Latest tax rates in Bulgaria

Below we cover all types of taxes in Bulgaria highlighting the changes for 2025 and the applicable tax rates. Before diving into an analysis of Bulgarian taxes, we would first like to discuss the differences in tax revenues across the EU. These differences between countries are significant.

We will clarify:   How much tax do you pay in Bulgaria? (for example DE vs. BGR) - how much is left?

Here is an overview of the Bulgarian taxes:

1. Corporate Tax Bulgaria (LLC / OOD)
2. Capital Gains Tax Bulgaria Dividends
3. Profit tax Bulgaria
4. VAT Bulgaria
5. Income tax Bulgaria
6. Payroll tax Bulgaria
7. Tax Consulting Accounting
8. Company foundation

The corporate tax, also called business tax, is calculated as a percentage of the profit or turnover of a company. It should be mentioned in advance that there is no trade tax in Bulgaria. The valid tax rate at corporate level for capital companies is 10% of the profit. A capital company or legal entity in Bulgaria, like the Limited Liability Company, is equivalent to the Bulgarian legal form of the OOD.



There is a special case in Bulgaria: In Germany, for example, limited liability companies and general companies are considered basic company structures and are taxed at the personal income tax rate. However, in Bulgaria, the two legal forms—S.C.S. (KG) and S.N.C. (OHG) —are legally classified as capital companies and are subject to corporate taxation.

Corporate tax of 10% on profits also applies.

Example: The company "Obermann" has a turnover of €520,000 in 2025 and generates a profit of €500,000

Question: What taxes are due?

Answer: 10% corporate tax is charged on the profit. This means that 50,000 EUR in taxes must be paid.

Mistake: Hardly any expenses can be deducted. Purchases of goods or services abroad cannot be claimed. In most cases, turnover equals profit, or is nearly the same.

Solution: Instead of paying 10% tax on profit/sales. In Romania there is a tax rate of only 1% on sales (If Eastern Europe then Romania!)

This applies only to corporate-level taxation. When it comes to profit distributions, Germany and Bulgaria differ drastically once again!

The capital gains tax, also known as withholding tax, is calculated as a percentage of the profit to be paid out. Whether profits are distributed in the form of a dividend from your own company or dividend payments from listed companies (shares) held, a dividend tax is payable. In Bulgaria, this is 5%.



Investments by Bulgarian companies in other Bulgarian companies and the payment of profits between them do not trigger dividend tax and are completely tax-free. Requirement: The condition that a stake of at least 10% exists for at least 1 year still applies! Dividends received by a foreign company from its investment in a Bulgarian company are subject to a 10% withholding tax. This means that parent-subsidiary structures in Bulgaria can transfer profits without taxation.

A profit distribution for natural persons triggers 5% profit tax:


Example: The company "Hartmann" has a turnover of €600,000 in 2025 and generates a profit of €400,000. €200,000 in profit is now to be paid out to the managing director as a dividend.

Question: What taxes are due on the distribution of profits?

Answer: €200,000 is to be paid out, which means that 5% dividend tax is due to the Bulgarian state. The managing director, Mr. Hartmann, has his profits paid out. He has €190,000 left to use as he pleases.

Mistake 1: Don't pay out profits too quickly. A company should mature for 1-3 years before paying out to individuals. Better: make real estate or other investments.
Mistake 2: Simply transfer profits (withdrawals) to your own private account in your home country.

Foreign natural persons who are not resident or registered as domiciled in Bulgaria, regardless of their place of residence, are usually subject to withholding tax in their home country.

If you invest in a Bulgarian property instead of a profit payout and have the rental income transferred to your private account in your home country - this income is exempt from tax. (Clearly regulated in the DBA)

For comparison: In Germany, 26.75% tax is levied on profit distributions.

A profit tax is, as the name suggests, a tax on profit. As discussed above, a profit tax of 10% is due for corporations. For further details, please contact 1. Corporate Tax and 2. Capital gains tax / dividends in more detail.



Unlike Bulgaria, which is much more inefficient and slower than its neighbour Romania due to higher levels of corruption, Romania continues to reduce all profit taxes year after year. Since 2018, income taxes have been reduced from 16% to 10%. The turnover limit was increased from €100,000 to €250,000 in order to benefit from the 1% tax. In 2015, dividend payments to private individuals were subject to a 15% tax burden. Since 2025, a uniform 10% dividend tax has applied.

Due to the 1% tax rule and other influences, we always recommend Romania as a country of incorporation instead of Bulgaria!

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4. VAT Bulgaria

VAT liability, which means an obligation to apply for a VAT ID and to register for VAT, is binding for sales of more than 50,000 BGN per year. Depending on the exchange rate, this is approximately 25,000 EUR. Natural and legal persons who make more than the equivalent of approximately 25,000 EUR in sales per year are obliged to declare and pay VAT. The standard VAT rate is 20% in Bulgaria.



When Bulgaria joined the EU, it also adopted the so-called reverse charge procedure. If the reverse charge regulation is used, the invoice is issued without VAT. This regulation applies to corporate customers who also have a VAT ID. In the books of the supplier and customer as well as in the VAT returns, the VAT (which has not actually been paid) is recorded both as deductible and as VAT collected.

Exports to third countries are exempt from VAT

1. A reduced VAT rate or exemption from VAT shall only apply
a) Exemptions apply to: social, medical institutions, education and research
b) Exemptions apply to: investment firms, credit and insurance businesses
c) 9% VAT for accommodation, tourist services and hotels

Example: The entrepreneur "Ortmann" makes a turnover of €80,000 in 2025 with digital goods and therefore has no expenses (profit: €80,000). The turnover is divided equally between private and corporate customers within the EU.

Question: What sales taxes are due?

Answer: Mr. Ortmann is liable for sales tax and, thanks to the reverse charge procedure, does not pay sales tax on 50% of his turnover. The other 50% or €40,000 of turnover/profit is subject to 20% sales tax in full.

Mistake 1: Not splitting up several companies to save VAT in a more VAT-friendly country like Romania.
Mistake 2: No use of the reverse charge procedure

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5. Income tax Bulgaria

In general, a flat income tax rate of 10% applies. Bulgaria, similar to Romania, has the lowest income tax rate in the EU, which is 10%. However, there are exceptions for even lower tax rates: (e.g. the tax rate for dividends, tax rate for income from the transfer of real estate, and much more).

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6. Income tax Bulgaria

The income tax for salaries and wages is 10%. Social security contributions and income tax are calculated, withheld and paid by the employer. The total employee contribution is: 13.48%. The total employer contribution is: 20-22%



10,92 %  Pension insurance employee contribution
4,8 %  Health insurance (employer contribution)
2,1% Contribution for continued payment of wages in case of illness and maternity protection (employer's share)
0,4-1,1% Unemployment insurance (employer's share)
2,8% Additional statutory pension insurance (employer contribution)

Employee contribution:
To public insurance – 8,38 %;
To additional statutory pension insurance – 2,2 %;
For health insurance – 3,2 %

Update 2025: 10 Minutes initial consultation, 100% free.

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7. Tax consulting in Romania/Bulgaria

In Romania and Bulgaria, we have created a network of experts with the best tax consultants and accounting professionals. Their expertise goes beyond ordinary bookkeeping and accounting. They possess in-depth knowledge of tax regulations at both national and international levels, as well as the relevant tax laws.



- Tax consulting in Bulgaria and Romania
- Tax advice related to various double taxation agreements
- Many years of knowledge in international and national tax law
- Development of tax strategies instead of standardized accounting
- Direct contact for any tax questions
- No rotation of different employees

From experience: Choose an expert tax advisor rather than a large tax office - where costs are higher and you are just a number. We can help you. Just talk to us!

Update 2025: 10 Minutes initial consultation, 100% free.

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8. Company formation in Bulgaria

There is a very simple tax regime in Bulgaria for any type of company with a tax rate of 10% (flat tax). The special feature of GO EU - and only fully applicable to GO EU: Only 5% - 7.5% corporate tax, and 5% dividend tax on profit distributions into private assets. This represents a total tax burden of a good 10%, so that about 90% of the company profit ends up in the private account.

The unique selling point of GO EU!

We specialize in the two countries Romania and Bulgaria. -> See About us

Based on this expertise, we have created a setup that enables us to complete the process of setting up a company including bank account 100% remotely, i.e. without any travel. And it's completely legal and can be implemented by almost anyone via GO EU!

- Lowest taxes in the entire EU
- Avoiding double taxation through the double taxation agreements
- Low-wage sector with well-trained personnel in certain areas (e.g. IT)
- Managing directors and shareholders are not publicly visible (anonymous)
- Direct contact for any tax questions
- Recognition of the EU company by the domestic tax office

Do you want to start a company in Bulgaria? Request advice! Our expertise specializing in Bulgaria and Romania, including our network of experts, will help you in almost all matters.

Update 2025: 10 Minutes initial consultation, 100% free.

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Taxes Bulgaria, Tax rates Bulgaria, Duties Bulgaria, Residence Bulgaria Tax, Bulgaria Taxes Companies,

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