Can I Claim Client Entertainment & Representation as a Business Expense in Bulgaria?
Partially — Bulgarian Corporate Income Tax allows representation expenses as deductible but they are subject to a separate tax on expenses (Article 204 CITA) of 10%. Effectively, you can deduct but pay 10% extra tax on the expense itself.
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What National Revenue Agency (NRA / НАП) says
Article 204 CITA imposes a tax on expenses for representation, gifts and similar at 10% of the expense amount, separately from the Corporate Income Tax. The expense remains deductible against trading profit.
When you can claim
- Client meals (deduction + 10% expense tax)
- Business gifts within reasonable limits
- Hospitality at trade events
- Conference dinners with business associates
When you cannot claim
- Pure personal entertainment without business association
- Gifts above reasonable thresholds
- Lavish expenditure subject to FTA-style challenge
Good to know
Important: Bulgaria's 10% expense tax on representation is unusual within the EU. Track entertainment in a separate ledger account so the tax-on-expenses calculation is clean at year-end.
Related expenses
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