Expatriate tax ebook - Bulgaria

Basis of taxation

Charge to tax
Residence
Income from employment
Source of employment
Benefits (in kind)
Expatriate concessions
Relief for foreign taxes
Deductions against income

Charge to tax
A charge to Bulgarian tax is dependent on whether the income arises in Bulgaria, and the extent of the charge will be determined by an individual’s tax residency status.

Residence
Exposure to Bulgarian tax will be determined by the expatriate's residence and domicile status.

Tax Residence
Tax residence in Bulgaria is determined by the expatriate's actual presence within a tax year. The Expatriate will be treated as Bulgarian tax resident where he/she spends 183 days or more in Bulgaria in any tax year.

Domicile
As mentioned above the concept of tax residence is considered in conjunction with the concept of domicile. The test for domicile is complex and based on substantial case law. Usually an individual will have a domicile in the country where they were born.

Income from employment
A Bulgarian tax charge arises on employment income derived from duties performed in Bulgaria.

Assessable employment income includes all wages, salaries, overtime pay, bonuses, gratuities, perquisites, benefits etc.

Source of employment
As mentioned above, where duties are performed in Bulgaria, any remuneration received in respect of these duties is treated as Bulgarian-source income, and subject to Bulgarian income tax regardless of the expatriate's tax residence status (subject to the relevant Double Taxation Agreement).

Benefits (in kind)
In general where the benefit is enjoyed in Bulgaria, a Bulgarian income tax charge will arise.

Expatriate concessions
Not applicable

Relief for foreign taxes
Where income has been subject to tax twice - in Bulgaria and in a foreign jurisdiction - relief can be granted by the Bulgarian Revenue Authority where provided for in the relevant Double Taxation Agreement.

Deductions against income
Certain expenses can be provided by an employer free of income tax where they qualify as wholly, exclusively and necessarily incurred in the performance of the employment duties.


Information about Bulgaria:

  • introduction
  • facts and figures
  • basis of taxation
  • what taxes?
  • tax planning opportunities

  • Last updated 18 July 2012


    Please be aware that the data included in this expatriate tax e-book is correct at the time of publication, however, we cannot guarantee that it is current at the time you are reading this. Please do not act on the information contained within this e-book without first seeking expert, professional advice.
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