How to Combine Bulgaria’s Low Taxes With Another Country’s Tax Rules – 2025 Guide
Welcome to ASB Accounting Services Bulgaria – your trusted partner for accounting, tax, and business services in Bulgaria!
In today’s video, we’ll look at how you can legally combine Bulgaria’s low tax rates with another country’s tax rules to minimize your global tax burden — all while staying fully compliant.
Why Bulgaria’s Tax System Is So Attractive
Bulgaria has:
- 10% corporate tax – one of the lowest in the EU.
- 10% personal income tax – flat rate, no progressive brackets.
- Low social security contributions compared to Western Europe.
- This makes it an excellent base for entrepreneurs, freelancers, and international companies.
The Key Idea: International Tax Planning
If you operate in more than one country, you can sometimes structure your business so that:
- Income is earned in Bulgaria (low corporate tax)
- But you still benefit from specific rules in another country – such as reduced dividend tax, better treaty benefits, or special exemptions.
How This Works in Practice
Examples include:
- Using Double Tax Treaties (DTTs): Bulgaria has treaties with over 70 countries, reducing or eliminating withholding tax on dividends, interest, and royalties.
- Residency Planning: You may be a tax resident in another country but still operate a Bulgarian company for business purposes.
- Profit Allocation: Transfer pricing rules allow legitimate cost sharing and profit distribution between group companies.
Important Compliance Points
- This is not about hiding income — it’s about optimizing legally.
- Keep clear documentation for all cross-border transactions.
- Make sure your business structure aligns with the “substance over form” principle – tax authorities want to see genuine activity in each jurisdiction.
Bulgaria’s low taxes can be a powerful part of your international tax strategy — but the key is planning it right from the start. If you want tailored advice for your business, get in touch with us at ASB Accounting Services Bulgaria.
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