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Does Bulgaria Tax Worldwide Income? | 2025 Guide for Expats & Business Owners
. If you’re planning to move to Bulgaria, start a business, or invest in the country, you’re likely wondering: Does Bulgaria tax worldwide income?
Let’s dive into the details and break it down clearly.
The General Rule – Tax Residency in Bulgaria
Bulgaria operates with a flat personal income tax rate of 10%, one of the lowest in the EU. However, whether Bulgaria taxes your worldwide income depends on your tax residency status.
- Bulgarian Tax Residents: If you are considered a tax resident of Bulgaria, you will be taxed on your worldwide income.
- Non-Residents: Non-residents are only taxed on their Bulgarian-sourced income.
When Are You a Bulgarian Tax Resident?
In order to be classified as a Bulgarian tax resident, you must meet one of these conditions:
- Spend more than 183 days in Bulgaria within a 12-month period, or
- Bulgaria is considered your “center of vital interests” – meaning your primary business, family, property, or economic ties are in Bulgaria.
What Does This Mean in Practice?
Here’s how it applies to different situations:
- Digital Nomads or Expats: If you spend most of the year in Bulgaria, you may be considered a Bulgarian tax resident, meaning your worldwide income will be taxable in Bulgaria.
- Business Owners Living Abroad: If you run a Bulgarian company but live abroad, only your company’s income from Bulgaria will be taxed here. Your personal worldwide income may not be subject to Bulgarian tax.
Double Tax Treaties (DTTs)
Bulgaria has over 70 double tax treaties with various countries, which help avoid double taxation. Here’s how they work:
- If you pay taxes on income abroad, you won’t be taxed twice on the same income in Bulgaria.
- The treaties allow you to use the tax paid in the foreign country to offset taxes owed in Bulgaria.
Why This Matters
Understanding your tax residency status is critical because it can significantly affect your tax obligations.
- Expats: By understanding Bulgarian tax residency rules, expats can optimize their tax situation and avoid paying unnecessary taxes.
- Business Owners: Properly structuring your business and personal income ensures that you take full advantage of Bulgaria’s 10% flat tax rate.
- Avoid Penalties: Misunderstanding tax residency rules could result in double taxation or penalties.
So, does Bulgaria tax worldwide income?
👉 Yes – but only if you are a Bulgarian tax resident. If you are not a resident, only your income from Bulgaria is taxed here.
If you are uncertain about your tax residency status or need assistance in structuring your business to minimize tax liabilities, don’t hesitate to reach out to our team at ASB Accounting Services Bulgaria. We’re here to help!