Bulgaria Accounting Questions Answered

What is the corporate tax rate in Bulgaria?

Bulgaria's corporate income tax rate is 10% flat, the lowest in the EU. Dividends paid to shareholders are subject to a further 5% withholding tax, giving a combined effective rate of approximately 14.5% for founder-owned companies.

When is the corporation tax return due in Bulgaria?

The Bulgarian corporate income tax return (Form 1) and final tax payment are both due by 31 March of the year following the tax year. An early payment discount of 1% applies if you file and pay by 31 January. Companies with prior-year tax above BGN 30,000 must also make advance quarterly instalments.

What are advance corporate tax instalments in Bulgaria?

Bulgarian companies whose prior-year corporate income tax exceeded BGN 30,000 must pay advance instalments quarterly. Companies with prior-year CIT above BGN 300,000 pay monthly. The 20% safe harbour rule means if advances reach 80% of the actual liability, no underpayment interest is charged.

What is the VAT rate in Bulgaria?

Bulgaria's standard VAT rate is 20%. A reduced rate of 9% applies to hotel accommodation, restaurants and catering, books, baby food, and certain tourist services. The VAT registration threshold is BGN 100,000 annual taxable turnover. Monthly VAT returns are due by the 14th of the following month.

What are the VAT return deadlines in Bulgaria?

Bulgarian VAT-registered businesses must file a monthly VAT return (Vat14 form) by the 14th of the month following the reporting period. Payment of the VAT balance due is also required by the 14th. A VIES declaration for intra-EU supplies is due on the same date. There is no quarterly VAT option in Bulgaria.

How do I pay myself as a Bulgarian company owner?

Bulgarian company owners pay themselves via salary, dividends, or a combination. Dividends are the most tax-efficient method for founders: after 10% corporate tax, a 5% withholding tax applies, giving a combined effective rate of approximately 14.5%. Salary triggers mandatory social insurance contributions on top of the 10% personal income tax.

How does social insurance work in Bulgaria?

Bulgarian social and health insurance totals approximately 32.7% of gross insurable income, split between employer (18.92%) and employee (13.78%). Self-employed individuals and directors pay contributions on a minimum insurable income of BGN 933 per month (2024), capped at BGN 3,750 per month. Contributions fund the state pension, sick pay, and health insurance.

How do I register a company in Bulgaria?

You register a Bulgarian company (OOD for multi-owner Ltd, EOOD for single-owner) at the Bulgarian Registry Agency (BRRA) online at brra.bg. Minimum capital is BGN 2. The process typically takes 3-7 working days and results in a BULSTAT/UIC 9-digit company number.

What business expenses can I claim in Bulgaria?

Bulgarian companies can deduct expenses that are wholly and exclusively incurred for business purposes from taxable profit. Common deductible expenses include salaries, rent, utilities, professional fees, marketing, and depreciation. Non-deductible items include fines, personal expenses, and representation costs are only 50% deductible.

Do I need to file annual accounts in Bulgaria?

Yes. All Bulgarian companies must file annual financial statements with the National Statistics Institute (NSI) by 31 March and publish them at the Bulgarian Registry Agency (BRRA) by the same date. A statutory audit is required if a company meets two of three thresholds: BGN 2 million in assets, BGN 4 million in revenue, or 50 employees.