Can I Claim Professional Services as a Business Expense in Bulgaria?
Yes, fees paid to accountants, lawyers, tax advisors and other professionals for the business are fully deductible against Corporate Income Tax. VAT recoverable on input invoices.
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What National Revenue Agency (NRA / НАП) says
Professional service fees incurred wholly for business purposes are ordinary costs of earning taxable profit under CITA, where profit is taxed at 10%. VAT-registered providers charge 20% VAT, recoverable as input tax in the monthly VAT return. Fees paid to a provider in another EU country for services are normally handled through the reverse charge, where you account for both output and input VAT in the same return. Both lines must appear in the sales and purchase ledgers filed with the return by the 14th of the following month.
When you can claim
- Accountant and bookkeeper fees
- Tax advisor and audit fees, including the audit needed when two of the three size criteria are met
- Legal fees for trade contracts
- Translation and notary fees
- Fees for the annual activity report and the corporate tax return
When you cannot claim
- Personal tax or legal advice unrelated to the business
- Capital legal fees such as a share issue, which are capitalised
- Fines paid through professionals
- Penalties for late filing, which are fines and not a business cost
- Fees with no invoice or engagement record
Good to know
Pro tip: Ask the adviser for an invoice that names the company and its VAT or UIC number, and match it to a signed engagement letter. A clear description of the service helps if the tax office asks why the cost was incurred.
Important: Costs that belong to the shareholder personally, such as private tax advice, are not company costs. Costs of issuing shares or setting up a company are capital in nature and are not treated as a normal running cost.
Related expenses
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