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Taxes in Bulgaria Print

Owners of a property in Bulgaria should consider the following taxes and rates payable, related to property ownership: 

 

 

Property Purchase Tax

Buying a property in Bulgaria and the transfer of owner`s rights are a subject of a transfer tax of 2%. The transfer is a subject to notary and municipal fees. The notary fees are paid on the book value of the property at varying rates, with the maximum being BGN 3, 500. In addition, 2% of the market value of the property is paid to the municipality in which the real property is situated. Municipality tax is paid when the notary deed is signed.


Local Property Taxes
Owners of real estate in Bulgaria are liable to pay an annual tax on the value of the real estate. The rate varies depending on whether the real estate is used for residential or commercial purposes. The rate for residential property is fixed by the local authorities. For commercial buildings, the rate is 0.15%. The tax is payable on the book value of the property. Agricultural land is exempt from local taxes.

 

In addition to the real property tax owners also pay waste-collection fee, as the rate for this greatly depends on the location and size of the place. The tax is payable at the beginning of each year. These taxes are usually lower in rural areas.

 

Property Income Tax
Property income tax is payable in Bulgaria on rental income from a Bulgarian property, even if the owner lives abroad and the money is paid there. 20% of the rental income is not taxed. The rest of the income is taxed at your personal income (or corporation) tax rate. If you receive rent and aren’t resident in Bulgaria for tax purposes, a 15% withholding tax is levied.

 

Corporate Income Tax
All companies and partnerships (including non-incorporated partnerships) are liable to corporate income tax on profits at the standard rate of 15%.  The tax is reportable to the tax authorities annually (by 31 March following the end of the accounting year).

 

VAT - Value Added Tax

VAT in Bulgaria is 20%. VAT is payable on assets and services in Bulgaria, as well as on imports into Bulgaria. VAT is chargeable on the sale of real estate in Bulgaria at a rate of 20%. This is usually included in the purchase price of the property. Exports from Bulgaria are exempt from VAT. Income from financial services such as insurance and banking services and legal advice are also exempt from VAT. Every business that had a turnover in excess of BGL 50,000 in the previous 12 months must register with the VAT authorities.


Tax-free incomes in Bulgaria are:

  • Income from the sale of a residential apartment and a car, subject to the terms specified in Bulgarian law.
  • Profit on the sale of securities.
  • Interest received by an individual on deposits with local commercial banks.
  • Subsidies for children paid by the State.
  • Grants given to students who are residents of Bulgaria for studies in Bulgaria and overseas.
  • Prizes from lotteries and games of change.
  • Prizes given by the State for cultural works.
  • A profit from the sale of assets received as an inheritance or a gift.
  • Work clothes and uniforms supplied free of charge to an employee.
  • Travel tickets to the place of work that are supplied to an employee by an employer.