Last Updated on February 12, 2023 by Bulgarian attorney
Company Expenses in Bulgaria
Company expenses are ordinary and necessary costs a business incurs in order for it to operate. In this article you will find the most common misconceptions about company expenses in Bulgaria.
Long-term Assets v Company expenses
You have to make difference between long term asset and expense. A website built for 40,000 Euros will not be considered an expense. This will be considered a long-term asset. You can claim as company expense only a certain percentage annually of the value of the asset for prolonged period.
Same applies for property investments. If you buy a property to be used as your company office, you can claim only 4% of the value of the property annually as expense for the next 25 years. For example, if the value of the property is 100,000 Euros, you can claim 4,000 Euros annually as expense.
Business Trips v Lunches
Lunches, dinners, grocery, coffees etc. are not considered company expenses even if those are related to your daily business. They can be justified only when you are on business trips as part of your daily allowance. Different daily allowances apply for each country starting from 40 Euros daily. The 40 Euros daily will not cover all your personal expenses, but at least will cover some. You are not required to provide receipt of your daily expenses on the business trip.
To claim daily allowance, you need to be employed or self-employed in your Bulgarian company.
Flight Tickets, Hotels and Rental Cars
Flight tickets, hotels and rental cars will be considered a company expense only when these are paid from your company bank account and you provide an invoice.
How expenses should be recorded
You have to pay expenses via your company debit or credit card, or wire. Company expenses paid via personal cards will not be considered company expenses. Mere receipts will also not suffice. You have to provide an invoice for each company expense you make and should be paid via company card.
When expenses should be recorded
Your company expenses have to be accounted by 14th of each month for the expenses generated the previous month. This applies for VAT registered companies that need to prepare and file monthly VAT declaration.
NB If your expenses are not related to your business activities, you do not have an invoice or haven’t paid through your company accounts, those will be considered unapproved expenses.
Other company expenses in Bulgaria
- Expenses for materials
– spare parts for repair and maintenance of long-term assets
– utility bills – if you have a rental agreement or own the property
– car fuel
– work clothes
- Expenses for services
– courier services
– communication services i.e. phone bills
– custom fees
- Depreciation expenses
- Salary expenses and social contributions
- Tax expenses
Read related articles:
- Accounting Services in Bulgaria
- VAT services in Bulgaria
- Payroll services in Bulgaria
- Invoicing in Bulgaria
- Tax residency in Bulgaria