Tax in Bulgaria

Who is the tax authority?

The National Revenue Agency — Natsionalna Agentsiya za Prihodite (NAP) — administers Bulgaria's tax system. NAP operates under the Ministry of Finance through Sofia headquarters, regional directorates, and a dedicated Large Taxpayers and Insurers Office.

Customs matters fall under a separate agency: Agentsiya Mitnitsi (Customs Agency). Filings for most taxes go through the NAP electronic services portal at nra.bg.

The core legal framework rests on four statutes: the Personal Income Taxes Act (ZDDFL), the Corporate Income Tax Act (ZKPO), the VAT Act (ZDDS), and the Tax-Insurance Procedure Code. EU Directive 2022/2523 (Pillar Two) is transposed via successive amendments to the ZKPO.

What is the tax year and when are returns due?

Bulgaria's tax year is the calendar year (1 January to 31 December) for both individuals and most companies. Returns and payment deadlines vary by tax type.

Who counts as a Bulgarian tax resident?

Under Article 4 of the ZDDFL, a person is a Bulgarian tax resident if any one of four tests is met: maintaining a permanent address in Bulgaria; physically present more than 183 days in any 12-month period; posted abroad by a Bulgarian state entity; or maintaining their centre of vital interests in Bulgaria.

Residents pay tax on worldwide income. Non-residents pay tax only on Bulgarian-source income at applicable flat rates.

OECD Model tie-breaker rules apply under treaty when dual residency arises. Residency is assessed per tax year — arriving mid-year starts the 183-day count from that calendar year.

What are the personal income tax rates?

Bulgaria applies a single flat rate to most income categories. There are no progressive income brackets — the same rate applies regardless of how much an individual earns.

Mandatory social-security and health-insurance contributions add approximately 13% on the employee side. Employer contributions add roughly 18%. The headline 10% PIT is only part of the total payroll cost.

How does corporate tax work?

Bulgaria's corporate income tax (ZKPO) is a flat 10% on taxable profit — the second-lowest CIT headline rate in the EU after Hungary's 9%.

Key ZKPO details:

• Interest / royalty WHT: 10% for non-residents (0% EU/EEA under Interest-Royalties Directive)
• Loss carry-forward: 5 years; no carry-back
• Transfer pricing: Article 15 ZKPO documentation thresholds; CbCR for in-scope groups
• Tonnage tax: available for qualifying maritime shipping operations
• Pillar Two: QDMTT and IIR apply for fiscal years starting 31 December 2023; UTPR from 31 December 2024

Pillar Two effectively imposes a 15% minimum effective tax on in-scope MNE groups with global revenue above EUR 750 million. The 10% headline CIT benefit is substantially offset for those groups by the top-up charge.

What about VAT (DDS) and indirect taxes?

Bulgaria's VAT equivalent is called DDS (Danuk Dobavena Stoynost). The standard rate is 20% under the ZDDS.

DDS registration becomes mandatory once taxable turnover reaches EUR 51,130 (from 1 January 2026, measured over the calendar year; previously BGN 100,000 over a rolling 12 months). Below that, voluntary registration is available.

EU OSS (One Stop Shop) and IOSS regimes apply to digital and distance-sale supplies into the EU. Mandatory e-invoicing is being phased in under successive ZDDS amendments. The SAF-T reporting framework (Standard Audit File for Tax) is also being progressively introduced, with phased obligations by company size.

What is the currency framework?

Bulgaria adopted the euro on 1 January 2026, becoming the 21st member of the euro area. The lev converted at the fixed EUR 1 = BGN 1.95583 rate that had applied under the Currency Board arrangement since 1997; cash circulated in both currencies during January 2026, and the euro has been the sole legal tender since 1 February 2026.