I am certified accountant specializing small enterprises and freelancer's accounting; Freelancer registration; IT specialist (digital nomad) accounting; VAT including special regimes such as VAT on margin, VAT triangular regime, Intracommunity deals, Export, Import; Corporative taxes; Social insurances; Individual taxation; Property taxes. Fluent in English and Russian language
My blog offers insightful and informative articles that cover a wide range of topics related to taxes, social insurances, dead lines, various useful information for the tax system in Bulgaria.
By following my blog, you will stay up-to-date with the latest tax law changes and will receive regular updates.
1/ Visit the Migration office and apply for long term residence. You need to present the following documents:
- notary legalized declaration by your landlord that he/she rented to you an apartment
- renting contract (may not be necessary, but still good to have it)
- european health card with as long term of validity as possible since the residency permit will be given the same term as the card
- if you do not have EU health card - health insurance issued by Bulgarian insurance company
- notary legalized declaration that you have enough funds/money to cover your expenses during your stay in Bulgaria
- your passport
*In the police you should be present in person
2/ Receiving your Bulgarian ID card.
In about week time you will receive a Bulgarian ID card with the Personal Identification Number of foreign person.
*You need to receive it in person.
3/ Registration in the Registry Agency (called „Агенция по вписванията регистър Булстат“)
The following docs are needed:
- your newly issued Bulgarian ID card
- your diploma translated in Bulgarian
*That can be done by an authorized person on your behalf.
4/ National Revenue Agency
To proceed with the processes in the National Revenue Agency I need a notary legalized power of attorney. There you do not have to do anything personally except provide me a PoA (attached template).
- Register you for VAT (if you are providing and/or receiving services to/from EU based companies you are obliged to be registered before providing/receiving the service). You however can work with VAT registration in some cases (please give a look at the attached file "VAT Implications freelancer").
- Register you for social insurance
- Start submitting monthly/quarterly/annually the necessary documents.
*I can help with steps 3/ and 4/. In case you need help for 1/ and 2/ you may contact a solicitor that will help or manage it yourself.
**In case you are not an EU citizen then 1/ and 2/ are not valid. I would recommend you to contact a solicitor as I am not a specialist in the migration laws.
***In case you decide to work with a company then step 1/, 2/ and 3/ are not necessary. You may work with a company without having a residence permit and registration in the Registry agency. In that case, except PoA I will need a copy of your passport (I need to submit a translated copy of your passport in NRA).
Depending on business model - B2B (business to business) or B2C (business to customer) and client location there are various possible scenarios.
1/ B2B services provided to companies established in EU Mandatory VAT registration BEFORE providing the services. VAT rate: 0% VAT apply because of the “reverse VAT charge” principle.
2/ B2B services provided to companies established outside EU Mandatory VAT registration after reaching threshold of 100,000 BGN (for 2024), 166,000 BGN (from 1stJan 2025)** VAT rate: 0% NOTE: UK companies paying for services to VAT registered freelancer - 0% VAT apply because of the “reverse VAT charge” principle.
3/ B2C services provided to customers from EU (individuals) Mandatory VAT registration after reaching threshold of 10,000 EUR for the last 12 months period VAT rate: the standard VAT rate in the country of residence of the client (for example: 19% VAT in Germany, 23% Ireland. 22% Italy, 20% Austria, etc.). Additional requirements: The freelancer must register in OSS (One stop shop) system and report (and pay) quarterly the VAT due for each country. If the services are provided through web-site/online shop – the online shop needs to be registered in NRA and sales need to be reported monthly (separately from the VAT reporting if such).
4/ B2C services provided to Customers outside EU (individuals) Mandatory VAT registration after reaching threshold of 100,000 BGN (for 2024), 166,000 BGN (from 1stJan 2025)** VAT rate: 0% Additional requirements: If the services are provided through web-site/online shop – the online shop needs to be registered in NRA and sales need to be reported (separately from the VAT reporting if such).
5/ B2B and B2C services to businesses/customers in Bulgaria Mandatory VAT registration after reaching threshold of 100,000 BGN (for 2024), 166,000 BGN (from 1stJan 2025)** VAT rate: 20% VAT Additional requirements: If the services are provided through web-site/online shop – the online shop needs to be registered in NRA and sales need to be reported monthly (separately from the VAT reporting if such).
*Assuming the freelancer will provide any kind of digital services.
**Voluntary registration possible before starting the activity or reaching the threshold.
The information above is not 100% comprehensive. Any specific case will be discussed and consulted separately in details. Please use the information as a guide.
SOLICITORS:
If you need solicitors help about registering in the migration office for lond term residence or apply for visa and/or need company set up I recommend you to contact some of the following solicitors depending on the location you plan to settle in Bulgaria.
VARNA: Mr. Pan Levi (attorney - at - law) ; Tel.: +359 899 109 313; Email: pan.levi@gmail.com
BURGAS: Mrs. Boyana Chilikova (attorney - at - law) ; Tel.: +359 888 126 255; Email: bchilikova@gmail.com
SOFIA: Mr. Nikola Penchev (attorney - at - law) ; Tel.: +359 887 345 666; Email: nikola@taxmonkey.bg
PLOVDIV: Mr. Alexander Arschinkov (attorney - at - law) ; Tel.: +359 888 107 061;
Email: arschinkow@gmail.com
SILISTRA: Mr. Guner Hakki (attorney - at - law) ; Tel.: +359 876 402 244;
Email: guner_lawyer@abv.bg
ESTATE AGENTS:
If you need help in buying or renting or selling property, I recommend you to contact some of the real estate agents listed below.
Sunny Beach/Nesebar and Burgas area:
ONE STOP Property Shop Ltd. Pat and Helen Fahey / Managers Mobile:+ +359 885 808 637 (WhatsApp or Viber) Email: onestoppropertyshopburgas@gmail.com https://onestoppropertyshopburgas.com/
Yambol, Bourgas, Sliven and Stara Zagora area:
VIP Bulgarian Properties Ldt. Stoycho Dobrev / Manager
Mobile: + 359 893 333 403 (WhatsApp or Viber)
Email: vipbulgarianproperties@gmail.com
http://www.vipbulgarianproperties.com
VARNA area:
Bulgarian Estates Ltd.
Anton Kamenarov / Manager Varna
Mobile: + 359 898 541 452 (WhatsApp or Viber)
Email: antonkamenarov@yahoo.com
https://www.bulgarianestates.com/
If or when you contact any of the above listed solicitors or estate agents, please inform them that he/she is recommended by me and you will receive even better service. I work in close cooperation and know personally any of them so I guarantee for their trustworthy. However, if you think you some of them is not performing as you expected please contact me.
The list with is updated with solicitor and estate agents I know personally only.
WHO IS CONSIDERED AS BULGARIAN TAX RESIDENT
INDIVIDUALS: Bulgarian or foreign citizens that meets the criteria. The Bulgarian citizenship is not a criterion. Criteria:
- Reside in Bulgarian 183 days or more in calendar year – the most important but not the only criterion
- Family in Bulgaria (wife or children)
- Permanent address
- Owning property
- Business activity in Bulgaria
- Other interests in Bulgaria.
*Attached part of the questionary when applying for “tax residency” certificate, the full version of the application form consist also data for the days spent in Bulgaria.
The criterion for 183 days is the main however not the only one. Tax resident can be a person that spend less than 183 days in Bulgaria but meets some of the other criteria and did not spend more than 183 days in total in other country. Example (random countries used): a person lives 5 months in Bulgaria; 3 months in the UK, 3 in Australia and 1 months in total in various other countries.
COMPANIES: Bulgarian or foreign companies for their activity in Bulgaria. The Bulgarian legal entities are local tax resident by default.
CERTIFICATE FOR BULGARIAN TAX RESIDENCY
How to apply: application form (in Cyrillic) submitted online (digital signature or PIC required) on https://portal.nra.bg/ OR personally in any NRA office. The certificate may be received on email or as paper document by post or in NRA office. Time of receiving it: up to 7 or 14 days depending on how/where the application is submitted.
Period: the certificate is issued for a specific year as per client request. It may be for current or past financial year/s (In Bulgaria the financial year match the calendar).
Where is used: in front of foreign authorities proving that the person or company is tax resident in Bulgaria. The document may be required to define the person/company statute for applicable tax treaty.
CONSEQUENCES OF BEING BULGARIAN TAX RESIDENT
The Bulgarian tax residents are tax liable for their incomes from source from Bulgaria and abroad. Depending on the tax treaties the taxes paid abroad are deducted from the tax due in Bulgaria.
Example: Bulgarian tax resident receive rent for a property located in foreign country, pays 5% to the foreign authority, and pays the difference to the Bulgarian tax rate (10%) or 5% in Bulgaria. In case the foreign tax is bigger (as usually) no tax is due in Bulgaria.
Some of the international income taxed abroad may be tax exempt in Bulgaria such as pensions (state or private).
*The above information is not fully comprehensive. If you need help or information please contact your accountant and/or solicitor.
MONTHLY (NRA):
14th VAT declarations
25th social insurance declarations for freelancer and managers of companies
QUARTERLY (NRA) :
30th April advance tax declaration for first quarter (individuals). Including declaration for dividends paid and deductions for rents paid (companies and individuals). Including and declarations from foreign tax residents for their income in Bulgaria (individuals).
30th July advance tax declaration for second quarter (individuals). Including declaration for dividends paid and deductions for rents paid (companies and individuals). Including and declarations from foreign tax residents for their income in Bulgaria (individuals).
30th October advance tax declaration for third quarter(individuals). Including declaration for dividends paid and deductions for rents paid. Including and declarations from foreign tax residents for their income in Bulgaria (individuals).
30th January ONLY foreign tax residents for their income in Bulgaria for the fourth quarter (individuals).
ANNUALLY (NRA, CR, NSI):
30th April tax declarations for income for previous year (individuals) NRA
30th April social insurance declaration for freelancers and individuals paying social insurances in their capacity of managers of a company (individuals) NRA
30th June tax declaration for active companies (companies) NRA
30th June balance sheets for active companies (companies) NSI
30th June tax declaration for dormant companies (companies) NSI
30th June tax declaration for dormant companies (companies) CR
30th September balance sheets for active companies (companies) CR
* Abbreviates: NRA – National Statistical Institute CR – Commercial Register NSI – National Statistical Institute
** The above information is not fully comprehensive. If you need help or information please contact your accountant and/or solicitor.
***The payment of the due amounts are with the same dead lines as the declarations.
When purchasing a property the citizens of third countries (out of EU) are obliged to set up a company as such individuals are not allowed to own land (the rule do not apply for apartment). If we assume that the company will not have other activity and minor or none expenses the accountancy processes that needs to be done are as follows (assuming the property is purchased in 2023).
FIRST YEAR
30th June 2024 tax declaration for active companies (companies) NRA
30th June 2024 balance sheets for active companies (companies) NSI
30th September 2024 balance sheets for active companies (companies) CR
SECOND YEAR
30th June tax 2025 declaration for dormant companies (companies) NSI
30th June tax 2025 declaration for dormant companies (companies) CR
THIRD AND NEXT YEARS
2026 and following years – NOTHING until the company buys/sell asset (property, vehicle, other long term asset).
* Abbreviates:
NRA – National Statistical Institute
CR – Commercial Register
NSI – National Statistical Institute
** The above information is not fully comprehensive. If you need help or information please contact your accountant and/or solicitor.
FREELANCER– self-employed/solopreneur persons caring out professional activity. Such as: IT engineers, Consultants, Educational trainers, Digital creators, Data analyzer, Accountants, Solicitors, Notaries, and any other individuals providing various services.
*Freelancers can be only Bulgarian tax residents – local or foreign individuals with residence permit or Visa allowing them to work on the territory of Bulgaria.
REGISTRATION – Registry Agency, so called “Агенция по вписванията Регистър „Булстат“ (before starting the activity) and National Revenue Agency (in 14 days after starting the activity).
TAXES – 10% personal tax, social insurances (27.8% or 31.3%) paid on base in between 933 to 3,750 BGN per month, 20% or 0% VAT depending on activity/clients/incomes.
TAXIBLE INCOME – the total income after deducting 25% or 40% “allowed expenses” depending on the profession (25% in most cases) and deducting the social insurances paid.
FREELANCERS working for foreign companies – in case the company is based in EU – MANDATORY VAT registration BEFORE starting the activity. If the company is based out of EU – mandatory VAT registration after reaching the VAT registration threshold (100,000 BGN in 2024 and 160,000 BGN from 2025), voluntary VAT registration is allowed. The freelancer invoices the client (foreign companies) with 0% VAT rate, in EU is used the principle of “Reverse VAT Charge” as per EU VAT directives.
*Providing of services to foreign individuals (not companies) is under different VAT regime.
TAX CALENDAR:
MONTHLY
– 14th VAT declarations (if VAT registered).
– 25th Social insurance declarations for previous month.
QUARTERLY
– 30th April advance tax declaration for first quarter.
– 30th July advance tax declaration for second quarter.
– 31st October advance tax declaration for third quarter.
ANNUALLY
– 30th April tax declarations for income for previous year.
– 30th April social insurance declaration for previous year.
*The above information is not fully comprehensive. If you need help or information, please contact your accountant.
TAX AND SOCIAL INSURANCES IMPLICATIONS
*Regulations (EC) 883/04 and 987/09 apply. The article describe situation where the person lives in permanently in Bulgaria and works for employer based in other country (in EU or different).
WHERE THE SOCIAL INSURANCES AND TAX MUST BE DECLARED AND PAID:
In Bulgaria. The principle of the social insurance and tax contribution is that they must be paid in the country where the person reside permanently no matter what is the source of the income. Working for foreign employer is not forbidden of course but it needs to be arranged in appropriate way. The responsivity as usual in case of employment contracts belongs to the employer.
WHAT A FOREIGN EMPLOYER SHOULD DO IF HE EMPLOYS PERSON IN BULGARIA:
1/ Register in National Revenue Agency and obtain a registration number (10-digit number) which is used to identify him in front of local authorities.
2/ Submit monthly declaration for the salary paid, social insurances and tax due and to pay.
2/ Submit annual declaration for the salary, social insurance and tax paid.
WHO HAS THE RESPONSIBILITY IN FRONT OF THE BULGARIAN AUHTORITIES:
The employer. In case not fulfilling his obligations, he will be penalized by the Bulgarian tax authorities.
ALTERNATIVE OF EMPLOYMENT FOR A PERSON WORKIGN REMOTELLY FROM BULGARIA:
Freelancing. In that case the “employer” (particularly - client) has no obligation towards the Bulgarian state. All the obligations for declaring and paying social insurances and tax belongs to the freelancer.
*The article is not fully comprehensive, for more information please contact your accountant. More articles can be found in my professional blog.
TAX AND SOCIAL INSURANCES IMPLICATIONS
VARIATIONS:
1. Sale of property by individual - local tax resident (explanation of “tax resident” will follow in few days).
The properties used for living purposes such as house and/or apartment are free of taxation of owned more than 3 years.
Properties used for none living purposes such as offices, storage, agriculture land, land with no buildings on it – free of taxation if owned more than 5 years.
If the sale is under taxation – 10% tax on the difference between purchase and sales price after removing 10% allowed expenses.
Effectively – 9% on profit.
2. Sale of property by company.
The profit of the company activity is under taxation of 10%. Profit – purchase price minus sales price. The profit/loss of the company may include other expenses and/or incomes and depreciations (if such are calculated).
If the shareholder/s wants to transfer dividend (the profit after deducting 10% tax paid) – 5% tax.
Effectively – 14.5% on profit.
3. Sale of a property by individual – foreign tax resident.
The profit is under 10% taxation. No allowed expenses applicable.
Effectively – 10% on profit.
DECLARING AND PAYING THE TAX:
Individuals local tax resident – by 30th April of the following year.
Companies – by 30th June of the following year.
Individuals foreign tax residents – by the end of the month following the quarter (example: sale in second quarter of the year, declaring and payment of tax until 31st July).
** The above information is not fully comprehensive. If you need help or information, please contact your accountant and/or solicitor.
Yes, you can. It is easy.
HOW?
You need to do is to obtain PIC (personal identification code) issued by NRA. An application form in Cyrillic is submitted in any office of NRA (no matter of your resident address), the PIC code is given immediately. In case you own a company, the PIC code must be given to you as a person and separate one for the company (two applications forms are submitted). If you are not Bulgarian tax resident you can have PIC in your company only.
WHAT DO I DO WITH PIC CODE?
You can access yours and your company (if such) account in NRA website on: https://portal.nra.bg/
There you can check for due taxes, social insurances, fines (issued by NRA), tax revisions and in general to have an idea for yours and your company (if such) relation with NRA.
You can access your account (also your company one if such) in government website: https://egov.bg/
There you can check and pay your municipality taxes (properties and vehicles).
You can check your property statute – deals done with your properties. I do recommend to check this at least ones a year just be sure all is OK.
You can check fines issued by police (usually speed camera fines) and pay them.
The government websites have English versions but still sometimes can be a struggle to reach the necessary info. Ideally a Bulgarian friend will help with that.
Property bought in personal name (as individual):
Municipality tax, paid annually. The tax is calculated on the so called “tax evaluation” price which is an evaluation given by the municipality considering the property size, year of build, available facilities in the property (access to road, water, electricity, other), the construction, the location, other (example: properties in a city center has significantly higher evaluation than such in a villages). The tax is defined by each municipality, usually is about 0,6-0,7% of the tax evaluation. If the property is not used the tax can be reduced in almost half by submitting a declaration, must be done each year.
Property bought with a company (for citizens of countries outside EU):
In principle is the same as the properties in personal name – municipality tax is due, the percentage is the same. The difference is that the tax is due on the higher of these: tax evaluation OR balance value (price of purchase).
The dormant companies used for property purchase has also obligation to submit various documents, see post “Accountancy of dormant company”.
Do I have to declare the property purchase:
No. The notary is obliged to inform the municipally where the property is located. However, you can visit the municipality personally and declare it to avoid any mistakes or eventual “overevaluation” of the property which may result higher taxes. The title deed does not consist all the information needed to define the tax evaluation so if not declared personally an employee in the municipality may use wrong data.
How to check and pay the tax:
- Personally, or someone on your behalf (PoA is not required) in the local municipality.
- Online on https://egov.bg/
You will need digial signature (given by authorized providers) or PIC (personal identification code) given by NRA.
- In office of EasyPay (payment operator with offices in Bulgaria).
*The above information is not fully comprehensive. If you need help with that, please contact your accountant, solicitor or estate agent.
Property bought in personal name (as individual):
*Definition of “tax resident” can be found in other post.
TAX ON PENSION:
None. No matter if the pension is paid by government or private fund, it is tax exempt. The pension may be a subject of taxation in the country of origin (as in the UK).
DO YOU HAVE TO DECLARE OR INFORM NRA:
No. The tax-exempt incomes do not need to reported in NRA (except voluntary in some other cases).
**Abbreviature:
NRA – National Revenue Agency.
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Freelance registration - Frequently asked questions
The clients pay the taxes himself, I do not operate (or have any access) to clients funds. I will apply for a Personal Identification Code issued by the NRA. With that code the client has personal access to his NRA account where the due amounts can be checked and paid with a bank card very easily and safely. With that access the client has control of what I am doing on his behalf as he/she can check all the declarations I submit on his behalf.
Yes.
Anything that consist:
1/title "Diploma" or "Certificate"
2/your full names
3/authority that issued it
4/some qualification or profession
should be good enough. In fact the Registry agency does not care much for that. By law such a document is needed but practically no one will go into detail reading it.
No. You can receive your income in any bank jurisdiction you like. Until you declare and pay your tax in Bulgaria, the NRA is fine with that. Any alternatives - PayPal, Stripe, Revolut, Wise, foreign bank accounts, others are allowed (or not forbidden).
NO. You can use one bank account for your income and expenses. However in case you have many various expenses it may be more convenient to keep a separate account for the incoming and outgoing funds. For security reasons separate accounts are also recommended (but not mandatory).
The "sole-trader" is commonly used in UK legislation and practically means a "freelancer". In Bulgaria the Sole-trader is a specific (and different) legal entity. Shortly described: it is an individual with some company accounting requirements (the accounting is the same as for company). Practically it is the most expensive option as you will pay taxes as company (15%) + social insurances on the maximum.
The solicitor I work with charges 200 EUR for company registration. This includes state fees. NOT included: notary fees or other expenses. You must sign some document in front of a Bulgarian notary OR Bulgarian consulate/Embassy (if done abroad) OR local notary with an apostille (if done abroad).
Better - freelance because of the easy access to your income.
Cheaper - depending on the income. Please check the attached file. The threshold of 125,000 BGN annually is the "touching" point between the 2 scenarios. Lower than that - cheaper is the company, higher - cheaper is the freelancer.
NOTE: my fee for the accounting is higher for a company as it also includes the personal accounting of the shareholder/manager.
No. Until you pay your taxes in Bulgaria the Bulgarian authorities are not interested if you spent 183 days here. However this may not refer to other countries and authorities where you reside.
NO other administration costs. You will pay monthly, quarterly and annually different tax and social insurance payments that depend on your income plus my fee. That's all.
The VAT will be issued in 14 days from applying for it. The VAT registration can be started from the moment of registering you in the Registry agency (or registering a company). If you provide services to EU VAT registered companies you are obliged to be registered for VAT before the service is provided.
NO. You will send the client invoice with 0% VAT rate. In case the client is EU based (valid for the UK as well) he will use so-called "reverse charge of VAT".
You should send me monthly on my email:
- Bank statement
- Invoices you send to your clients
- Expense invoices (if you operate with a company). Please note that many expenses are not acceptable for tax purposes, such as personal use - rent, food, restaurants, etc. We can discuss this separately.
Except some activities needed for the initial registration - NO. All the tax and registration processes are digital (except the registration in the Migration office).
Yes. The VAT on any expenses directly related to the freelancer (or company) activity can be refunded. Since the freelancer (or company) invoice with 0% VAT, the VAT paid for expenses should be refunded cash to a bank account. This can be done monthly, on quarters or once a year. Any cash refund are subject to tax check (or so-called “revision”) done by employees of NRA that takes somewhere between one and six months depending on the transactions (incomes/expenses) for the period. The monthly accountancy fee I quoted do not include this activity. It is paid separately 100 EUR per each check or revision.
The expenses can be claimed by companies only (the freelancer use fixed 25% rate of recognized expenses). The expenses deduct the taxable income. Such are the ones related directly to the company activity. Assuming the activity is providing IT services, expenses can be: mobile/internet services, stationary/office equipment such as computers, printers, other devices, expenses for services – accounting/legal/other, rent of office, others. What expenses cannot be claimed – personal expenses such as food, restaurants, clothes, flight tickets, hotel bills, rent of residential property, car expenses (including depreciation). In fact there is not approved or banned list of expenses, it is a decisions of the NRA employees which can be accepted. NRA is very restrictive in that.
Any other questions - please do not hesitate to contact me.
The article is a standard introduction and includes various options some of which may not refer to you. Please contact me do discuss in details.
Yes. Your employer will pay social insurance on the actual salary you receive (but not more than 3,750 BGN per month). You as freelancer will pay social insurances on the difference between your salary and 3,750 BGN. If your salary is 3,750 BGN or more you will not pay social insurances in your income, only the tax.
You can send me a message or ask me a general question using this form.
I will do my best to get back to you soon!
Mon | 08:30 – 19:30 | |
Tue | 08:30 – 19:30 | |
Wed | 08:30 – 19:30 | |
Thu | 08:30 – 19:30 | |
Fri | 08:30 – 19:30 | |
Sat | 10:00 – 14:00 | |
Sun | Closed |
Video meeting available, please contact me: info@insurebulgaria.com
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