Bulgaria is known for one number in tax: ten. Income tax in Bulgaria is a flat 10 per cent. A flat rate of 10 per cent on personal income is the headline, and it explains part of the country's reputation among people who work remotely or run small businesses. But a flat rate is not a free pass. Before the rate comes the question that decides everything: are you a Bulgarian tax resident?
Who is a tax resident in Bulgaria?
The National Revenue Agency (NRA) applies Article 4 of the Personal Income Tax Act, whatever your citizenship. You are a местно лице (mestno litse, local person) if you meet any one of these tests:
- you have a permanent address in Bulgaria;
- you are present in Bulgaria for more than 183 days in any 12-month period; the day you arrive and the day you leave each count as a day in Bulgaria, and a stay only for study or medical treatment does not count;
- your centre of vital interests is in Bulgaria, judged by family, property, where you work or run a business and where you manage your assets.
The agency adds one nuance: a person with a permanent address in Bulgaria can still be a foreign person if the centre of vital interests is elsewhere. When two countries both consider you resident, the double taxation treaty between them settles it. The NRA publishes the list of Bulgaria's treaties: check that one exists with your country, and what it says, before relying on it.
What is the Bulgaria income tax rate?
In 2026 the NRA gives these rates:
- 10% of the annual tax base for personal income (employment, freelance work, rent);
- 15% for sole traders (the ЕТ, едноличен търговец);
- 5% on dividends.
As a resident you are taxed on income from all over the world, and the treaty prevents double taxation but does not remove the duty to declare. This is why the 10 per cent is a starting point for a calculation, not an answer. Your home country may keep some taxing rights, and social contributions are separate; see working in Bulgaria and freelancing and starting a business in Bulgaria.
Do you have to file a tax return?
If you are an employee with a single salary and claim no relief, your employer withholds the tax each month and you generally have no return to file. You do need to file the annual return (годишна данъчна декларация) between 10 January and 30 April of the following year if you have other income: rent, the sale of a property, foreign income, freelance activity, or if you want to claim reliefs. Sole traders file between 1 March and 30 June.
For foreign dividends you declare and pay the 5 per cent by 30 April of the following year. Bulgarian dividends are taxed at source by the company.
Tax residence is the point where people most often guess, and guessing is expensive. Moovy can walk you through the three tests with your own dates and family situation, and tell you what to ask a Bulgarian or home-country tax adviser. It does not file anything or give tax advice in your place.
What is the 5% early-filing discount?
If you file your return online by 31 March of the following year, owe no public debt under enforced collection and pay any balance due by 31 March, you get a 5 per cent discount on the tax remaining to pay. It is capped at 255.65 euros (500 leva), as stated on the NRA page and in Article 53(6) of the Act. Note the date: the discount is tied to 31 March, not to the 30 April return deadline.
How do you file?
You file online on the NRA portal with a qualified electronic signature or a personal code (PIK) that you collect in person. See Bulgarian administration online. You also need your identifier, the LNCh or NRA service number, explained in the Bulgaria LNCh number guide.
What income tax in Bulgaria mistakes should new residents avoid?
- Believing a permanent address always makes you resident. Not if your centre of vital interests is elsewhere.
- Forgetting foreign income. A resident declares worldwide income.
- Missing the discount date. It is 31 March, filed online, with payment.
- Confusing the ET with a freelancer. The sole trader pays 15 per cent with its own deadlines; the freelancer stays at 10 per cent.
- Assuming that your residence certificate decides your tax status. It does not.
How does income tax in Bulgaria treat different kinds of income?
The flat rate is the same for most personal income, but the way each type is declared differs. Employment income is taxed by the employer month by month. Freelance income is declared by you, with quarterly advances for freelancers, after flat-rate expenses of 25 per cent (40 per cent for certain activities). Rental income and the sale of property go through the annual return. Dividends have their own 5 per cent tax, and a sole trader (ET) pays 15 per cent under a separate return and calendar.
The upshot is that income tax in Bulgaria is simple to state and fiddly to apply. The more types of income you have, the more it is worth speaking to an accountant who knows both Bulgarian rules and your home country's.
What does the permanent address test really mean?
Many newcomers assume that renting a flat makes them tax residents. The first test looks at a permanent address (постоянен адрес) in Bulgaria, not simply at where you rent. And the law also says that a person with a permanent address can be treated as a foreign person if the centre of vital interests is elsewhere. In practice, that centre is judged by family, property, where you work or run a business, and where you manage your assets.
So a retired couple with children and a home in another country, who spend winters in Bulgaria, have a different picture from a single remote worker who sold their old flat and lives here all year. If both countries claim you as a resident, the double taxation treaty between them settles which one prevails; the NRA page points to the treaty rather than giving a formula.
How do you count the 183 days?
The law counts presence in Bulgaria over any 12-month period, counts the day of arrival and the day of departure each as a day in the country, and ignores stays solely for study or medical treatment. You become resident for the year in which your stay passes 183 days. Because the period is rolling, you should not count by calendar year only. Keep a record of entries and exits, boarding passes or tickets, and be ready to show them if asked.
If you spend 183 days or less, you may still be a resident under the other tests. The 183 days are one route, not the only one.
Residence and treaty questions depend on details of your life in two countries. Before you take a decision that depends on tax, have your situation confirmed by an accountant or a tax adviser in Bulgaria, and if needed in your home country too.
What are the practical steps in your first tax year?
- Decide with an adviser if you are likely to be resident in Bulgaria, in your home country, or in both.
- Obtain your personal identifier (LNCh or NRA service number); see the Bulgaria LNCh number guide.
- Keep documents: contracts, payslips, rent receipts and foreign income statements.
- If you have income beyond a single salary, plan to file between 10 January and 30 April, and consider the 31 March discount.
- If you become self-employed, register within seven days; see freelancing and starting a business in Bulgaria.
What about social contributions and health?
Tax is not the whole bill. Employees and the self-employed pay social and health contributions at rates fixed each year, and a person insured at home may owe nothing in Bulgaria. Check the rules for your case in healthcare in Bulgaria and working in Bulgaria.
What changes for British and other non-EU citizens?
The tax residence tests do not depend on nationality. Only the right to stay changes; see moving to Bulgaria from the UK. If you retire here, your pension may be taxed differently; see retiring in Bulgaria. The currency is now the euro, but some NRA pages still mention leva. Rates and thresholds can change each year, so check the NRA before you file your income tax in Bulgaria. A good adviser will also tell you where income tax in Bulgaria stops and your home country's tax begins.