Donations to NGOs and Public-Benefit Causes — Tax Reliefs for Individuals and Legal Entities in Bulgaria (2026)

Legal framework — four laws in one donation

A donation under Bulgarian law is regulated as a gratuitous transaction under Arts. 225–227 OCA, requiring a written form with notarial certification of signatures for real estate, and ordinary written form for movables or rights. Tax and accounting consequences, however, are driven by:

• PITA, Art. 22 — tax relief for individuals;
• CITA, Art. 31 — donation expense recognised for tax purposes for legal entities;
• LTFA, Art. 44 et seq. — gift tax payable by the recipient (typically a local tax, save for the exemptions in Art. 48);
• VAT Act — VAT consequences when a taxable person donates goods or services;
• Patronage Act — special regime for cultural donations (15% relief);
• Non-Profit Legal Entities Act (NPLEA) — “public benefit” status.

When the relief is taken

The relief is taken once, with the annual tax return:

• Individual — annual return under Art. 50 PITA, deadline 30 April of the following year;
• Legal entity — corporate annual return under Art. 92 CITA, filed from 1 March to 30 June of the following year (Art. 92(2) CITA);
• It is not taken “during the year” — the taxable base is not reduced as you go.

Individuals — Art. 22 PITA

Art. 22 PITA grants a relief that reduces the aggregate of the annual tax bases of an individual (i.e. employment, self-employment, rental etc.) by a defined percentage depending on the donation’s purpose.

Brackets and percentages

Overall cap: the total of all donations under Art. 22 cannot exceed 65% of the aggregate annual tax bases.

Example — individual donor

Maria has an annual tax base of EUR 30,000 from employment and rental. In 2025 she made:

• EUR 1,000 donation to a children’s hospital (5% bracket): allowed up to EUR 1,500 (5% × 30,000) — fully recognised;
• EUR 3,000 donation to assisted reproduction (50% bracket): allowed up to EUR 15,000 (50% × 30,000) — fully recognised;
• EUR 6,000 donation to a cultural fund under the Patronage Act (15% bracket): allowed up to EUR 4,500 (15% × 30,000) — EUR 1,500 exceeds the cap and is not allowed.

Total recognised: EUR 8,500. Reduced tax base: EUR 21,500. PIT 10% on EUR 21,500 = EUR 2,150 (instead of EUR 3,000). Saving EUR 850.

Filing

In the annual return under Art. 50 PITA, complete Schedule 10 — Tax Reliefs. Attach copies of the donation agreement, certificates evidencing the recipient’s status, and bank statements.

Legal entities — Art. 31 CITA

Art. 31 CITA permits accounting expenses for donations to be recognised for tax purposes up to a defined percentage of the positive accounting financial result — i.e. profit before corporate tax.

Brackets for legal entities

Overall cap: the total of all tax-recognised donation expenses cannot exceed 65% of the positive accounting financial result.

Example — EOOD

“Innovires EOOD” has a 2025 accounting financial result (profit) of EUR 100,000. Donations made:

• EUR 5,000 to a public-benefit NGO (10% bracket): allowed up to EUR 10,000 — fully recognised;
• EUR 12,000 to assisted reproduction (50% bracket): allowed up to EUR 50,000 — fully recognised.

Total recognised expense: EUR 17,000. Tax profit: EUR 100,000 − 17,000 = EUR 83,000. CIT 10%: EUR 8,300 (instead of EUR 10,000). Saving EUR 1,700.

Hidden distribution of profit — warning

Art. 26, items 7 and 11 CITA provide that donation expenses outside the scope of Art. 31, or to persons connected with the owner, are not recognised and constitute a hidden distribution of profit. For example: a donation to the owner-individual or a related family foundation. Re-qualification: expense disallowed + 5% “dividend” on the owner + 20% sanction under Art. 267 CITA.

Eligible recipients — “public-benefit” status

Public-benefit NGO — mandatory registration

A non-profit legal entity (foundation or association under NPLEA) qualifies as an eligible recipient only if it is registered for public-benefit activity. Registration:

• Registry at the Ministry of Justice — maintained by the Directorate “Registry of NGOs for Public-Benefit Activity”;
• Application with the statute, evidence of current bodies, public-benefit aims and activities;
• Registration deadline: up to 14 days after submission;
• No fee;
• Annual financial statements — mandatory; published in the NPO register by 30 September of the following year (Art. 38(1)(2) of the Accountancy Act).

See our article on registering a foundation.

Other qualified recipients

• Healthcare and medical institutions under the Healthcare Institutions Act and the Medical Establishments Act;
• Residential social services under the Social Services Act;
• Kindergartens, schools, HEIs, BAS — under the Pre-school and School Education Act, HEA, BAS Act;
• Municipalities and their budget entities;
• Registered religious denominations in the Directorate “Religious Denominations” at the Council of Ministers;
• Sheltered workshops and cooperatives for persons with disabilities — registered with the Disability Persons’ Agency;
• Bulgarian Red Cross;
• Social enterprises — registered with the Social Assistance Agency;
• NHIF (children’s treatment and assisted reproduction).

Foreign recipients

Since 2014, Art. 22(5) PITA and Art. 31(7) CITA allow tax relief for donations to equivalent entities registered in the EU/EEA, provided they meet the same requirements as Bulgarian recipients. Documents: legalised translation by a sworn translator, evidence of the recipient’s status under the relevant national law.

VAT consequences for donations of goods and services

For VAT-registered persons, donating goods or services triggers specific obligations under the VAT Act:

Donation of goods

Art. 6(3)(2) VAT Act — the gratuitous transfer of ownership of a good is treated as equivalent to a supply and is subject to VAT. Taxable amount: Art. 27(1) VAT Act — equal to the acquisition cost of the good, or its production cost if produced in-house.

Exclusions under Art. 9(4) VAT Act — not treated as a taxable supply:

• Donation of food products to food banks (under specific conditions);
• Donations to Bulgarian hospitals, kindergartens, schools, sheltered facilities;
• Gratuitous supplies as part of humanitarian relief in disasters.

Donation of services

Art. 9(3) VAT Act — gratuitous provision of a service is treated as a taxable supply. Taxable amount: Art. 27(2) VAT Act — the supplier’s direct costs of providing the service.

Cash donations

Cash donations — outside the scope of the VAT Act (not a supply). Subject only to Art. 22 PITA or Art. 31 CITA.

Gift tax under LTFA — on the recipient side

Art. 44 LTFA imposes tax on the acquisition of property by donation. Payer — the acquirer (recipient). Rate — a local tax set by the municipal council. For donations between unrelated third parties the rates typically range from 3.3% to 6.6%; for donations in favour of listed entities — exempt.

Exempt under Art. 48

• Recipients listed in Art. 31 CITA (i.e., the same listed organisations);
• Public-benefit NGOs;
• The State, municipalities, BAS;
• Donations between spouses and lineal relatives;
• Donations regulated by international agreement.

Non-exempt donations

A donation from a company to an individual (e.g. an employee not falling within a special bracket) may generate gift tax for the recipient under LTFA, plus PIT under certain conditions. For employee bonuses in kind — see our article on in-kind compensation.

Documents to substantiate the donation

To have the donation recognised in an NRA audit, the donor must evidence:

1. Donation agreement — in writing; for real estate — with notarial certification of signatures;
2. Evidence of the recipient’s status — certificate from the Ministry of Justice register for public-benefit status, certificate from the Disability Persons’ Agency for sheltered workshops, categorisation act for medical institutions, etc.;
3. Document evidencing receipt — bank statement, hand-over protocol for movables, transfer-of-title document for real estate;
4. Valuation — for donation of goods — market valuation by an independent appraiser (for VAT-registered persons — carrying value);
5. Patronage agreement — for the 15% bracket — registered with the Ministry of Culture;
6. Resolution of the donor’s competent body — for an EOOD/OOD, a sole-owner or general meeting resolution (for material amounts, typically above 1% of capital);
7. For foreign recipients — legalised translation by a sworn translator + confirmation of equivalent status.

Typical mistakes and abuses uncovered by the NRA

1. Donation to an NGO without “public-benefit” status — private-benefit NGOs do NOT generate relief. The NRA verifies status in the Ministry of Justice register;
2. Hidden distribution of profit — donation to a foundation controlled by the donor’s owner; re-qualified as dividend under Art. 26 CITA;
3. Above the cap — exceeding the 5%/10%/15%/50%/65% thresholds is disallowed but donors often miscalculate;
4. Donation that is in fact sponsorship (consideration received) — the NRA re-qualifies; if there are advertising / PR benefits to the donor, the expense is recognised under general rules (not Art. 31);
5. Cash donations above the threshold — Art. 3 CPRA requires a bank transfer above EUR 5,113 (BGN 10,000). See our article on CPRA in property transactions;
6. Missing banking documentation — bank transfer without a clear “donation” or “donation agreement no...” reference;
7. No execution — a signed agreement without an actual transfer;
8. Double use of the donation — a donation recognised in one spouse’s return cannot be re-claimed in the other’s.

Frequently asked questions