Taxes in Bulgaria 2026: All Rates for Companies and for Founders Moving Here

In 2026 Bulgaria taxes company profits at 10% corporate tax, dividends at 5% and personal income at a flat 10% income tax; VAT is 20%. Of EUR 100,000 of profit, EUR 85,500 reaches the shareholder after corporate tax and a full payout, with no trade tax, solidarity surcharge or progressive brackets.

As of 23 October 2026. Rates and contribution bases under the laws in force in 2026; the contribution limits apply since 1 August 2026.

All 2026 rates at a glance

Tax or contribution	Rate	Due	Legal source
Corporate tax on profit	10%	return and payment by 30 June of the following year	ЗКПО (Corporate Income Tax Act)
Withholding tax on dividends to individuals	5%	by the end of the month after the quarter of payment	ЗДДФЛ (Personal Income Tax Act)
VAT, standard rate	20%	monthly by the 14th of the following month	ЗДДС (VAT Act)
VAT, reduced rate	9%	accommodation, books, baby food	Art. 66a ЗДДС
VAT, mandatory registration	from EUR 51,130 of turnover in a calendar year	apply within 7 days	Art. 96 ЗДДС
Payroll tax on employees	10%	monthly by the 25th of the following month	ЗДДФЛ
Social contributions, employer share	18.92% to 19.62%	monthly by the 25th of the following month	КСО, ЗЗО (social and health insurance)
Social contributions, employee share	13.78%	withheld, same deadline	КСО, ЗЗО
Contribution base	at most EUR 2,300 a month; at least EUR 620.20 for the self-insured, by occupation for employees	since 1 August 2026	ЗБДОО 2026 (State Social Security Budget Act)
Municipal property and vehicle tax	by value and vehicle	two instalments, 30 June and 31 October	ЗМДТ (Local Taxes and Fees Act)

For you personally: taxes after moving to Bulgaria

Income or contribution	Rate	Due
Income tax on salary, manager’s pay, freelance income	10%	annual return by 30 April of the following year
Dividends from your company	5%	withheld by the company, final
Social contributions as self-insured manager	27.8% (pension 19.8%, health 8%), sickness and maternity 3.5% optional	monthly by the 25th of the following month

These rates apply once you are tax resident in Bulgaria: after more than 183 days here within twelve months, or when the centre of your vital interests is here. If you keep a home in your previous country, the double taxation treaty decides. How that is tested is explained in The 183-Day Rule, Tax Residence and the Double Taxation Treaty; if you hold shares in a German company, read German exit tax first. What individuals pay on rent, interest and other income is in Tax Rights and Obligations for Individuals.

For 2027 the Ministry of Finance published a tax package in September 2026 that leaves these rates unchanged for ordinary companies but would raise the VAT threshold to EUR 75,000. It is still a draft; the details are in Bulgaria’s Draft 2027 Tax Package.

Corporate Tax

Corporate tax on profits is one of the main taxes that companies in Bulgaria must pay. This tax is imposed on the profit that the company has realized during a given year. In Bulgaria, the corporate tax rate is a flat 10%. This makes the country one of the most competitive in the EU regarding corporate tax.

Companies that generate profits must file an annual tax return. They should use the template provided by the National Revenue Agency (NRA) and submit it by 30 June of the following year, paying any tax due by the same date. Companies above the advance-instalment threshold also make advance payments during the year — by 15 April, 15 July and 1 December. The return reports all income, expenses, and tax reliefs that can be used.

Value Added Tax (VAT)

VAT is an indirect tax imposed on goods and services sold by companies. The VAT rate in Bulgaria is 20% for most goods and services. However, for certain categories of goods and services, a reduced VAT rate of 9% has been introduced, according to Art. 66a of the VAT Act (amended – SG, issue 102 of 2022, effective from 01.01.2023). This reduced rate applies to:

• Accommodation services are provided in hotels and similar establishments. This includes vacation accommodation and renting out spaces for campsites or caravans on the territory of the country.
• The supply of books includes both physical and electronic formats. This covers textbooks, educational books, children’s picture books for drawing or coloring, as well as periodical printed publications such as newspapers and magazines. However, this excludes publications that are entirely or mainly intended for advertising or contain video or audio-musical content.
• The supply of foods intended for babies or young children, as well as baby diapers and similar hygiene products for babies.

Companies that are VAT-registered submit a VAT return every month, by the 14th of the following month, regardless of turnover.

A company registered for VAT can deduct VAT paid on its purchases and offset it against the VAT it collects from its customers. This is an important mechanism for optimizing costs and improving the company’s liquidity.

Payroll Tax

Payroll tax is the obligation of the company to withhold and remit the income tax on salaries to the tax authorities. It is a flat 10% on gross pay after the employee’s social security contributions — Bulgaria has no progressive brackets. Withheld tax and contributions are paid by the 25th of the following month.

Companies must also pay social and health insurance contributions for their employees, which are calculated based on their salaries.

Other Taxes That May Apply to Companies:

1. Real Estate Tax – If a company owns real estate, it must pay an annual property tax. The rate of this tax depends on the value of the property and its location.
2. Vehicle Tax – If a company owns vehicles, it must pay an annual vehicle tax, which depends on the vehicle’s power and environmental characteristics.
3. Dividend Tax – If a company distributes dividends to its shareholders or partners, it must withhold 5% tax on the dividends.

Deadlines for Filing Tax Returns

The deadlines for submitting tax returns depend on the type of tax:

• Corporate Tax – The annual return must be submitted, and the tax paid, by 30 June of the following year.
• VAT Returns – These are filed monthly, by the 14th of the following month. There is no quarterly VAT return in Bulgaria.
• Payroll Tax Returns – These are filed monthly, with contributions for social and health insurance being due by the 25th of the following month.
• Local Taxes (property and vehicle tax) – Paid to the municipality in two equal instalments, by 30 June and by 31 October. Pay the whole year by 30 April and you get a 5% discount.

How to Optimize Tax Liabilities Using Legal Means

There are several legal ways in which companies can optimize their tax obligations:

1. Utilizing Tax Reliefs and Credits – Bulgaria offers various tax reliefs, such as those for investing in new equipment, research and development, and for small and medium-sized enterprises (SMEs).
2. VAT Registration – Companies that are VAT-registered can deduct the VAT paid on their purchases. They can then recover it from the tax authorities, leading to cost optimization.
3. Expense and Depreciation Planning – Proper depreciation of the company’s assets can reduce taxable profits and, consequently, the tax burden.
4. Transfer Pricing and Group Structures – Large companies with multiple subsidiaries can use transfer pricing strategies (i.e., pricing between related entities) to minimize their global tax burden.
5. Proper Expense Management – By optimizing expenses, such as reducing unnecessary administrative costs, companies can reduce the profit on which corporate tax is levied.

Conclusion

Companies in Bulgaria must be careful when managing their tax obligations to avoid penalties. They should also take advantage of all opportunities for optimization. Understanding tax liabilities and filing deadlines is crucial for successful business management.

Reduce your tax burden legally with deductible expenses. Learn how in Tax-Deductible Expenses.