The 10% flat tax, explained for expats

Are you a Bulgarian tax resident?

Tax residents pay Bulgarian tax on their worldwide income. Non-residents only pay on income from Bulgaria. You are a tax resident if any of these apply:

You stay in Bulgaria for more than 183 days in any 12-month period.
Your centre of vital interests, meaning your family, home and main economic ties, is in Bulgaria.
You have a permanent address in Bulgaria and your centre of vital interests is here.

If you could be a tax resident in two countries, the tax treaty between them decides. Bulgaria has treaties with most countries; check yours before you move.

How different income is taxed

Type of income	How it is taxed
Salary	10%, after your social security contributions. Your employer withholds it every month
Freelance work (as an individual)	10% on income after contributions and a standard 25% expense deduction, so an effective rate of 7.5% or less
Lawyers and royalties	10% after a 40% standard deduction
Rental income	10% after a 10% standard deduction
Sole trader (ET) profit	15%
Company (EOOD/OOD) profit	10% corporate tax
Dividends	5%, unless a tax treaty lowers it

Contributions often cost more than the tax itself. Employees and employers share them through payroll. If you are self-employed, the compulsory contributions are 27.8% of your chosen insurable income (pension 14.8%, second-pillar pension 5%, health 8%), plus an optional 3.5% for sickness and maternity benefits.

Contributions are calculated on an insurable income between a minimum and a maximum. From 1 August 2026, that is €620.20 to €2,300 a month. Income above the maximum attracts no further contributions, which is why higher earners pay a lower share overall.

Deadlines

Annual tax return and payment: by 30 April of the following year.
Freelancers and the self-employed also pay advance tax every quarter.
Employees with only one salary usually don’t need to file, because the employer withholds the tax.

VAT

If your business turnover in Bulgaria passes €51,130 in a calendar year, you must register for VAT within 7 days. A draft law would raise this threshold to €75,000 from 2027. The standard VAT rate is 20%. A separate VAT registration may be needed sooner if you sell services to businesses in other EU countries: ask an accountant.

Common mistakes

Looking only at the 10% rate and forgetting social security contributions.
Assuming you stop being a tax resident at home just by moving. Your old country may still tax you.
Missing quarterly advance payments as a freelancer.

Sources

General information, not tax advice. Your situation may be different: talk to a Bulgarian accountant before making decisions.