Important Note on the 2026 Budget
This article will be updated immediately upon adoption of a new budget. Please check the last updated date in the sidebar.
Key Taxes in Bulgaria
| Tax | Rate | Legal Basis | Note |
|---|---|---|---|
| Corporate income tax | 10 % | CITA | Lowest in the EU (average 21.27 %) |
| Personal income tax | 10 % | PITA | Flat tax, no progressive scale |
| VAT — standard rate | 20 % | VATA | Registration threshold EUR 51,130 |
| VAT — reduced rate | 9 % | VATA | Hotels, baby food, books, housing (primary residence) |
| Dividend tax | 5 % | PITA / CITA | Final withholding tax |
| Withholding tax (interest, royalties) | 10 % | CITA Art. 195 | For payments to non-resident entities |
| Withholding tax (EU Directives) | 0 % | CITA | Subject to the Interest & Royalties Directive, Parent-Subsidiary Directive |
The combined tax burden with 10 % corporate tax and 5 % dividend tax is 15 % — significantly below the European average.
Social Security and Health Insurance Contributions
Social security contributions in Bulgaria are shared between the employer and the employee in an approximate 60/40 ratio. The table below provides a detailed overview of the current rates:
| Fund | Total | Employer | Employee |
|---|---|---|---|
| Pension Fund (SSI) | 14,8 % | 8,22 % | 6,58 % |
| Supplementary Mandatory Pension Insurance (SMPI) | 5 % | 2,8 % | 2,2 % |
| General Illness and Maternity | 3,5 % | 2,1 % | 1,4 % |
| Unemployment | 1 % | 0,6 % | 0,4 % |
| Occupational Accident and Professional Disease | 0,4–1,1 % | 0,4–1,1 % | — |
| Health Insurance (NHIF) | 8 % | 4,8 % | 3,2 % |
| TOTAL | 32,7–33,4 % | 18,92–19,52 % | 13,78 % |
The specific occupational accident rate depends on the economic activity of the enterprise and is determined by Annex 2 to the SSI Budget Act.
Insurance Thresholds and Minimum Wage
| Indicator | Amount (EUR) | Note |
|---|---|---|
| Minimum wage | EUR 620,20 | Monthly, gross (BGN 1,212.70 at the fixed rate) |
| Minimum insurable income | EUR 620,20 | For self-insured persons |
| Maximum insurable income | EUR 2 300 | Upper limit for social security contributions |
| Mandatory VAT registration threshold | EUR 51 130 | Annual turnover (calendar year) |
The minimum insurable income for employed persons is determined by economic activity and occupational qualification group. The stated value of EUR 620.20 is the minimum for self-insured persons.
Value Added Tax (VAT)
The Bulgarian VAT Act is harmonised with Council Directive 2006/112/EC. Key parameters:
- Standard rate: 20 % — applies to most goods and services.
- Reduced rate: 9 % — applies to: hotel accommodation, baby food and nappies, books (including e-books), housing (purchase of primary residence under the state housing policy).
- Zero rate: 0 % — for intra-Community supplies, exports outside the EU, international transport.
- Mandatory registration threshold: EUR 51,130 — upon reaching turnover of EUR 51,130 for the current calendar year or for the last 12 months (whichever occurs first), the company must file a registration application within 7 days.
Voluntary VAT registration is available at any time and is recommended for companies that mainly work with EU counterparts, as it allows deduction of input VAT credits on received supplies.
Advance Tax Payments Under CITA
Companies in Bulgaria are required to make advance corporate tax payments depending on their net sales revenue for the preceding year:
| Net Revenue (preceding year) | Payment Type | Deadline |
|---|---|---|
| Up to EUR 153,000 | Not required | — |
| EUR 153,000 – EUR 1,530,000 | Quarterly | By the 15th of the month following the quarter (excl. Q4) |
| Over EUR 1,530,000 | Monthly | By the 15th of the current month |
The amount of advance payments is determined based on the projected taxable profit for the current year. If the actual profit deviates by more than 20 %, interest is payable.
Draft Budget Proposals for 2026 — NOT in Effect
The draft 2026 budget contains the following key proposals for changes:
- Increase of the dividend tax from 5 % to 10 % — proposed doubling of the rate. As of mid-2026, the tax remains at 5 %.
- Increase of pension contributions by 2 percentage points — proposed increase of Pension Fund contributions. The 2025 rates currently remain in force.
- Introduction of SAF-T (Standard Audit File for Tax) — a standardised format for electronic exchange of tax information between taxpayers and the NRA. Phased rollout starting with large enterprises.
We recommend monitoring the legislative process and consulting your tax adviser when planning dividend distributions and structuring remuneration.
Frequently asked questions
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