. (1): A European Union citizen may reside in the Republic of Bulgaria long-term or permanently, for which a certificate shall be issued by the “Migration” directorate in the Ministry of Interior Affairs, the Sofia Directorate of the Interior Affairs or the regional directorates of the Ministry of Interior Affairs or by officials authorised by the directors.
(2) The long-term residence is for a period of up to five years.
Our Bulgarian immigration lawyers will assist you to obtain a permanent residence for EU citizens after holding the long-term residence permit for five years.
Recent Development on getting Bulgarian tax residence
Due to some recent changes the most guaranteed way to prove vital interests is by way of buying a property in Bulgaria – this can be a small flat or office irrespective of the value of the property. On the other hand, if you will be physically residing in Bulgaria and conducting your business from Bulgaria, there is no need to buy a property at all.
Buying a Property in Bulgaria
Our real-estate lawyers will assist you to buy a property in Bulgaria. You may even buy the property remotely granting a power of attorney to our law firm. We will assist in the process of verifying the actual owner of the property, verifying that there are no legal impediments for the property conveyance, drawing up of the title deed and preliminary sale contract and all other related formalities. You may read more about how to buy a property in Bulgaria.
Alternatively, a foreign national may become a tax resident of Bulgaria by the way of obtaining Bulgarian citizenship by investment .
The National Revenue Agency certifies that a person is a resident of Bulgaria for tax purposes within the meaning of the Double Tax Convention and is subject to tax on his worldwide income in the Republic of Bulgaria.Become a tax resident of Bulgaria To check the requirements to obtain a Bulgarian ID card and Bulgaria Fiscal Residence, please do not hesitate to contact us.
Bulgaria Tax Residency
Becoming a Bulgaria Tax Resident, you can benefit from the lowest tax rates in the entire European Union. Bulgaria applies a worldwide income tax system and residents are taxable on their worldwide income. The corporate tax in Bulgaria is only 10% flat rate compared to
33.9%+ in Belgium, 33.3%+ in France and 25%+ in Austria. Bulgaria also levies the lowest flat personal income tax rate of 10%.
If you are a non-EU national who would like to immigrate to Bulgaria, you may consider the registration of a trade representative office in Bulgaria and obtain a Type D visa and Bulgarian residence permit.Bulgaria Fiscal Residence Application form
*EU nationals can reside in Bulgaria with a national ID card or passport for up to three months without registering in Bulgaria. If you would like to reside temporarily or permanently you have to register at the local Migration Police branch.
**The government authority responsible for the collection and administration of state taxes and obligatory social security contributions in Bulgaria is the National Revenue Agency.
Our dedicated team of professional accountants can help you to optimize your tax in Bulgaria.
Bulgaria Double Taxation treaties
Bulgaria has signed double taxation treaties with more than 60 countries in order to avoid double taxation for foreign investors. This measure offers tax relief for companies operating in multiple countries. Along with the double tax treaties, Bulgaria also signed exchange of information protocols in order to have a clear image of the legal entities requesting double taxation relief.
Bulgaria has signed double tax treaties with the below countries
The countries which concluded double taxation treaties with Bulgaria are: Albania, Algeria, Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Democratic People’s Republic of Korea, the Republic of Korea, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malta, Morocco, Qatar, Moldova, Mongolia, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Spain, Singapore, Slovakia, Slovenia, South Africa, Sweden, Switzerland, Syria, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Vietnam, Yugoslavia, Zimbabwe.
Brief overview of Taxation in Bulgaria
- Corporate Income Tax Rate – 10%.
- Capital Gains Tax Rate – 10%
- Capital gains derived from sale of shares through the Bulgarian Stock market or a regulated market in an EU/EEA member state – 0%
- Tax on Dividends – 5%
- Dividends paid to legal entities which are tax residents in an EU/EEA member state – 0%
- Interest and Royalties – 10%
- VAT – 20% * Refund period is 2 months under certain conditions. If your annual company turnover is less than EUR 25,000 VAT registration in Bulgaria is not mandatory
- Personal Income Tax – 10%
- Social contributions for 2022
payable by Employer: – 18.92%
payable by Employee: – 13.78%
- Maximum monthly taxable base – BGN 3,400 (approx. EUR 1740) from 1st April 2022
If you would like to obtain more details about Taxation in Bulgaria and becoming Bulgaria Tax Resident, please do not hesitate to contact us.