Bulgarian Accountant Taxation Services

As your Bulgarian accountant, one of the main services that you may wish to use at ViaActive are our taxation services in Bulgaria.

Taxes In Bulgaria

In Bulgaria, both companies and self-employed individuals are required to submit annual corporate income tax and personal income tax returns, and to pay the taxes due every calendar year.

For individuals working under employment contracts, their employer is obliged to pay personal income tax on employment contracts monthly.

VAT is paid on purchases and there are other taxes applied to other kinds of income including Capital Gains and Inheritances.

A summary of the key features of the main taxes in Bulgaria follows in this article.

Corporate Income Tax in Bulgaria

Setting up business in Bulgaria has many advantages, one of which is the low rate of corporation tax.

Corporate income tax is calculated based on business profits for the calendar year and must be filed and paid by March 31 of the following year. (Due to Covid – 19 the deadline was extended).

Profits are taxed at a fixed rate of 10%, with certain costs excluded from the calculation, including depreciation, entertainment, and travel costs. Capital allowances are allowed on certain qualifying assets.

Investment and interest income, as well as gains on disposals of assets, are included in this calculation. Summary of corporation taxes in Bulgaria:

- - Corporate Income Tax – 10% flat
  - Dividend Tax – 5%
  - Withholding Tax – 10%

Personal Income Tax and Social Security Payments in Bulgaria

Personal income is taxed at 10% of the gross income, after the deduction of employee’s social security contributions. This is determined by the Law of Budget and Social Security for the respective year. This takes into account the minimum wage for Bulgaria and the maximum monthly amount of insurance income.

Summary of income tax and social security payments in Bulgaria:

- - Personal Income Tax – 10% flat
  - The percentage of social and health insurance contributions are 13.78% for the employee and 18.92% for the employer.
  - The maximum Social Security income at the moment is BGN 3,000 per month (€1500)

VAT Payments in Bulgaria

Value Added Tax (VAT) is a consumption tax that is applied to nearly all goods and services that are bought and sold for use or consumption in the EU. The standard VAT rate in Bulgaria is 20%.

From 10.06.2020, with the adoption of an amendment to the Value Added Tax Act (VAT), the rate for value added tax (VAT) is reduced to 9% for hotels, restaurants, baby food and small children, baby diapers and baby hygiene items and books.

In most cases, you must pay VAT on all goods and services at all stages of the supply chain including the sale to the final consumer. This includes from the beginning to the end of a production process, e.g. buying components, transport, assembly, provisions, packaging, insurance and shipping to the final consumer.

VAT is charged and due in the EU country where the goods are consumed by the final consumer. VAT is charged on services at the time they are carried out in each EU country.

A business is obliged to register for VAT if the turnover in a calendar year exceeds approx. €25,000 (50,000 BGN), but may voluntarily register at any time.

VAT returns need to be submitted, along with payment, monthly by the 14th of the following month.

Capital Gains Tax In Bulgaria

This is due on any sale of assets and other items of a capital nature although there are many exemptions, including the sale of publicly-traded shares.

Products Subject To Excise Duties

The following products are known as excise goods:

- - - Alcohol/alcoholic drinks
    - Energy products and electricity
    - Tobacco products

Excise duties must be paid on them when they are produced or traded.

Accounting and Taxation Services in Bulgaria

Accounting company ViaActive, as your partner takes care of your business and finances, offering a wide range of accounting and tax services.

After a preliminary conversation with you and analysis of your company, ViaActive will prepare a custom made plan, which we will regularly discuss and work for the success of your business.