Capital Gains from Shares and ETFs — Reporting by Bulgarian Individuals (2026)

Who this article covers

This article explains how individuals resident in Bulgaria for tax purposes (within the meaning of Art. 4 ZDDFL) report and pay tax on gains realised from trading financial instruments — shares, exchange-traded funds (ETFs), contracts for difference (CFDs), derivatives and bonds.

It is written for:

• Individual investors using brokerage platforms (IBKR, Trading 212, eToro, Degiro, Revolut Trading)
• Holders of UCITS ETFs and other collective investment schemes
• Investors trading through Bulgarian intermediaries (Elana, Karoll, UBB Trader)
• Participants on the Bulgarian Stock Exchange and other EU/EEA regulated markets

Outside the scope: dividends (covered in a separate article — see "Related articles"), income of sole traders from securities dealing (Art. 26 ZDDFL — different regime), professional traders operating under a patent and legal entities (taxed under ZKPO).

What counts as "shares" and "financial instruments" under ZDDFL

ZDDFL does not distinguish between sub-types of shares — the treatment is the same whether:

• Ordinary shares with voting rights
• Preferred shares (no voting rights, guaranteed dividend)
• Shares of a public company or a private company
• Depositary receipts (ADRs, GDRs) — certificates of ownership of foreign shares

In addition, Art. 33 ZDDFL covers equivalent financial instruments, including contracts for difference (CFDs) and derivatives on shares or indices. This means that gains from short positions or leverage on IBKR are taxed under the same rules.

ETFs — structural nuances

The treatment of exchange-traded funds depends on their legal form:

• Investment corporation ETFs (e.g. iShares Ireland plc, SPDR) are treated as shares in a company. Gains fall under Art. 33 and, where applicable, Art. 13 ZDDFL for EU-regulated markets.
• Alternative / common contractual funds — units are treated as participations in a collective scheme. The exemption regime applies similarly, provided the fund is admitted to an EU/EEA regulated market.

Important: dividends distributed by an ETF are separately taxable (5% under Art. 46(3) ZDDFL). The Art. 13 exemption covers only capital gains from disposal transactions, not distributions.

The key exemption: Art. 13(1)(3) ZDDFL

The central question for any Bulgarian investor is whether the gain falls within the exemption for transactions on a regulated market. The rule is clear: income from disposals of shares carried out on a regulated market within the meaning of Art. 152(1) and (2) of the Markets in Financial Instruments Act (ZPFI) is not taxable.

What is a "regulated market"

Under ZPFI, regulated markets are multilateral systems licensed and registered in an EU or EEA Member State. The list of all regulated markets is maintained centrally by the European Securities and Markets Authority (ESMA) and is publicly available in the ESMA Register.

Key: not every exchange in the EU automatically qualifies as a regulated market. Certain alternative segments (MTF, OTF) and "growth markets" fall outside Art. 152 ZPFI. Before relying on the exemption, verify the specific venue in the ESMA register.

What is NOT an EU regulated market

• London Stock Exchange (LSE) — following Brexit (01.01.2021) the UK is a third country. LSE-listed shares do not benefit from the exemption.
• US exchanges (Nasdaq, NYSE, CBOE) — the US has never been part of the EU/EEA. Gains are taxable.
• SIX Swiss Exchange — Switzerland is not in the EEA; the equivalence agreement lapsed in 2019.
• OTC transactions and private disposals — taxable regardless of jurisdiction.

Practical table — venue by venue

Practical tip: when a share is dual-listed on several exchanges, what matters is the venue where the trade was executed, not the issuer's country of registration. SAP shares, for example, trade on Xetra (EU — exempt) and on NYSE (US — taxable).

Computing the tax base

Where the gain is taxable (e.g. from US shares), the computation is as follows:

1. Determine gross gain: sale price minus acquisition price minus direct transaction costs (broker commissions).
2. Aggregate all trades for the calendar year. The NRA accepts a weighted-average cost method for partial disposals (FIFO is also acceptable if applied consistently).
3. Deduct 10% normative expenses (NPR) under Art. 33(5) ZDDFL (effective from 01.01.2024).
4. Apply the 10% rate to the remainder. Effective rate: 10% × 90% = 9%.

Losses: under Art. 33(6) ZDDFL, losses on financial instruments cannot be carried forward. They may offset gains only within the same calendar year.

Numerical example — trading Nasdaq in 2026

A Bulgarian resident individual buys and sells Microsoft shares during 2026 via Interactive Brokers:

• 01.02.2026: buys 2 shares at USD 400 = USD 800. ECB rate: 1 EUR = 1.06 USD → EUR 755
• 15.05.2026: buys 3 shares at USD 450 = USD 1,350. Rate: 1 EUR = 1.08 USD → EUR 1,250
• Weighted-average acquisition price for 5 shares: EUR (755 + 1,250) / 5 = EUR 401 per share
• 20.10.2026: sells all 5 shares for USD 2,750. Rate: 1 EUR = 1.09 USD → EUR 2,523
• Gross gain: EUR 2,523 − 5 × EUR 401 = EUR 518
• 10% NPR: EUR 52
• Taxable base: EUR 466
• Tax due (10%): EUR 47
• Effective rate: 47 / 518 ≈ 9%

The same logic applies if you trade CFDs or derivatives on a foreign platform.

Currency conversion — the correct approach

Since Bulgaria's accession to the euro area on 01.01.2026, the EUR/BGN rate is locked at 1.95583. Internal tax declarations are filed in EUR (or in BGN for periods up to 31.12.2025).

For transactions in other currencies (USD, GBP, CHF, JPY) the following rules apply:

• BNB reference rate as of the date of each transaction (purchase or sale). Rates are published at bnb.bg.
• For currencies outside the BNB list — cross-rate via USD or EUR.
• Annual average rates, close-of-day or fair-value conversions are not accepted for filing purposes.

Practical tip: most brokers (IBKR, Trading 212) issue annual statements in USD/EUR, but this does not release you from the duty to convert each trade individually at the BNB rate. A simple Excel model with three columns (date, USD amount, BNB rate on that date, EUR equivalent) is the easiest approach.

CFDs, derivatives and margin trading

Contracts for difference (CFDs) and other derivative products do NOT confer ownership of the underlying asset — you do not hold the share, you have a contractual claim against the broker.

Tax treatment:

• Treated as financial assets under Art. 33(3) ZDDFL — 10% tax, 9% effective rate after the NPR.
• The Art. 13(1)(3) exemption does NOT apply to CFDs, even if the underlying is an EU share. The CFD trade is not a transaction "on a regulated market" — it is an OTC contract with the broker.
• This also applies to products offered by Trading 212, eToro and Plus500 — even when you "buy a Xetra share" via CFD, the gain is taxable.

The same regime applies to futures, options (outside ESOP), FX trades and CFDs on indices.

Reporting — Annex 5 and deadlines

Capital gains are reported on the annual tax return under Art. 50 ZDDFL, using:

• Annex 5, Table 2 — income from sales of financial assets
• Income type code: 508 — capital gains from disposals of shares and participations

Deadline: by 30 April of the year following the year in which the income was realised (Art. 53(1) ZDDFL). For income earned in 2025, the return is due by 30 April 2026.

Supporting documents

• Annual broker statements (IBKR, eToro, Trading 212 all provide one)
• Trade log for the year — date, ISIN, quantity, currency, price
• FX conversion schedule based on BNB rates
• Proof of paid commissions and fees

E-filing discount

Electronic filing and full payment by 31 March entitle you to a 5% discount on the tax due, capped at EUR 256 (Art. 53(6) ZDDFL). Filing is done through the NRA portal using a PIK or qualified electronic signature.

BNB statistical reporting

If you invest directly in foreign financial instruments without a local investment intermediary and the position exceeds EUR 25,000, a separate СПБ-8 declaration is due to the Bulgarian National Bank under BNB Ordinance No. 27. This is independent from the tax return.

Common mistakes in practice

• Wrong method for acquisition cost. When you have multiple purchases of the same ISIN, the NRA accepts weighted-average cost; FIFO is also acceptable but must be applied consistently — the two cannot be mixed within a single year.
• Skipping FX conversion at trade date. Some investors convert full-year gains at the 31 December rate — this is incorrect and creates discrepancies with NRA data.
• Not reporting losses. Even a loss year should be reported, so that losses can offset gains within the same year. No carry-forward is available.
• Misunderstanding the exemption. Investors often assume that any EU share is exempt — not so: the venue of the trade is what matters, not the issuer's country.
• Splitting trades among family members without genuine ownership. The NRA can re-characterise the arrangement and assess tax under the Tax and Social Insurance Procedure Code (DOPK).
• Reclassification to sole-trader / business activity. Below 5–10 trades a year there is no risk; systematic and professional trading may be treated as business income (Art. 29a ZDDFL) at a 15% corporate rate.

Penalties for non-filing or inaccurate returns

The NRA statute of limitations for assessments is 5 years (Art. 171 DOPK), with an absolute limit of 10 years. When the NRA identifies a mismatch through automatic information exchange (CRS/DAC2), the process typically starts with reconciliation against broker statements.

Important: Bulgaria receives data automatically from all EU Member States and most third countries (US via FATCA analogue, UK, Switzerland). There is a real probability of identifying undeclared brokerage accounts.

Frequently asked questions