Bulgarian Tax Guide

A favourable tax regime towards property ownership with some of the lowest tax rates in a European market economy. Bulgaria has 55 treaties in place for the avoidance of double taxation

Income tax: is levied in the range of 10-24%

Capital Gains tax: at 15%

Inheritance tax: 0% -5%

Local tax: 0.5% of the “official” valuation per year (this is much lower than the market value of the property)

Company Setup: €400 – 600 (this is if you go to a normal Bulgarian lawyer with a legalised translator, as opposed to a specialist English-speaking Bulgarian lawyer, which will be a lot more expensive).

Corporation Tax: Currently at 15% it makes little difference for income tax on rental income. However, it may impact capital gains, as there could be a liability at Corporate level that would not get a credit against the UK liability. There may be deferral possibilities on income using a local Company and with careful planning.

Notary Tax: 0.1%

Municipality Tax: 2% of purchase or sale price (similar to stamp duty)

VAT: 20% on the building purchase price. Land purchases are exempt from VAT. VAT registered companies can claim back the VAT on a building purchase (a process that takes between 45 and 60 days) but must have an annual turnover of €25,000 or more in order to qualify