# Can I claim Client Entertainment & Representation as a business expense in Bulgaria?

**Partially claimable.** Partially. Representation expenses are not added back for corporate income tax, but they carry a separate 10% expenses tax. The tax on expenses is a final tax, so you pay 10% extra on the expense itself.

Typical amount: Variable. Track it separately because the 10% tax applies to every euro of representation spending, so €1,000 of client meals carries €100 of expenses tax.

## What National Revenue Agency (NRA / НАП) says

The NRA treats the tax on expenses as a final tax. It applies to documented representation expenses related to the business, to in-kind social expenses for employees such as meal vouchers and voluntary insurance contributions, and to in-kind use of company assets for personal purposes. The rate is 10% on representation and in-kind social expenses and 3% on personal use of assets. It is declared in the annual return filed between 1 March and 30 June of the following year, and paid by 30 June.

## When you can claim

- Client meals and hospitality related to the business, with the 10% expenses tax paid on the amount
- Business gifts to clients, recorded as representation
- Hospitality at trade events
- Conference dinners with business associates
- Meal vouchers for staff, which are in-kind social expenses and exempt up to €102.26 per employee per month when the conditions are met

## When you cannot claim

- Pure personal entertainment with no business association
- Gifts with no documented business reason
- Lavish spending that cannot be justified
- Input VAT on entertainment, which is blocked
- Spending with no invoice or attendee record

## Good to know

**Pro tip:** Keep the invoice, the guest list and the business reason for every meal or gift. Meal vouchers for staff are an in-kind social expense, taxed at 10% unless they fall within the exemption of €102.26 per employee per month, so separate them from client spending. Personal use of company assets is taxed at 3%.

**Important:** Track entertainment in a separate ledger account so the tax-on-expenses calculation is clean when the annual return is prepared. Input VAT on entertainment is blocked, so book the full invoice amount as the cost.

Source: https://nra.bg/wps/portal/nra/taxes/danak-varhu-razhodite

## Related expenses

- [Business Travel](https://accounts-os.com/bg/expenses/travel-bg)
- [VAT-Recoverable Inputs](https://accounts-os.com/bg/expenses/vat-recoverable-bg)