Residence depends on several alternative connections
Bulgaria’s National Revenue Agency lists a permanent address, presence exceeding 183 days in any twelve-month period, specified overseas assignments and a Bulgarian centre of vital interests as residence connections. A permanent Bulgarian address does not establish residence where the centre of vital interests is outside Bulgaria. The latter examines family, property, work, business activity and where assets are managed.
Both entry and exit days count as days of presence; stays solely for education or medical treatment have a specific exclusion. The tax year is the calendar year, but the presence window is not simply January to December. Residents are generally taxed on Bulgarian and foreign income, while nonresidents are taxed on relevant Bulgarian-source income. Use the domestic tests and then the applicable treaty where there is a competing residence claim, rather than relying on a registration address.
A flat headline rate does not remove income classification
The general personal income-tax rate is 10% on the applicable annual taxable base, while categories such as dividends can have their own final-tax treatment. Sole-trader activity, employment, independent services, rents and investment disposals must be classified before applying a rate or expense allowance. The tax base is not always the gross bank receipt. Social and health-insurance charges are a separate layer.
For foreign income, identify source-country tax and the treaty or domestic credit method available in Bulgaria. A foreign brokerage account does not itself make all gains exempt, and a Bulgarian company does not convert the owner’s salary into a dividend. Keep contracts, dividend resolutions, acquisition costs and foreign tax statements. Model the household’s complete result, including the corporate level where applicable, rather than multiplying all personal cash received by one headline percentage.
Company profits and corporate CFC rules are separate
The ordinary corporate income-tax rate is 10%. Bulgarian resident companies are generally taxed on domestic and foreign profits, while foreign legal entities can have taxable Bulgarian permanent establishments and source-income obligations. Entity residence and treaty treatment must be assessed under the applicable definitions; this guide does not claim that any director sitting in Bulgaria automatically converts every foreign company into a Bulgarian-incorporated taxpayer.
The Corporate Income Tax Act’s CFC provisions include foreign entities and foreign establishments. The foreign-entity control test uses more than 50% of voting rights, capital or profit rights held alone or with associated enterprises, alongside the statutory low-tax comparison. Attribution, genuine-activity conditions and relief against double counting require review of Articles 47c–47e. These corporate provisions should not be casually presented as an identical personal-shareholder regime.
Evaluate an operating business, not just an incorporation
For a founder relocating activity, prepare a functional map of staff, customers, contracting, intellectual property and decision-making. Determine which company performs each function and bears the commercial risk. Related-party transactions need a supported allocation; routing invoices through a Bulgarian entity does not by itself move the underlying value or remove a foreign permanent establishment.
The departure country may tax an asset transfer or retained company profit even where Bulgaria’s ordinary rates are lower. Check the timing of personal residence, company creation and any transfer of contracts or assets before moving revenue. Maintain accounting records and a filing calendar for corporate, personal, payroll and VAT obligations. A low statutory income-tax rate can be useful, but it does not settle immigration permission, regulated activity, source taxation or treaty eligibility.
Sources & research notes4 references
Sources supporting this guide. Research draft awaiting editorial review.