The whole story from A to Z is explained here!
Why is Bulgaria a tax haven and so attractive for taxes right now? And it’s about more than taxation, lol. Low wages, low social contributions, European subsidies. We can present ourselves as specialists after 15 years of experience in Bulgaria.
What does the Bulgarian tax system look like for companies?
The Bulgarian tax system is very simple. There is a 10% flat tax for all companies – no more, no less.
Can I deduct expenses in Bulgaria as a tax haven?
Yes indeed! It is not because the tax rate is only 10% that you cannot deduct professional expenses. You can deduct business expenses in a Bulgarian company like in any other country.
There is no difference from other countries in this. You pay only 10% taxes on your pure profit.
Is this going to be around?
No, this rate has been in place since 2007. Many countries neighbouring Bulgaria have low rates. Tampering with this rate is economic suicide. No political party wants to change it. Even within the EU, there is no consensus to go to one tax rate. You can read more about Bulgaria’s tax rate in this blog.
Important: In addition, since 2012, the law has stipulated that the 10% rate can only be changed with a 2/3 majority in parliament, again indicating the Bulgarian government’s strong commitment to maintaining this attractive rate!
Sometimes, 0% corporate tax
In an exceptional case, the corporate tax rate is 0%. Really, when? Some strict conditions apply, such as settling in a region with “high” unemployment.
No minimum wage
Furthermore, unlike in the Netherlands or many other countries, the director is not obligated to include a minimum wage.
What does the Bulgarian tax system look like for individuals?
Again, 10%
You pay a 10% flat tax on all your personal income, such as salary, rent, interest, and royalties. Tip: You pay only 5% on dividends.
Tip. It’s nice to know that pensions are not taxed, and there is virtually no gift or inheritance tax. The taxes are just low.
A simple example of how the system works in Bulgaria as a tax haven
Suppose you have 100 income in your Bulgarian company. If you have no expenses, you can take 100 out as salary, which is a deductible expense. So, the Bulgarian BV then has no income and pays no taxes in our example.
You, as director, pay 10% tax on your salary—better than 50% in most other Western European countries, though!
Social contributions are also a nice one. But maybe you fear that there are low taxes but high and nasty social contributions so that a piece of the tax advantage disappears. No, here, too, good news! Social contributions are calculated on a salary of about 1600 EUR. Suppose you take a salary of 10,000 EUR per month; your social contributions are still calculated on a salary of 1,600 EUR.
How can you become a taxpayer in Bulgaria tax haven?
Well, you must first become a “resident” of Bulgaria. It would help if you met several criteria; we list the main ones here.
Income
Bulgarian immigration authorities want to see that you can demonstrate a certain income. Having a Bulgarian company is sufficient, or even showing a bank card.
Interpol
Next, they will check with Interpol to ensure you are not listed internationally.
Address
You will also need an address in Bulgaria. You will have to rent or buy a flat.
Bulgaria is a great choice if you want to avoid moving to the other side of the world and staying within the EU. The 10% tax rate is stable. Moreover, there are also low wages if you want to hire people. So don’t hesitate to contact us at info@dehoon-dhp.com. We can guide you from A to Z.
