Bulgaria’s Tax Guide for Individuals
For individuals considering relocation or investment in Bulgaria, understanding the personal tax landscape is essential. Here’s a detailed overview:
1. Personal Income Tax
Tax Rate: Bulgaria has a flat personal income tax rate of 10%. Bank deposit interest is taxed at a lower rate of 8%.
Taxable Income: This includes employment income, business income, capital gains, rent, and bank deposit interest. Capital gains from the sale of real estate are generally subject to personal income tax, though exemptions may apply in specific cases.
Deductions and Reliefs: Various deductions and reliefs are available, depending on the type of income. For example, certain expenses related to employment, such as travel and accommodation, may be deductible.
2. Social Security and Health Insurance
Contributions: The social security contribution rate ranges from 30.7% to 31.4%, with employers and employees sharing the burden. Employers contribute between 17.8% and 18.5%, while employees contribute 12.9%.
Non-Taxable Income: Certain types of income are exempt from tax, including statutory social and health insurance, food vouchers up to 80 BGN per month, and voluntary health insurance .
3. Property and Inheritance Tax
Property Tax: Property owners are subject to an annual property tax ranging from 0.01% to 0.45% of the taxable value of the property. The specific rate is determined by the municipal government.
Inheritance Tax: The inheritance tax rate ranges from 0.4% to 6.6%, depending on the relationship between the beneficiary and the deceased. Gifts are also subject to tax, with rates varying based on the relationship between the donor and the recipient.
4. Tax Filing and Compliance
Tax Year: The tax year in Bulgaria is the calendar year. Individuals must file their tax returns by the specified deadline, typically by the end of March of the following year.
Penalties: Late payment of taxes may result in late payment interest and administrative penalties. It is crucial to adhere to filing deadlines and ensure accurate reporting.
Additional Information about Bulgaria
Geography: Bulgaria is located in Southeast Europe, bordering the Black Sea to the east. It shares borders with Romania, Serbia, North Macedonia, Greece, and Turkey.
Economy: The country has a diverse economy with key sectors including manufacturing, services, and agriculture. It is known for its growing IT sector and competitive business environment.
Culture: Bulgaria has a rich cultural heritage, with influences from the Roman, Byzantine, and Ottoman empires. The country is known for its traditional music, dance, and cuisine.
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