Tax Guide Bulgaria 2026: What Every Investor Needs to Know

Last updated: 4 September 2026

Bulgaria still has one of the simplest headline tax systems in the European Union: a 10% personal income tax rate and a 10% corporate income tax rate. The low percentages are real, but they do not tell the whole story. Social insurance can materially change the cost of employment, investment exemptions depend on where and how a security is traded, and a person who repeatedly trades or mines crypto may be treated as carrying on a business rather than making passive investments.

There is also a major practical change in 2026: Bulgaria adopted the euro on 1 January 2026 at the irrevocable conversion rate of €1 = BGN 1.95583. This guide therefore presents current amounts in euros, while occasionally showing the former lev equivalent where that helps explain the law. The changeover itself does not create a tax charge. See the European Central Bank’s Bulgaria changeover page.

This guide is for individuals, investors, employees, landlords, freelancers, business owners and internationally mobile people. It focuses on the rules in force on the date above, not proposals for later years.

Tax Overview — Key Numbers at a Glance

Tax item	2026 treatment	Important qualification
Personal income tax	Generally 10%	Flat rate on most income included in the general annual tax base
Tax-free personal allowance	None	Targeted deductions and family reliefs are available
Qualifying securities gains	Exempt	Applies to specified transactions on eligible regulated markets and qualifying growth markets
Other taxable financial gains	10%	Annual net gain is generally reduced by 10% statutory expenses
Dividend tax	5%	Final tax generally applies to Bulgarian and foreign dividends received by individuals
Taxable interest	Generally 10%	Qualifying EU/EEA bank deposits and specified bonds can be exempt
Rental income tax	10%	A 10% statutory expense deduction normally produces an effective 9% rate on gross rent
Cryptoasset gains	10%	Annual net gain is generally reduced by 10% statutory expenses; business activity can be treated differently
Employee contributions	Generally 13.78%	Contributions apply only up to the monthly insurable-income ceiling
Employer contributions	Generally 18.92%–19.62%	The occupational accident rate varies by business risk category
Self-employed contributions	Commonly 27.8% or 31.3%	Depends on insurance coverage, age and pension-fund status
Maximum monthly insurable income	€2,300	Applies from 1 August 2026; €2,111.64 applied from January through July
Corporate income tax	10%	Separate 5% tax generally applies when profits are distributed to an individual
Standard VAT	20%	Reduced rates apply only to specifically qualifying supplies
VAT registration threshold	More than €51,130	New calendar-year turnover rules apply from 1 January 2026
Annual municipal property tax	0.1‰–4.5‰	Municipality sets the rate within the statutory range
General net wealth tax	None	Property, vehicle and transaction taxes can still apply
Inheritance and gift tax	0%–6.6%	Spouses and direct-line relatives are generally exempt; other rates are municipal
Tax year	Calendar year	1 January–31 December
Individual filing deadline	Normally 30 April	Applies in the following year
Tax authority	National Revenue Agency	Electronic filing is available through the NRA portal

Tax residency

Bulgarian tax residents are generally taxed on worldwide income. Non-residents are generally taxed only on Bulgarian-source income, subject to domestic exemptions and an applicable double tax treaty.

Under the Personal Income Tax Act, an individual can be resident if they:

• have a permanent address in Bulgaria, unless their centre of vital interests is outside Bulgaria;
• spend more than 183 days in Bulgaria in any 12-month period (with special rules for counting arrival and departure days); or
• are sent abroad by the Bulgarian state, a Bulgarian authority or a Bulgarian enterprise, together with qualifying family members.

The decisive concept in difficult cases is the centre of vital interests: where the person’s family, property, employment, business and economic interests are most closely connected. A permanent address or Bulgarian residence permit is relevant, but neither automatically settles treaty residence. If two countries treat the same person as resident, the residence article of the applicable treaty normally uses a sequence such as permanent home, centre of vital interests, habitual abode and nationality.

Days spent in Bulgaria solely for medical treatment or education may be excluded from the 183-day test. Conversely, leaving shortly before day 184 does not necessarily prevent residence if the centre of vital interests is already in Bulgaria. The National Revenue Agency (NRA) overview for cross-border taxpayers is a useful starting point, but treaty cases often justify individual advice.

Personal income tax

Bulgaria does not use progressive bands for ordinary personal income. Most income included in the general annual tax base is taxed at a flat 10% after allowable expenses, mandatory employee or self-employed social contributions, and applicable reliefs.

2026 taxable income	Rate	Typical examples
Employment and most general annual-base income	10%	Salary, freelance income, rent and taxable gains
Dividends	5% final tax	Bulgarian and foreign dividends received by an individual
Sole-trader business income	15%	Business activity taxed under the sole-trader rules
Certain other final-tax income	Usually 10%	Depends on the type of payment and residence/source rules

There is no general tax-free personal allowance and no zero-rate income band. The 10% rate is applied to the relevant tax base, not automatically to gross cash receipts. Salary tax, for example, is calculated after the employee’s mandatory contributions.

The NRA’s advance-income-tax guidance confirms the 10% rate for employment, rent and other economic activity.

Social security and health insurance

This is the part most likely to make a “10% tax country” look less simple. Contributions are calculated on insurable remuneration between the applicable minimum and maximum bases. Minimum thresholds can depend on the activity and occupation; the maximum applies across insurable income.

For an ordinary employee under the common third-category labour rules, the usual split is:

Contribution	Employee	Employer
State social insurance and supplementary mandatory pension, where applicable	10.58%	13.72%
Health insurance	3.20%	4.80%
Occupational accident and disease	—	0.40%–1.10%
Typical total	13.78%	18.92%–19.62%

The employer’s accident-at-work rate varies with the risk category of the business. Special categories of work, civil servants and other insured groups can have different allocations, so the table should not be used as a payroll substitute.

The 2026 contribution ceilings changed during the year:

Period	Maximum monthly insurable income	Minimum monthly base for self-insured persons
1 January–31 July 2026	€2,111.64	€550.66
1 August–31 December 2026	€2,300.00	€620.20

The national minimum monthly wage is €620.20 from 1 January 2026, although sector/occupation insurance floors may affect payroll. The mid-year figures are confirmed by the National Social Security Institute (NSSI). Contributions stop increasing once the aggregated monthly insurable base reaches the ceiling, but income tax does not.

Self-insured people generally choose an advance monthly base between the applicable minimum and maximum and make an annual reconciliation against qualifying activity income. Pension and health cover are mandatory; sickness and maternity cover is generally elective. Depending on that choice and pension status, a commonly encountered combined self-insured rate is 27.8% (pension plus health) or 31.3% when general sickness and maternity cover is included. Exact treatment depends on age, pension-fund status and activity.

EU/EEA and Swiss coordination rules usually aim to keep a worker in only one social security system at a time. An A1 certificate can be crucial for posted or multi-state workers. Tax residence and social-security coverage are separate questions.

Salary example

Assume a standard employee under age 60 earns €3,000 gross per month, has no special reliefs, and is insured in Bulgaria in September 2026. Because the monthly contribution ceiling is €2,300:

Calculation	Amount
Gross salary	€3,000.00
Employee contributions: 13.78% × €2,300	€316.94
Income-tax base	€2,683.06
Personal income tax: 10%	€268.31
Estimated net salary	€2,414.75

The employer would also pay approximately €435.16–€451.26 on top of gross salary, depending mainly on the accident-at-work rate. Rounding and payroll-specific facts may change the result by a few cents. For a quick comparison, use the Finorum Bulgaria net salary calculator.

Allowances, credits and deductions

Bulgaria has no broad personal allowance, but targeted reliefs can reduce the annual tax base. The main 2026 items include:

• Children: a base reduction of €3,067.75 for one minor child, €6,135.50 for two, and €9,203.25 for three or more. At a 10% rate, the maximum tax saving is €306.78, €613.55 or €920.33 respectively, limited by taxable income and allocation between eligible parents.
• Children with disabilities: a separate relief may apply, subject to statutory conditions and supporting documentation.
• Reduced working capacity: people certified with at least 50% reduced capacity may reduce the annual base by €4,049.43.
• Voluntary pension, health and qualifying life insurance: personal contributions can generally reduce the relevant base within separate limits, commonly up to 10% for voluntary pension contributions and up to 10% in aggregate for qualifying voluntary health/life insurance.
• Donations: relief varies by eligible recipient and is subject to percentage caps; the combined reduction is generally capped at 65% of the annual base.
• Young families: qualifying married couples may deduct interest paid on the first €51,129.19 of mortgage principal for their only family home, provided the statutory age and residence conditions are met.
• Home repairs: qualifying labour costs for improvements or repairs to one Bulgarian residential property may reduce the base by up to €1,022.58; materials are not included.
• Cashless payments: a limited relief may apply where the statutory proportion of income is received and expenses are paid without cash and other conditions are satisfied.

These are reductions of the tax base, not refundable cash credits. Most require that the claimant has no enforceable public debts. The current amounts and conditions are collected on the NRA’s tax-relief page.

Investment income

Capital gains on shares and other securities

The most valuable investor exemption is narrower than the phrase “stock-market gains are tax-free” suggests. Gains from qualifying transactions in financial instruments carried out on a regulated market within the meaning of Bulgarian law can be exempt. The legal definition and execution venue matter: merely owning an EU security, using an EU broker or seeing an exchange ticker does not prove that the particular transaction qualifies.

From 1 January 2026, a former temporary extension for specified SME growth markets was made permanent and written into the statutory definition. This still does not cover every multilateral trading facility: the venue must legally qualify as a growth market under the Bulgarian Financial Instruments Markets Act/MiFID framework, and the instrument and transaction must be among those listed. The amendment appears in the 2025 State Gazette legislation effective from 2026. Investors should retain contract notes showing the execution venue and its legal market status.

If the exemption does not apply, the annual taxable result for financial assets is generally the sum of transaction-by-transaction gains less transaction-by-transaction losses, then reduced by 10% statutory expenses. The resulting amount enters the general annual base and is taxed at 10%. In broad terms:

taxable amount = (annual gains − annual losses) × 90%

This can produce an effective 9% tax on the net statutory gain, but it is not a universal 9% capital-gains rate. Losses cannot be assumed to offset salary, rent or other income, and unused investment losses are not generally carried forward by ordinary individuals. Currency conversion and acquisition-cost evidence matter.

Property, business assets and instruments held in a trading business follow different rules. Explore scenarios with the Finorum Bulgaria capital gains tax calculator, then confirm the execution venue and legal classification before relying on an exemption.

Dividends

Dividends received by an individual are generally subject to a 5% final tax. A Bulgarian company normally withholds the tax on a domestic dividend. A Bulgarian resident receiving a foreign dividend generally reports it in Annex 8 of the annual return and pays the Bulgarian final tax, with treaty relief or a foreign tax credit considered where available.

Because the dividend tax is final, expenses are not deducted and personal tax reliefs do not normally reduce it. The NRA’s dividend guidance confirms the 5% rate and the reporting of foreign dividends.

Interest and bonds

Interest is not all treated alike. Interest on bank accounts and deposits with banks established in Bulgaria or another EU/EEA state is generally exempt for an individual. By contrast, taxable interest—such as many private loans, peer-to-peer lending returns or broker-paid balances that do not legally constitute a qualifying bank deposit—is generally subject to 10% tax, and foreign taxable interest may need to be self-reported. Domestic withholding and non-resident rules vary by payer and instrument.

Important exemptions include interest and discounts on Bulgarian government, municipal and qualifying corporate bonds, and comparable bonds issued under the legislation of another EU/EEA state, where the statutory conditions are met. Do not infer that every bond fund, peer-to-peer loan, platform balance or structured note inherits the exemption of a qualifying bond. The NRA summarises the distinction on its interest-income page.

ETFs and investment funds

There is no blanket exemption simply because an investment is an ETF or UCITS fund. A disposal may be exempt when it is a qualifying transaction in a financial instrument on an eligible regulated market. The fund’s domicile, the exchange segment and the actual execution venue should all be documented.

Cash distributions from a fund also require classification. A payment legally classified as a dividend will generally fall under the 5% final-tax regime, while other distributions or interest-like payments can be treated differently. Accumulation inside an accumulating fund does not normally create personal cash income merely because the fund reinvests it, but a later taxable disposal can crystallise a gain.

Tax-advantaged accounts

Bulgaria does not offer a general retail wrapper equivalent to a UK ISA that makes an unlimited portfolio tax-free. The practical advantages instead come from the regulated-market capital-gains exemption and limited relief for qualifying voluntary pension and insurance contributions. Foreign wrappers are not automatically recognised: their Bulgarian treatment follows the underlying legal rights and payments, not the label used abroad.

Cryptocurrency

For an individual investing outside a business, a sale or exchange of cryptoassets is taxable. That includes exchanging one cryptoasset for another; receiving no euros does not prevent a disposal. The gain or loss for each transaction is the disposal value less documented acquisition cost. Annual gains and losses are aggregated and the net amount is reduced by 10% statutory expenses. The taxable amount is then included in the general annual base at 10%, with no advance tax on ordinary disposal income.

Example: annual realised crypto gains of €12,000 and losses of €2,000 produce a €10,000 net gain. After the 10% statutory expense reduction, €9,000 enters the annual base, producing €900 tax before other adjustments.

The NRA’s updated cryptoassets guidance expressly confirms the annual gain/loss netting and 10% expense reduction. It also makes clear that crypto does not fall within the regulated-market securities exemption.

Different treatment can apply where frequency, organisation, mining or other facts amount to business activity. A person acting as a trader—even without formal sole-trader registration—may be taxed under business rules, potentially at 15%, with accounting and social-security consequences. Mining is particularly likely to be business activity. Staking, lending rewards, airdrops and compensation for services require classification at receipt and again on later disposal; keep euro values, timestamps, wallet records, fees and acquisition history. Bulgaria has no general long-holding-period crypto exemption.

Rental income and property

A resident individual’s rental income from Bulgarian or foreign property is generally taxed at 10% after a 10% statutory expense deduction. With no other adjustments, this produces an effective tax equal to 9% of gross rent. If the tenant is a Bulgarian company or self-employed person, the tenant usually calculates and remits advance tax; otherwise the landlord generally does so. Quarterly advance-tax rules apply, while fourth-quarter treatment depends on the statutory payer/election rules. Rental income is reconciled in the annual return.

The NRA confirms both the rate and expense deduction in its rental-income guidance. Model the result with the Finorum European rental income tax calculator.

Gains on real estate can be exempt for an individual in common private-asset cases, including:

• one residential property sold more than three years after acquisition; or
• up to two other immovable properties, and qualifying agricultural or forest property, sold more than five years after acquisition.

Where no exemption applies, the taxable amount is generally the positive difference between sale price and acquisition cost, reduced by 10% statutory expenses, then taxed within the 10% general annual base. Development, frequent dealing or a business pattern can displace these private-asset rules.

Owners also pay an annual municipal property tax, generally 0.1‰ to 4.5‰ of the statutory tax value, plus a municipal waste fee calculated under local rules. The exact rate is set by the municipality. The annual property tax is normally paid in two instalments—by 30 June and 31 October—with a 5% discount for full payment by 30 April. A transfer tax on acquisitions for consideration is set locally within 0.1% to 3%, on the relevant valuation base. Notary and registration costs are separate.

Wealth tax

Bulgaria has no general annual net wealth tax for individuals. That does not mean ownership is cost-free: real estate and vehicles attract local annual taxes and fees, and investment or rental income remains taxable under the normal rules. Foreign-asset reporting can also arise even where no annual wealth tax is charged.

Inheritance and gift tax

Inheritance and gift taxes are municipal and depend on the relationship between transferor and recipient.

Recipient/relationship	Typical statutory treatment
Spouse and direct-line relatives	Exempt
Siblings and their children	0.4%–0.8%
Other recipients	3.3%–6.6%

The municipality sets the rate within the statutory range. Exemptions and valuation rules can change the base, and cross-border estates require attention to the location of assets, the deceased’s status and possible foreign taxes. Direct-line heirs and a surviving spouse generally do not file the inheritance declaration required of other taxable heirs for post-2004 estates. The government’s local-tax overview explains that municipalities choose rates within national limits.

Self-employed people and freelancers

Freelancers and people earning non-employment remuneration generally pay 10% income tax on a base reduced by statutory expenses and their own mandatory contributions. Common statutory expense percentages include:

• 25% for many freelance services and non-employment contracts;
• 40% for qualifying copyright/licensing income, performers and certain professional categories; and
• special higher percentages for specified agricultural activities.

The percentage is a deemed expense: the taxpayer normally does not replace it with actual costs for that income category. Advance tax is generally calculated quarterly, with annual reconciliation. Registration in the BULSTAT register and with the NRA may be required, and social insurance is not optional merely because clients are abroad.

People carrying on commercial activity as sole traders are generally taxed at 15% on business profit and follow more demanding accounting rules. The substance of regular, organised activity matters; failing to register does not guarantee the lighter freelance or investor treatment.

VAT is separate from income tax. From 1 January 2026, a person established in Bulgaria must monitor annual domestic turnover during the calendar year and apply for registration within seven days after it exceeds €51,130. Other registration triggers can apply earlier, especially for cross-border EU services, acquisitions or e-commerce. The standard VAT rate is 20%; reduced rates apply only to categories specifically listed in the VAT Act. The NRA explains the new threshold and 2026 small-enterprise rules on its VAT registration page.

Corporate tax

Bulgarian companies generally pay 10% corporate income tax on taxable profit. The tax year normally follows the calendar year. Accounting profit is adjusted for non-deductible expenses, tax depreciation, provisions, thin-capitalisation and other statutory items. The annual corporate return and payment are generally due by 30 June of the following year; advance instalments may apply depending on net sales revenue.

Dividends distributed by a Bulgarian company to an individual generally carry 5% final tax. Dividends to Bulgarian companies and qualifying EU/EEA corporate shareholders are commonly outside Bulgarian dividend withholding under domestic rules, while other non-resident corporate recipients may face 5%, subject to treaty relief. Interest, royalties, technical-service fees and certain other Bulgarian-source payments to non-residents can attract 10% withholding, again subject to EU directives, domestic exemptions and treaties.

The standard VAT rate is 20%. A 9% reduced rate continues for specifically qualifying supplies such as accommodation; reduced-rate categories should be checked at the transaction date rather than assumed from older COVID-era lists. Employers and owner-managers must also separate salary, management remuneration and dividends: relabelling payment does not override its substance.

Foreign income and double tax treaties

A Bulgarian resident must generally consider Bulgarian tax on foreign salary, freelance income, rent, interest, dividends and taxable gains. Foreign withholding does not by itself settle the Bulgarian obligation. Relief depends on the relevant double tax treaty and may take the form of a tax credit or exemption with progression, depending on the income and treaty.

Bulgaria has a broad treaty network. Use the treaty text in force for the relevant year and obtain a Bulgarian tax-residence certificate when a foreign payer or authority requires it. A foreign tax credit is normally limited to the Bulgarian tax attributable to that income, so excess foreign tax may not be refundable in Bulgaria.

Remote work deserves particular care. Salary is generally sourced where employment is physically exercised, not simply where the employer or bank account sits. Working from Bulgaria for a foreign company may create Bulgarian payroll obligations and, in some cases, corporate permanent-establishment risk for the employer. EU social-security coordination, immigration permission and income-tax residence must all be analysed separately.

Filing and payment

The tax year is the calendar year. Individuals who must file generally submit the annual return and pay the balance by 30 April of the following year. Thus 2026 income will ordinarily be reported in 2027. As of 4 September 2026, the NRA has not yet published the full 2027 filing-campaign announcement, so forms and any early-filing discount for 2026 income should be rechecked when released.

For comparison, the NRA’s 2026 campaign for 2025 income offered a 5% discount—capped at €255.65—for eligible taxpayers who filed electronically and paid by 31 March 2026 and met the no-debt conditions. That historical campaign rule should not be presented as a guaranteed 2027 discount. See the NRA’s 2026 campaign notice.

Employees with only correctly finalised Bulgarian payroll income may not need to file. Filing is commonly required for foreign income, rent, taxable disposals, freelance or business income, and foreign dividends. Foreign bank or brokerage withholding statements, transaction reports and treaty evidence should be retained. NRA electronic filing normally requires a personal identification code (PIC) or qualified electronic signature.

Advance tax and withholding deadlines arise during the year, often by the end of the month following a quarter or by the 25th for payroll-related liabilities. Do not wait for the annual return if the income carries an earlier obligation.

Expats and internationally mobile people

Bulgaria does not have a broad special tax regime that gives new residents a reduced rate, remittance basis or general foreign-investment exemption. Its attraction is the ordinary system: 10% on most personal income, 5% on dividends and possible exemption for qualifying regulated-market gains.

That simplicity still leaves several traps:

• Residence can arise through facts and personal connections, not just 184 days.
• A foreign employer does not automatically remove Bulgarian payroll obligations.
• Foreign pensions, wrappers, companies and trusts are classified under Bulgarian law.
• A company incorporated abroad may become Bulgarian-resident if its effective management is in Bulgaria, or create a Bulgarian permanent establishment.
• CFC, transfer-pricing and beneficial-ownership issues can affect owner-managed international structures.
• Immigration residence and tax residence are different legal statuses.

EU/EEA residents may access certain reliefs subject to conditions and documentation, while treaty eligibility and foreign tax credits should be checked country by country. Compare the practical numbers with Finorum’s cost-of-living comparison and European relocation calculator.

Main advantages and disadvantages

Advantages

• A genuinely low and easy-to-understand 10% headline rate for most personal income.
• A 5% final rate on dividends.
• Potentially tax-free gains on correctly qualifying regulated-market transactions.
• A 10% corporate income tax rate.
• No general annual net wealth tax.
• Euro adoption removes lev/euro conversion risk and simplifies many cross-border comparisons.

Disadvantages and cautions

• Social contributions make employment substantially more expensive than the 10% income-tax headline implies.
• The securities exemption is technical and execution-venue dependent; not every ETF, exchange or platform qualifies.
• There is no universal tax-free allowance and no general tax-advantaged investment account.
• Crypto is taxable on sale or exchange, with business classification possible for intensive activity or mining.
• Municipal property, transfer, gift and inheritance rates vary locally.
• NRA guidance and forms are often Bulgarian-first, and cross-border classifications can require professional advice.

Related Finorum guides and calculators

• Investing in Bulgaria
• Bulgaria tax guide
• Average salary in Bulgaria
• Cost of living in Bulgaria
• Bulgaria capital gains tax calculator
• Bulgaria net salary calculator
• European rental income tax calculator
• Cost-of-living comparison
• European relocation calculator

Disclaimer

This guide is general information, not individual tax, legal, accounting, investment or immigration advice. Tax outcomes depend on residence, citizenship, treaty position, source and classification of income, transaction venue, employment status and documentation. Rates, thresholds, municipal decisions and administrative practice can change. Check the current law and NRA/NSSI guidance, and obtain advice from a qualified Bulgarian professional before filing a return, restructuring investments, moving country or relying on an exemption.

Sources & References

EU regulations & taxation

• Dv.parliament.bg — 2025 State Gazette legislation effective from 2026
• European Commission / Taxation & Customs — European Central Bank’s Bulgaria changeover page
• Nra.bg — advance-income-tax guidance
• cryptoassets guidance
• dividend guidance
• interest-income page
• National Revenue Agency (NRA) overview for cross-border taxpayers
• rental-income guidance
• tax-relief page
• VAT registration page
• Old.mi.government.bg — local-tax overview

Additional educational resources

• Nra.bg — NRA’s 2026 campaign notice
• Nssi.bg — National Social Security Institute (NSSI)