Unpaid Loans Above EUR 5,113 — When and How to Disclose Them to the NRA (2026)

Q: Do I have to declare a loan from a bank?

No. Loans from credit institutions — banks, licensed non-bank financial institutions, and fast-loan companies registered with the BNB under ЗКИ and ЗКНИП — are excluded from the disclosure obligation under Art. 50 para 1 item 5 ЗДДФЛ. This covers mortgages, consumer loans, overdrafts, leasing and credit cards.

Q: How much does non-disclosure of a loan cost?

The fine is 10% of the undeclared amounts for a first offence and 15% for a repeat offence (within one year), with a minimum of EUR 256 (BGN 500). Example: an undeclared loan of EUR 15,000 results in a fine of EUR 1,500.

Q: Do I declare interest on loans?

Yes. Interest received on loans is subject to a final 10% tax under Art. 46 ЗДДФЛ and is declared separately in the relevant annex of the annual tax return (ГДД). For interest-free loans between related parties, the NRA may impute market-rate interest and tax the notional income.

Q: What happens when I sell an asset bought with borrowed funds?

The sale is declared separately as a disposal of property — with the resulting tax regime. The loan remains a separate disclosure obligation in Annex №11 until it is fully repaid, regardless of what happens to the purchased asset.

Who is obligated to declare

The obligation arises under Art. 50 para 1 item 5 of the Personal Income Tax Act (ЗДДФЛ) and applies exclusively to individuals who are tax-liable persons in Bulgaria. Who are these persons?

Bulgarian tax residents within the meaning of Art. 4 ЗДДФЛ — individuals with a permanent address in the country, with a centre of vital interests in Bulgaria, or with a stay of more than 183 days within a 12-month period.
Sole traders (ЕТ) — the obligation applies to them both as individuals and in connection with their commercial activity.
Self-insured persons (freelance professions, agricultural producers, etc.) — treated as individuals under the law.

Which loans are subject to disclosure

Monetary loans are covered — both in Bulgarian leva and in foreign currency. The obligation does not depend on whether the loan bears interest or is interest-free, nor on its form (written or oral).

Exceptions — loans that are not declared

Loans from credit institutions — banks licensed by the Bulgarian National Bank (BNB).
Loans from licensed non-bank financial institutions, entered in the BNB registers under the Credit Institutions Act (ЗКИ) and the Residential Real Estate Consumer Credits Act (ЗКНИП), as well as fast-loan companies duly registered with BNB.

This practical exemption covers mortgage, consumer, overdraft and leasing relationships with regulated financial entities. All other loans — from relatives, friends, counterparties, private investors — fall within the scope of the obligation if they exceed the thresholds.

The two thresholds — when the obligation arises

The law introduces two separate thresholds that operate independently. It is enough to cross one of them for the disclosure obligation to arise.

Threshold	Amount	Period	Scope
Annual	EUR 5,113 (BGN 10,000)	One calendar year	Unpaid balance as of 31 December
Cumulative	EUR 20,452 (BGN 40,000)	Current + previous 5 years	Total unpaid balance

How the threshold is calculated

Key point: the sum of all loans is considered, not each individual transaction. If during the year you received three loans — EUR 2,000 each (total EUR 6,000), which remain unpaid as of 31 December — the annual threshold is crossed and declaration is mandatory for the full amount.

In addition, loans received and loans provided are added up separately. If you received EUR 4,000 and provided EUR 6,000, the obligation is triggered only for the loans provided (because they exceed the threshold), while those received are not declared.

Example of the cumulative threshold

Imagine the following: in 2021 you received a loan of EUR 5,000, in 2023 — another EUR 8,000, and in 2025 — EUR 9,000. As of 31.12.2025 the unpaid balances are EUR 3,000, EUR 6,000 and EUR 9,000 respectively — a total of EUR 18,000. This does not exceed EUR 20,452, so the cumulative threshold is not reached. However, if during 2026 you receive a new loan of EUR 5,000, the total becomes EUR 23,000 — above the threshold, and an obligation arises to declare all unpaid balances.

Loans received — what to bear in mind

For loans received, the unpaid portion as of 31 December of the relevant calendar year is declared. The scope covers all forms of lending relationships with private persons and non-bank entities:

Loans from relatives — parents, spouse, siblings, children.
Loans from friends and close contacts, regardless of whether they are documented by a written contract.
Loans from counterparties — commercial partners, suppliers, clients.
Loans from private investors and other natural or legal persons that are not regulated credit institutions.

Important: even when the loan is concluded orally, the disclosure obligation under Art. 50 ЗДДФЛ remains. Bulgarian law allows oral loan agreements between individuals, but for tax purposes the statutory duty does not depend on the form.

Practical recommendation: always prepare a written loan agreement, even when the lender is a close relative. A written form makes it easier to prove the loan before the NRA and to defend your position in any subsequent court dispute.

Loans provided — a symmetrical obligation

The obligation also works in the opposite direction. If you are the lender and have provided a loan above EUR 5,113 that remains unpaid as of 31 December, you must also declare it.

Special attention is required for the loan to your own company scenario — an EOOD, OOD or another company in which you participate as a shareholder. If, as an individual, you grant a monetary loan to your company, the disclosure obligation under Art. 50 para 1 item 5 ЗДДФЛ applies when the thresholds are crossed.

Risks of non-declaration

In addition to the penalty under Art. 80a ЗДДФЛ, there are other negative consequences for the borrowing company:

Reclassification as a capital contribution — where repayment is continuously absent and documentation is missing, the NRA may treat the amount as an additional cash contribution or even as hidden financing.
Hidden profit distribution — in the reverse situation, where the company lends to a shareholder who does not repay, there is a risk of reclassification as a hidden profit distribution taxed at 15% (10% corporate + 5% dividend).
Market-rate interest accrual — for interest-free loans between related parties, the NRA may impute market-rate interest with subsequent taxation.

Filling out Annex №11 to the annual tax return (ГДД)

Disclosure is made through Annex №11 (Приложение №11) to the annual tax return under Art. 50 ЗДДФЛ. The filing deadline is 30 April of the year following the reporting year.

The four parts of the Annex

Part I — Loans received during the year (current).
Part II — Loans provided during the year (current).
Part III — Unpaid balances of loans received in the previous 5 years.
Part IV — Unpaid balances of loans provided in the previous 5 years.

Mandatory data for each loan

Name and identifier of the lender/borrower (EGN for individuals, EIK for companies).
Date of conclusion of the loan.
Initial amount of the loan.
Unpaid portion as of 31 December of the reporting year.
Currency — for loans in foreign currency, the BNB exchange rate as of 31 December applies for conversion.

The annual tax return (ГДД) and Annex №11 are filed electronically via the NRA portal using a qualified electronic signature (КЕП) or PIN code (ПИК), or on paper at the territorial directorate of the permanent address.

Penalties for non-disclosure

The penalty provision is Art. 80a ЗДДФЛ and provides for a proportional fine based on the undeclared amounts.

Case	Fine amount	Minimum
First offence	10% of the undeclared amounts	EUR 256 (BGN 500)
Repeat offence (within 1 year)	15% of the undeclared amounts	EUR 256 (BGN 500)

Limitation period

Under Art. 171 ДОПК (Tax Procedure Code), public obligations, including administrative penalties under ЗДДФЛ, expire upon the lapse of a 5-year limitation period, counted from 1 January of the year following the year in which the deadline for filing the declaration expired. The absolute limitation period is 10 years.

In practice this means that the NRA may establish and sanction undeclared loans for up to 5 years back. For a declaration with a deadline of 30.04.2026, the limitation period starts on 01.01.2027 and ends on 31.12.2031.

Why declaring is in your interest — 3 practical scenarios

Beyond the risk of a fine, declaring loans also has a tangible protective function. Here are three typical situations in which a correctly filed annual tax return (ГДД) helps significantly.

Scenario 1: NRA audit on the origin of funds

When purchasing an expensive asset — real estate, a luxury car, a stake in a company — the NRA often examines the origin of the funds. The legal basis lies in Art. 122 and Art. 123 ДОПК: where a person's asset position significantly exceeds declared income, a presumption of concealed income arises. The NRA may carry out a revision by analogy and determine the tax base using indirect criteria.

In this situation, a loan declared in the annual tax return is strong evidence that the funds come from a legitimate and transparent source. Without declaration, the individual bears the burden of proof and is exposed to taxation by analogy with additional tax, interest and fines.

Scenario 2: Court dispute with a debtor

If you have provided a loan and the debtor is not repaying, a declared loan is official evidence with a presumption of reliability in any litigation. This is particularly significant for cash loans without a bank transfer — where the usual evidence (statements) is absent.

The annual tax return is a document with established legal force, signed using a qualified electronic signature (КЕП) or PIN code (ПИК) before the NRA, and the court treats it as reliable evidence of the existence and terms of the loan.

Scenario 3: Reclassification of a loan as a gift

A common dispute with the NRA arises when a loan remains unpaid for many years without repayment. In such cases, the authority may reclassify it as a gift and apply the corresponding tax regime:

Between spouses and lineal relatives — exempt from tax.
Between siblings and their children — 0.4%-0.8% local tax.
Between other persons — 3.3%-6.6% local tax (set by the municipality).

For a detailed analysis, see our article on the Bulgarian gift tax. Declaring the loan supports its classification as a loan and makes reclassification by the NRA more difficult.

Frequently asked questions

Do I have to declare a loan from a bank?

No. Loans from credit institutions — banks, licensed non-bank financial institutions, and fast-loan companies registered with the BNB under ЗКИ and ЗКНИП — are excluded from the disclosure obligation under Art. 50 para 1 item 5 ЗДДФЛ. This covers mortgages, consumer loans, overdrafts, leasing and credit cards.

How much does non-disclosure of a loan cost?

The fine is 10% of the undeclared amounts for a first offence and 15% for a repeat offence (within one year), with a minimum of EUR 256 (BGN 500). Example: an undeclared loan of EUR 15,000 results in a fine of EUR 1,500. For a repeat offence of the same size — EUR 2,250.

Is a written loan agreement mandatory?

Under the Bulgarian Obligations and Contracts Act, the written form is not a condition for the validity of a loan between individuals — an oral agreement is also valid. For tax purposes, however, a written form is strongly recommended: without a written agreement, it is difficult to prove the existence, date and terms of the loan before the NRA or a court. The minimum content includes parties, amount, repayment term and signatures.

A loan to my own company — is it declared?

Yes. If, as an individual, you provide a loan to your own EOOD or OOD, you declare it in Annex №11 to the annual tax return (ГДД) once the thresholds are reached. In parallel, the company records the loan in its books as a liability. Prolonged non-repayment may lead to reclassification by the NRA as a capital contribution or to the imputation of market-rate interest for related parties.

Do I declare interest on loans?

Yes. Interest received on loans is subject to a final 10% tax under Art. 46 ЗДДФЛ and is declared separately in the relevant annex of the annual tax return (ГДД). For interest-free loans between related parties, the NRA may impute market-rate interest and tax the notional income. The market rate is determined by reference to comparable banking conditions at the time of conclusion.

What happens when I sell an asset bought with borrowed funds?

If you have purchased real estate with borrowed funds and later sell it, the sale is declared separately as a disposal of property — with the resulting tax regime (exemption under certain conditions for a residential property, 10% taxation of the capital gain in other cases). The loan remains a separate disclosure obligation in Annex №11 until it is fully repaid, regardless of what happens to the purchased asset.

Loans in foreign currency — how do I declare them?

The amounts are converted into euro (or Bulgarian leva) at the central BNB rate as of 31 December of the reporting year. The initial amount of the loan may be presented in the currency of conclusion, but the unpaid balance that determines whether the threshold is crossed is calculated in euro/leva at year-end.

If the loan has been repaid during the year — do I still declare it?

No. Disclosure under Art. 50 para 1 item 5 ЗДДФЛ covers only the unpaid portion as of 31 December. If you received a loan in January and repaid it in full by December of the same year, there is no obligation to declare it, regardless of the amount. The same applies to loans you have provided that are repaid within the year.