Taxes and double taxation

Where you pay tax depends on which country you are tax resident in, not on your citizenship. A Bulgarian tax resident is taxed in Bulgaria on worldwide income. If you are not resident, Bulgaria taxes only your Bulgarian-source income — rent or the sale of a property here, for example. When two countries claim the same income, the double taxation treaty between them decides.

tax

10%

flat rate

presence

183 days

in any 12 months

treaties

70

covering 71 countries

certificate

7 days

of residence from the NRA

When you are a Bulgarian tax resident

Under Art. 4 of the Personal Income Tax Act, a resident, regardless of citizenship, is a person who:

• has a permanent address in Bulgaria;
• stays in Bulgaria for more than 183 days in any 12-month period;
• has been posted abroad by the Bulgarian state or a Bulgarian company (and their family members);
• has their centre of vital interests in Bulgaria — family, property, place of work or business, the place from which they manage their property.

Art. 4(5) adds an important exception: a person with a permanent address in Bulgaria is not resident if their centre of vital interests is not in Bulgaria. When counting the 183 days, the day of arrival and the day of departure each count, and time spent in Bulgaria only for study or medical treatment does not.

If you are a Bulgarian tax resident

You declare all your income in Bulgaria, including income from abroad, in an annual tax return by 30 April of the following year. Tax on the total annual tax base is 10% (Art. 48). Tax paid abroad is taken into account as the treaty provides: either as a tax credit or through “exemption with progression”. You attach proof of the foreign tax to the return; with exemption with progression this is optional (Art. 50(5) and (6)).

If you are not resident: income from Bulgaria

A non-resident pays tax in Bulgaria only on Bulgarian-source income. Most such income — rent, interest, the sale of property, royalties — is subject to a 10% final tax (Art. 37 and Art. 46). No annual return is usually filed for it.

Rent from a property in Bulgaria

If the tenant is a company or a self-employed person, they withhold 10% and pay it to the National Revenue Agency. If the tenant is a private individual, you pay the tax yourself by the end of the month following the quarter in which you received the rent and file a return under Art. 55(1) (Art. 65(1) and Art. 67(1)).

If you are resident in an EU or EEA country, you may choose to have the tax recalculated as it would be for a resident, by filing an annual return under Art. 50 (Art. 37a). All your income subject to final tax for that year is then included, and any overpaid tax is refunded up to the amount you cannot credit in your country of residence.

Double taxation treaties

Bulgaria has 70 treaties in force covering 71 countries (the treaty with the former Yugoslavia applies to Serbia and Montenegro). The full list with signature and entry-into-force dates is on the NRA website, and the treaty policy is on the Ministry of Finance website. Whether the credit or the exemption method applies is set out in each treaty.

Treaty relief is not automatic. A non-resident proves entitlement under Art. 135–142 of the Tax and Social Insurance Procedure Code: that they are resident in the other country, that they are the beneficial owner of the income, and that they have no permanent establishment in Bulgaria to which the income is connected.

If you live abroad and have income from Bulgaria

1. Get a certificate of residence

   It is issued by the tax authority of the country where you live, for the relevant year.

2. Prepare a declaration

   Stating that you are the beneficial owner of the income and that it is not connected with a permanent establishment in Bulgaria. Attach the contract and documents showing the amount of income.

3. Up to €255,645.94 a year from one payer

   You give the documents only to the payer, who applies the relief and reports the payments to the NRA by 31 March of the following year (simplified procedure).

4. Above that threshold

   A request is filed with the NRA — at the directorate where the payer is registered, or in Sofia. If an audit is opened, the NRA decides within 60 days.

5. If tax has already been withheld

   File a refund request with the same evidence. The NRA issues its decision within 30 days of receiving it, unless it opens an audit.

Certificate of Bulgarian tax residence

If you are a Bulgarian resident and a foreign tax authority asks for proof, the NRA issues a certificate of residence — under Bulgarian law or under a specific treaty, for the current or a past year. The request (form Окд-273) can be filed online with a qualified electronic signature or a PIN code, by post, by email or at an NRA office. A separate request is needed for each country and for each period longer than one year. If the foreign authority has its own form, attach it with a translation by a sworn translator.