Tax
Taxes in Bulgaria
Bulgaria taxes company profits and personal income at a flat 10%. Dividends are taxed at 5%, VAT is 20%, and social contributions are capped at a maximum monthly income of €2,300.
- Tax on dividends to individuals and non-EU companies
- 5%1
- Tax on dividends to individuals and non-EU companies
Company taxes
| Corporate income tax | 10% (branches too) |
|---|---|
| Capital gains | Part of taxable profit at 10%; gains on qualifying listed shares exempt |
| Tax losses | Carried forward for 5 years; no carry-back |
| Minimum tax (Pillar Two) | 15% for groups with revenue of €750 million or more |
| Tax treaties | About 70 double tax treaties |
| Tax year | Calendar year; return and payment by 30 June |
Source: Deloitte: International Tax, Bulgaria Highlights 20261
Withholding taxes
| Payment | To a non-resident |
|---|---|
| Dividends | 5%; 0% to companies in the EU and EEA |
| Interest | 10%; lower under treaties or the EU directive |
| Royalties | 10%; lower under treaties or the EU directive |
Source: Deloitte: International Tax, Bulgaria Highlights 20261
Payments between Bulgarian companies are not subject to withholding tax.
Personal income tax
| Employment and business income | 10% flat, no brackets |
|---|---|
| Dividends | 5% |
| Capital gains | 10% |
| Rental income | 10% after a 10% allowance for expenses |
| Annual return | By 30 April, if needed |
Source: Deloitte: International Tax, Bulgaria Highlights 2026; RSM Bulgaria: Real estate tax factsheet 20261,6
VAT
| Standard rate | 20% |
|---|---|
| Reduced rate | 9% on hotel stays, books and baby food and products |
| Exports and EU supplies | 0% |
| Registration threshold | €51,130 of taxable turnover in the current or previous calendar year |
| Returns | Monthly, by the 14th of the following month |
Source: Deloitte: International Tax, Bulgaria Highlights 2026; Wise: Cost of starting a business in Bulgaria (VAT threshold from 1 January 2026); PwC Worldwide Tax Summaries: Bulgaria, corporate, other taxes (VAT registration from 2026)1,4,7
Social security and health insurance
| Contribution | Employer | Employee | Total |
|---|---|---|---|
| Social security | 14.12% to 14.82% | 10.58% | 24.7% to 25.4% |
| Health insurance | 4.8% | 3.2% | 8% |
| All contributions | 18.92% to 19.62% | 13.78% | 32.7% to 33.4% |
Source: PwC Worldwide Tax Summaries: Bulgaria, individual, other taxes2
The employer’s rate depends on the work-accident fund rate for the business, from 0.4% to 1.1%. Contributions are due on pay up to the maximum insurable income of €2,300 a month from 1 August 2026 (€2,111.64 before then), so pay above that level carries only the 10% income tax.2,3
Property and other taxes
| Annual property tax | 0.01% to 0.45% of the tax value, set by each municipality |
|---|---|
| Transfer tax on property and vehicles | 0.1% to 3%, set by each municipality |
| Inheritance and gift tax | 0.4% to 6.6%; spouses and close relatives exempt |
| Insurance premium tax | 2% |
Source: Deloitte: International Tax, Bulgaria Highlights 20261
Tax incentives
- Manufacturers in municipalities where unemployment is at least 25% above the national average can keep up to 100% of their corporate tax if they reinvest it there.
- Certified investment projects can have employer social contributions for new jobs refunded for up to 24 months.
- See the fact sheet on investment incentives for the conditions.
Source: Ministry of Economy, Investments and Industry: Investment promotion measures5
Frequently Asked Questions
What is the corporate income tax rate in Bulgaria?
Bulgaria’s corporate income tax rate is 10%, including for branches. The tax year is the calendar year, and the return and payment are due by 30 June.
What is the personal income tax rate in Bulgaria?
Bulgaria taxes employment and business income at a flat 10%, with no brackets. Dividends are taxed at 5%, and capital gains at 10%.
What are the VAT rates and registration threshold in Bulgaria?
Bulgaria’s standard VAT rate is 20%, with a reduced rate of 9% on hotel stays, books, and baby food and products. The registration threshold is €51,130 of taxable turnover in the current or previous calendar year, from 1 January 2026.
How much are social security contributions in Bulgaria?
Bulgaria’s combined social security and health insurance contributions total 32.7% to 33.4%, with 18.92% to 19.62% paid by employers and 13.78% by employees. From 1 August 2026, contributions apply only up to €2,300 of monthly insurable income; earnings above that are subject only to 10% income tax.
What withholding tax applies to payments to non-residents in Bulgaria?
Bulgaria’s withholding tax on dividends paid to non-residents is 5%, or 0% for companies in the EU and EEA. Interest and royalties are generally taxed at 10%, with lower rates possible under tax treaties or the EU directive.
Can businesses get tax incentives in Bulgaria?
Manufacturers in municipalities where unemployment is at least 25% above the national average can retain up to 100% of their corporate tax if they reinvest it there. Certified investment projects can also receive refunds of employer social contributions for new jobs for up to 24 months.
Sources
- Deloitte: International Tax, Bulgaria Highlights 2026 (PDF)
- PwC Worldwide Tax Summaries: Bulgaria, individual, other taxes
- National Assembly: Social security budget for 2026
- Wise: Cost of starting a business in Bulgaria (VAT threshold from 1 January 2026)
- Ministry of Economy, Investments and Industry: Investment promotion measures
- RSM Bulgaria: Real estate tax factsheet 2026 (PDF)
- PwC Worldwide Tax Summaries: Bulgaria, corporate, other taxes (VAT registration from 2026)
Figures checked 13 October 2026. Prepared by InvestBulgaria for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.
