Tax system in Bulgaria
{ "Bulgaria uses a simple flat-tax model for most people and companies": "10% personal income tax, 10% corporate income tax and 5% dividend tax. There is no general net wealth tax, but local property, transfer, gift and inheritance taxes still matter." }
Payroll and social security costs can be material. Employees and employers both pay mandatory social security and health contributions, while the VAT system uses a 20% standard rate. Bulgaria also moved to the euro on 1 January 2026, and SAF-T reporting is being phased in from 2026 for larger taxpayers.
Tax rates at a glance
- Income tax
- 10%Flat
- Wealth tax
- 0%
- Inheritance tax
- Varies
- Capital gains tax
- 10%
- Corporate tax
- 10%
- Dividend tax
- 5%
- VAT
- 20%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FreelancersEmployeesInvestorsFoundersHolding companies
Watch out for
- Bulgaria is low-tax, not tax-free. Social security, health insurance, VAT, property tax, transfer tax and municipal fees can change the real cost picture.
- The tax residence test is important because Bulgarian residents are taxed on worldwide income, while non-residents are taxed mainly on Bulgarian-source income.
- 2026 compliance changes include euro-denominated filings and the start of phased SAF-T reporting for larger businesses.
Frequently asked questions
Is Bulgaria a low-tax country?
Yes. Bulgaria has a flat 10% personal income tax and 10% corporate tax, plus a 5% dividend tax. It is not tax-free because payroll contributions, VAT and local taxes still apply.
Does Bulgaria have a wealth tax?
No general net wealth tax applies in Bulgaria. However, local property tax, transfer tax and gift or inheritance tax can still apply.
Is Bulgaria good for founders and expats?
It can be, especially if you want an EU base with simple flat taxes. The key checks are tax residence, payroll social security, VAT registration and whether your structure needs the Bulgaria EOOD route.