Key Benefits

Bulgaria is a European jurisdiction with one of the lowest corporate tax rates in the Eurozone area, i.e. 10%. Despite its low tax rate, Bulgaria is still included in the white lists of the FATF, the OECD and the former Soviet Union countries.

Key benefits of company formation in Bulgaria:

  • The procedure of company formation in Bulgaria is rather straight forward. One Director and Shareholder can form a company in Bulgaria. There are no restrictions for foreigners acting as a Director or a Shareholder in a Bulgarian company.
  • Extremely low income tax rate of 10%.
  • There is a favourable tax regime for Bulgarian holding companies and no tax on dividends received from Bulgarian companies or any EU subsidiary companies. The dividends received from the subsidiary companies are subject to a 10% tax rate.
  • Bulgaria has double taxation agreements with more than 40 countries.

Tax Regulations in Bulgaria

  • Income tax on legal entities (Corporate tax).
  • Companies registered in Bulgaria are obliged to pay income tax from their worldwide income. In particular, the following types of income are taxed:
  • Trade profit.
  • Dividends, excluding dividends received from Bulgarian or European companies.

Capital Gains Tax in Bulgaria

Capital gain tax in Bulgaria is imposed at 10% rate.

Source tax

The following payments are subject to 10% tax:

• Royalty.

• Interests paid to nonresidents.

• Dividends paid to nonresidents.

• Service fees (consulting, marketing and other similar fees) paid to nonresidents.

VAT (VAT)

VAT for companies in Bulgaria is imposed according to European Union directives on a VAT rate, i.e. at 20%.

Key benefits of company formation in Bulgaria:

·         The procedure of company formation in Bulgaria is rather straight forward. One Director and Shareholder can form a company in Bulgaria. There are no restrictions for foreigners acting as a Director or a Shareholder in a Bulgarian company.

·         Extremely low income tax rate of 10%.

·         There is a favourable tax regime for Bulgarian holding companies and no tax on dividends received from Bulgarian companies or any EU subsidiary companies. The dividends received from the subsidiary companies are subject to a 10% tax rate.

·         Bulgaria has double taxation agreements with more than 40 countries.

 

Tax Regulations in Bulgaria

Income tax on legal entities (Corporate tax).

Companies registered in Bulgaria are obliged to pay income tax from their worldwide income. In particular, the following types of income are taxed:

• Trade profit.

• Dividends, excluding dividends received from Bulgarian or European companies.

Capital Gains Tax in Bulgaria

Capital gain tax in Bulgaria is imposed at 10% rate.

Source tax

The following payments are subject to 10% tax:

• Royalty.

• Interests paid to nonresidents.

• Dividends paid to nonresidents.

• Service fees (consulting, marketing and other similar fees) paid to nonresidents.

VAT (VAT)

VAT for companies in Bulgaria is imposed according to European Union directives on a VAT rate, i.e. at 20%.

 

Take the next step, we are here to help.

Register a Bulgaria company.
Open a Bulgaria bank account.

  Resources:

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The terms of Hong Kong's new register of significant controllers and what it means for companies

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The UK Persons of Significant Control Register & its impact on companies

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Cyprus implements the Hague Convention, legally recognising Trusts as a type of Equitable Law

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