Bulgaria taxes both company profits and personal income at a flat 10%. Dividends are taxed at 5%, the standard VAT rate is 20%, and social security is charged on a capped monthly income. Here are all tax rates for 2026 in one place, what they mean for foreigners and company owners, and a worked example of how much tax a Bulgarian company really pays.
Bulgaria Tax Rates at a Glance (2026)
| Tax | Rate 2026 | Notes |
|---|---|---|
| Corporate income tax | 10% | flat, no local surcharge |
| Personal income tax | 10% | flat, no tax-free allowance |
| Dividend withholding tax | 5% | often reduced by tax treaties |
| VAT | 20% standard, 9% reduced (for example hotels), 0% on exports and intra-EU supplies | mandatory above the annual turnover threshold published by the National Revenue Agency |
| Interest on bank deposits (individuals) | 8% | final tax |
| Capital gains | 10% | shares traded on EU regulated markets are exempt |
| Social security (employees) | 32.7–33.4% total | employer about 18.92–19.62%, employee 13.78%, capped at €2,300 a month from 1 August 2026 |
| Freelancers | effective 7.5% income tax | see the freelancer tax calculator |
| Property tax | 0.01–0.45% of tax value | set by the municipality |
| Property transfer tax | 0.1–3% | set by the municipality |
Sources: PwC Tax Summaries – Bulgaria, Ministry of Finance – Personal income taxes, National Revenue Agency. Rates as of 12 October 2026.
Bulgaria Corporate Tax Rate
A Bulgarian company pays 10% on its taxable profit. The rate is flat. There is no extra municipal corporate tax on top. The tax year is the calendar year. The corporate return is due by 30 June of the following year, together with any tax still owed.
Profit is accounting profit adjusted for items the tax law adds back or allows. Depreciation, non-deductible expenses and exempt income are the usual adjustments. Losses can be carried forward under the rules in the corporate tax law. A company with no activity still files. Foreign owners often pair the company with monthly bookkeeping so the June return is not a reconstruction.
If you are still choosing a structure, see how to open a company in Bulgaria. The 10% rate is the same for an EOOD and an OOD. It is not the lowest corporate rate in the EU: Hungary charges 9%.
Bulgaria Income Tax for Individuals
Personal income is taxed at a flat 10%. There is no general tax-free allowance that wipes out the first slice of salary. Employment income is taxed through payroll. The employer withholds the tax and pays it with the social contributions.
Rental income received by an individual is also in this system. A 10% statutory expense deduction applies before the 10% tax, which is why the effective rate on gross rent is often described as 9%. The annual return for individuals is due by 30 April. Freelancers use a different expense rule: 25% of income is deducted without receipts, so the effective income tax is 7.5% before social security. The freelancer guide walks through that calculation.
Dividend and Withholding Tax
Dividends paid by a Bulgarian company are taxed at 5%. The company withholds the tax when it distributes. For a Bulgarian resident shareholder that 5% is usually the final tax on the dividend. A non-resident shareholder may pay a different rate if a tax treaty sets a lower ceiling and the paperwork is in place.
Other payments to non-residents, such as some royalties, interest and service fees, can attract withholding tax. The domestic rate and the treaty rate are not the same thing. The treaty applies when the recipient qualifies as a resident of the other country and, where the treaty asks for it, as the beneficial owner. Plan the withholding before the invoice is paid, not after the bank has already sent the gross amount.
Bulgaria VAT Rate and VAT Registration
The standard VAT rate is 20%. A reduced rate of 9% applies to some supplies, including hotel accommodation. Exports and many intra-EU supplies are zero-rated when the evidence is in order. Zero-rated is not the same as exempt: a zero-rated business can still recover input VAT, an exempt business often cannot.
You must register for VAT once your taxable turnover passes the threshold set by the National Revenue Agency. Voluntary registration is possible below the threshold and is often useful if your clients are VAT-registered businesses. EU business-to-business sales commonly use the reverse charge, so your invoice shows no Bulgarian VAT and the customer accounts for it at home.
Capital Gains Tax in Bulgaria
Capital gains are generally taxed at 10%, the same flat rate as other income. The gain is the difference between the sale price and the documented acquisition cost. Shares traded on a regulated market in the EU can be exempt. That exemption is about the market, not about every foreign brokerage account, so the listing has to meet the statutory test.
A gain on a home can be exempt when the property was your main home for the holding period the law requires. Company-owned property is different: the gain sits in the company's profit and is taxed at the corporate rate, and a later dividend is taxed again at 5%.
Social Security Contributions
Employment contributions are shared. The total is about 32.7% to 33.4% of the insurable income. The employer share is about 18.92% to 19.62%, and the employee share is 13.78%. The range depends on the risk class of the job. Only income up to the cap is insurable. From 1 August 2026 that cap is €2,300 a month. The minimum wage used for 2026 comparisons on this site is €620.20.
Above the cap, the extra salary is subject to 10% income tax and not to further social security. That is why the cost of a senior hire does not scale in a straight line. Self-employed people pay contributions on a base they choose between the minimum and the same cap. For a worked employer-cost example, see hiring employees in Bulgaria.
Local Taxes: Property, Vehicles and Waste Fee
Property tax is local. Municipalities set a rate between 0.01% and 0.45% of the tax value, which is not the same as the market price. The annual bill for an apartment is often a few dozen to a few hundred euros. A waste fee is charged alongside it. The property transfer tax, paid when you buy, is 0.1% to 3%, again set by the municipality.
Vehicle tax depends on the vehicle and the municipality. It is separate from the one-off cost of registering a car and getting plates. If you are buying a home, start with buy property in Bulgaria. If the car comes next, see Bulgarian number plates.
Does Bulgaria Tax Foreign Income?
Tax residents are taxed on worldwide income. You are generally resident if you spend more than 183 days in Bulgaria in a twelve-month period, or if your centre of vital interests is here: your home and family, not a mailing address. Non-residents are taxed only on Bulgarian-source income, such as a Bulgarian salary, rent from Bulgarian property, or a dividend from a Bulgarian company.
Days are counted carefully. A stay that crosses a tax year can still make you resident. A treaty may then decide which country treats you as resident if both claim you. Foreign tax already paid can often be credited, but only within the limit the Bulgarian rules and the treaty allow. Keep the foreign assessments. A bank transfer is not a tax certificate.
Double Tax Treaties
Bulgaria has treaties with many countries, including the United Kingdom, Germany, Spain and the United States. A treaty assigns the first right to tax a kind of income and tells the other country to exempt it or to credit the tax. It does not cancel Bulgarian tax on Bulgarian profits. Employment, dividends, interest, royalties and capital gains each have their own article.
To use a reduced withholding rate you normally need a residence certificate from the other country, and sometimes a beneficial-owner statement. The Ministry of Finance publishes the treaty list on minfin.bg. Read the article that matches the payment.
How Bulgaria Compares in the EU
People ask which European country has the lowest tax rate. On corporate tax, Hungary's 9% is lower than Bulgaria's 10%. Romania also taxes personal income at a flat 10%. Bulgaria's advantage for many founders is the combination: 10% on company profit, 10% on salary, and 5% on dividends, with a social-security cap. It is not a secret rate and it is not the minimum in every column of an EU table.
Low rates come with filing. The company still keeps books, files VAT if it is registered, and withholds tax on dividends. The National Revenue Agency exchanges information with other EU authorities. A structure that ignores that exchange is not a plan.
Example: How Much Tax Does a Bulgarian Company Pay?
| Company profit | €100,000 |
| Corporate tax 10% | –€10,000 |
| Profit after tax, paid out as dividend | €90,000 |
| Dividend tax 5% | –€4,500 |
| Net to the owner | €85,500 |
| Total tax burden | 14.5% |
Excludes social security on a manager's salary and any tax in your home country.
Set Up Your Company and Accounting in Bulgaria
Company formation starts at €1,400. Ongoing accounting starts at €180 a month. Returns and correspondence can be handled in English, German, Bulgarian or Spanish. The tax rates above are the reason most clients come; the filings are what keep the rates usable.
Company formation: costs and steps Get a Free Consultation