Tax in Bulgaria
Tax in Bulgaria: a clear guide for 2026
Tax in Bulgaria
Tax in Bulgaria
We live in Varna ourselves and know the city, the offices and the customs from the inside. Our Bulgarian founder was born and raised here. He truly knows the way, knows the people behind the counter and speaks the language as a native.
A guide in your own language comes with you to the counters and translates everything on the spot. The rest of your journey we handle in your own language: we support Dutch, Polish, Ukrainian, Russian, Bulgarian and English. And because one of us went through the whole process, we know exactly what you'll run into.
How does tax work in Bulgaria?
Bulgaria uses a flat 10% tax on personal income and on company profit, with 5% on dividends and 8% on interest. On top of income tax, social security and health contributions of roughly 32% to 33% of gross salary apply, split between employer and employee, but capped. VAT is 20%.
Personal income tax
This is the part everyone has heard about. Bulgaria charges a flat 10% on personal income, the same rate it has held since 2008. There are no brackets and no tax-free allowance: everyone pays 10%, whether you earn a little or a lot. The rate covers salaries, self-employment income, rental income and most other personal income.
For people coming from countries with top rates near 45% or 50%, that simplicity is the whole attraction. We compare the rates side by side in our guide on the lowest tax in Europe.
The rates at a glance
| Tax | Rate (2026) |
|---|---|
| Personal income tax | 10% flat |
| Corporate profit tax | 10% flat |
| Dividend tax | 5% |
| Interest income tax | 8% |
| VAT (standard) | 20% |
| VAT (reduced, e.g. hotels, books) | 9% |
| Social security + health (combined) | ~32.7 to 33.4% |
Corporate tax and dividends
Bulgaria uses a flat 10% tax on personal income and on company profit, with 5% on dividends and 8% on interest. On top of income tax, social security and health contributions of roughly 32% to 33% of gross salary apply, split between employer and employee, but capped. VAT is 20%.
Social security and health contributions
Here is the bit people forget, and it matters. On top of the 10% income tax, social security and health contributions apply on salary income, totalling roughly 32% to 33% of gross. The employer pays the larger share (around 19%) and the employee around 14%.
The good news? Contributions are capped: above a maximum monthly insurance base of about €2,112, you stop paying extra social security, so high earners see their effective rate fall. For a typical employee, income tax plus the employee contribution lands near 24%.
VAT
The standard VAT rate is 20%, with a reduced 9% rate for things like hotel accommodation and books. Businesses must register for VAT once their turnover passes the national threshold (around €51,130 in 2026), and there are EU-wide small-business rules too. If you run a company here, your accountant handles VAT registration and filing.
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Capital gains, property and other taxes
A few useful points. Capital gains are generally taxed at 10%, but gains from selling shares traded on a regulated EU or EEA stock exchange are tax-exempt, which is a genuine perk for investors.
Selling your family home held for more than three years is typically exempt too. Property transfer tax runs from roughly 0.1% to 3% depending on the municipality, and there is no wealth tax in Bulgaria.
Personal income tax: Bulgaria vs Western Europe
Approximate headline rates, 2026. Bulgaria applies a flat 10%; Western European figures are top marginal rates.
Figures are approximate headline rates and change over time. Always confirm your own position with an accountant.
Are you a Bulgarian tax resident?
This is the question that decides everything. In general you are a Bulgarian tax resident if you spend more than 183 days here in a 12-month period, or if your centre of vital interests (your home, family and main economic ties) is in Bulgaria.
Residents are taxed on their worldwide income; non-residents only on income from Bulgarian sources. Getting this right, and lining it up with your home country, is exactly where good advice pays for itself.
Double taxation treaties
Worried about being taxed twice? Bulgaria has double-taxation treaties with more than 70 countries, designed to make sure the same income is not taxed in two places.
How a treaty applies depends on your nationality and where you live, so this is one to check with an accountant rather than assume.
Filing and deadlines
For employees, tax is usually withheld monthly by the employer, so there is nothing else to do. If you are self-employed or have other income, you file an annual personal tax return, with the main deadline on 30 April of the following year. Returns can be filed online. It is, honestly, one of the least painful tax-filing systems in Europe.
Please note: this page is general information about the Bulgarian tax system, not personal tax advice. Rates, thresholds and your own position can change, and your home country's rules matter too. We connect you with our qualified accountant for advice specific to you.
It matters?
Why this matters to us
We have seen the two ways this goes. People who set things up properly from day one keep more of their money and sleep fine. People who guessed, or copied a forum post, end up with a mess: missed registrations, the wrong residency status, a surprise bill. The tax itself was never the problem. The setup was.
We live and work under this system ourselves, and we use the same accountant we put you in touch with. We would rather you understand the full picture, contributions and all, than fall for a headline and trip over the details. Simple done right beats clever done wrong.
What
the numbers say?
5%
Dividends are taxed at 5% and interest income at 8% (reduced from 10% in 2025).
10%
Personal and corporate income are both taxed at a flat 10%, held since 2008.
20%
Bulgaria has double-taxation treaties with 70+ countries, and the standard VAT rate is 20%.
32.7% to 33.4%
Combined social security and health contributions are about 32.7% to 33.4% of gross, capped at a maximum base of roughly €2,112 a month from January 2026.
"From up to 50% in parts of Western Europe down to a flat 10%, that is the gap many people close by basing themselves in Bulgaria."
Tax in Bulgaria: frequently asked questions
What is the income tax rate in Bulgaria?
Personal income is taxed at a flat 10%, with no brackets and no tax-free allowance. Everyone pays 10% regardless of how much they earn. It applies to salaries, self-employment, rental income and most other personal income.
How much is corporate and dividend tax?
Company profit is taxed at a flat 10%, and dividends taken from the company at just 5%. This low combination is why many founders and freelancers run their business through a Bulgarian EOOD company.
Do I pay social security in Bulgaria too?
Yes. On salary income, social security and health contributions of roughly 32% to 33% of gross apply, split between employer and employee. They are capped above a maximum base of about €2,112 a month, which benefits higher earners.
What is the VAT rate in Bulgaria?
The standard VAT rate is 20%, with a reduced 9% rate for certain goods and services such as hotel stays and books. Businesses register for VAT once turnover passes the national threshold, around €51,130 in 2026.
Am I a tax resident in Bulgaria?
Generally, yes if you spend more than 183 days here in a 12-month period, or if your centre of vital interests is in Bulgaria. Residents are taxed on worldwide income; non-residents only on Bulgarian-source income.
Will I be taxed twice, here and at home?
Bulgaria has double-taxation treaties with more than 70 countries to prevent the same income being taxed twice. How a treaty applies depends on your nationality and residence, so it is worth confirming with an accountant.
How do I file taxes in Bulgaria?
Employees usually have tax withheld monthly by their employer. If you are self-employed or have other income, you file an annual return, with the main deadline on 30 April of the following year. Filing can be done online.
Is bank interest taxed in Bulgaria?
Yes. Interest income, including from bank deposits, is taxed at 8% in 2026. Capital gains from shares traded on a regulated EU or EEA stock exchange, however, are generally tax-exempt.
