Taxation

Bulgarian taxation is generally regulated by the following tax laws:

• Corporate Income Tax Act
• Income Tax on Natural Persons Act
• Local Taxes and Fees Act
• Valued Added Tax (VAT) Act
• Tax and Social Insurance Procedure Act

The conventions for the avoidance of double taxation are also an important element of the Bulgarian tax system.

• To find out about company tax in Bulgaria see AngloINFO INFOrmation page Corporate tax and VAT in Bulgaria

Personal Taxation

Personal taxation is determined by the Income Tax on Natural Persons Act and the Conventions for the avoidance of double taxation.

Taxable persons

Resident individuals: Are obliged to pay taxes on their incomes from sources both inside and outside of the Republic of Bulgaria. Residents are people who have a permanent address in Bulgaria or stay in Bulgaria for a period of at least 183 days in a twelve months period.

Non-resident individuals: Are obliged to pay taxes for their incomes from sources inside the Republic of Bulgaria. A person who does not have a permanent address in Bulgaria or does not stay in Bulgaria for a period over 183 days in a twelve months period is considered as non-resident.
Bulgarian law recognises the following types of income:

• Income from employment
• Income from working as a Sole proprietor
• Income from other economic activity
• Income of resident individuals from rent or from other payments received from providing a property for use
• Income of resident individuals from transfer of property rights
• Income from other sources
• Income taxable with final taxes

General Income Tax/Tax on the Aggregate Annual Taxable Amount

The aggregate annual taxable amount is determined by the sum of all the annual taxable amounts for all the incomes, acquired during the tax year, such as income from employment, income from other economic activity specified in the Income Tax on Natural Persons Act, income from rent, from transfer of rights of property and so on, without the incomes pointed in the law, which sum shall be reduced with the provided tax reliefs. And every annual taxable amount of these incomes is determined by specific rules under the provisions of the law.

The aggregate annual taxable amount is 10 percent.