A flat 10% corporate tax and a 5% tax on dividends make Bulgaria attractive to founders and families relocating within Europe. Those rates are only part of the picture. Tax residence, the treaty with your current country, how profits leave the company, VAT on cross-border services and the substance behind the structure all decide what you will actually pay — and whether it will survive an audit.
We look at tax as a legal design question, coordinating with your accountants and tax advisers in Bulgaria and abroad where that is useful. A recent example: a client who sold their business in France and moved here with family, for whom we combined a tax-residence opinion, a new Bulgarian holding and residence permits into one plan.
Our work includes
- Tax planning when setting up or restructuring a business
- Corporate income tax and VAT advice
- Personal income tax and the treatment of foreign income
- Tax residence and use of double tax treaties
- Representation during National Revenue Agency audits
- Appeals against tax assessments and penalties
- Tax aspects of buying and selling real estate
Under audit
An NRA audit ends with an assessment act. That act can be appealed first to the Appeals and Tax Enforcement Directorate and then to the administrative court. We prepare the audit response from the start, so that the evidence needed for an appeal is already in the file — as in a recent audit where we had the additional liabilities reduced and penalties dropped.
Questions clients ask
How is a company owner taxed when taking profit out of a Bulgarian company?
The company pays 10% corporate tax on its profit. When it distributes a dividend to an individual, 5% withholding tax applies, giving a combined effective rate of roughly 14.5%. A salary or management fee is taxed differently and attracts social security contributions, so the mix should be planned.
When does a foreign company have to register for VAT in Bulgaria?
A business established in Bulgaria must register once its taxable turnover exceeds EUR 51,130 in a calendar year. Separate rules require earlier registration for certain cross-border services and intra-EU acquisitions, and foreign businesses making taxable supplies here may need to register from the first supply. Voluntary registration is also possible.
I am not tax resident in Bulgaria. What will I pay here?
Non-residents are taxed only on Bulgarian-source income — for example rent, interest, dividends or gains on Bulgarian property. Withholding tax on most passive income is 10% (5% for dividends), and a double tax treaty may reduce it.
