In 2025, taxes in Bulgaria offer tempting numbers and the backing of a European passport, putting the country on the radar of those looking to legally optimize their tax strategy.
Talking about Bulgaria as a “low tax” jurisdiction is no longer exclusive to tax advisors or specialized forums. The topic has entered conversations among entrepreneurs, digital creators, and nomads who want to reduce their tax burden without abandoning the legal security and benefits of living within the European Union.
But beyond the attractive numbers, there’s a key question: What’s behind this “perfect formula,” and for whom does it really work? Because Bulgaria isn’t a disguised tax haven or a universal solution. It’s a tool, and like any tool, it requires knowing how to use it and fitting the right profile.
In this blog, we’ll explain taxes in Bulgaria step-by-step, detail the requirements and warnings, and most importantly, give you the strategic perspective to decide if this tax destination fits your life and your business.
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Taxes in Bulgaria explained one by one
How much you pay in taxes in Bulgaria: corporate, dividends, and special regime for content creators
On the European tax map, Bulgaria plays with numbers that make you look twice: a flat corporate tax rate of 10%, a mere 5% withholding tax when distributing profits to individuals, and a special regime for content creators that few countries dare to offer.
The latter is the real magnet for YouTubers, musicians, writers, and intellectual property professionals: you’re taxed at 10%, but with an automatic 40% deduction for expenses, which leaves a real effective tax rate of 6%. A clear opportunity for those who live from the digital economy and want tax stability within the European Union.
Apart from the above, fees for technical services—installation of fixed assets, technical consulting, or market studies—paid to non-residents are subject to a 10% withholding tax on the gross amount. However, there are double taxation treaties that allow this rate to be lowered if the structure is set up correctly from the beginning.
How much you pay in taxes in Bulgaria on real estate, inheritance, and donations
In the area of assets, Bulgaria competes in the league of Europe’s lowest taxes. The real estate tax ranges from 0.01% to 0.45% of the property’s value, depending on the municipality, accompanied by an equally reduced garbage collection fee.
On inheritance and donations, the figures are also competitive: between 0.4% and 6.6%, with total exemptions for spouses and direct relatives. A much lighter structure than in countries like Spain, France, or Germany, which makes Bulgaria a tax haven for those looking to protect and transfer assets with the lowest possible cost.
In both asset and financial matters, Bulgaria offers a tax framework that allows you to reduce your tax burden without giving up the legal security of operating within the European Union. But to avoid paying more taxes in Bulgaria, you must comply with a series of requirements.
How to avoid paying more taxes in Bulgaria
Tax residency in Bulgaria: a key requirement to access its tax benefits
To benefit from taxes in Bulgaria, it’s essential to register as a tax resident. This means spending at least 183 days a year in the country, having a home, and proving that your center of vital interests is there. Complying with the correct accounting, invoicing, and activity codes is the basis for legally paying less in taxes.
Content creators in Bulgaria: what they must do to maintain reduced taxation
The special regime for content creators demands discipline. You must register as a freelancer, accurately declare your activity, and invoice using the appropriate codes.
If you fail to comply, you will automatically switch to the general regime with a 10% tax rate, and if you also make serious errors, you could face a fine of 20% on the amount owed.
How taxes in Bulgaria benefit you
Incentives to avoid paying more taxes in Bulgaria on capital gains and European dividends
This is where you can clearly see how taxes in Bulgaria benefit you. If you align your operations with the European framework or the European Economic Area (Norway, Iceland, and Liechtenstein), the tax system gives you real leeway:
- Exempt capital gains: The sale of shares on European stock exchanges is not taxed.
- 0% withholding tax on dividends: If they come from companies registered in the EU/EEA, no additional tax is applied upon receipt.
Outside this bloc (U.S., UK, or other jurisdictions), the treatment changes: a 10% tax is applied (equivalent to the corporate tax) and, if distributed to an individual, an additional +5% is added.
This is how taxes in Bulgaria benefit you when you align your portfolio and cash flow with the European framework.
Tax advantages of the fixed parity of the Bulgarian Lev with the Euro
While other “low tax” destinations outside the Eurozone falter with every movement of the dollar or the euro, Bulgaria offers stable ground. And in the global tax game, a predictable exchange rate is as valuable as a good tax incentive.
One of the least-discussed advantages is exchange rate stability. The Bulgarian Lev (BGN) is pegged to the euro at a fixed rate: 1 EUR = 1.95583 BGN. This isn’t just a technical detail; it means there is no risk of fluctuations for those who operate in euros. Whether you are exporting services, managing an online business, or monetizing content for European clients, you won’t have to watch the currency market with fear.
Costs and Requirements to Open a Company and Avoid Paying More Taxes in Bulgaria
Establishing a company in Bulgaria is fast and affordable. A Limited Liability Company (OOD) requires a minimum capital of just 2 BGN (approx. €1), while a Joint Stock Company (AD) needs 50,000 BGN.
But be careful, Nomad: the most common mistake is thinking that the tax system in Bulgaria is a free pass without controls. These tax benefits only work if you follow the rules. Skipping formal procedures, ignoring reporting obligations, or minimizing AML controls not only cancels the incentive but also exposes you to fines, loss of tax residency, and even legal restrictions.
Compliance Warnings and Risks of Losing Benefits with Taxes in Bulgaria
Foreign Investments and Loans: Opening a company in Bulgaria is easy and cheap, but that doesn’t mean everything is a free-for-all.
If you receive a foreign investment or loan exceeding 30,000 BGN, you must register it with the National Bank within a maximum of 15 days. If the transfer is equal to or greater than that amount, you must document it in detail. Skipping this procedure can cost you penalties that exceed 20%, wiping out the tax advantages you were seeking in seconds.
Mandatory Reports to the National Bank:
In addition to timely registration, Ordinance No. 27 requires residents and freelancers to send periodic reports:
- Credits to or from non-residents that exceed 50,000 BGN.
- Securities transactions that do not go through an intermediary.
- Real estate transactions between residents and non-residents (these, every month).
Failure to do so results in formal fines and an immediate loss of key tax benefits.
AML and Due Diligence Obligations:
The Bulgarian framework, aligned with European directives, requires banks, fintechs, real estate agencies, and insurers to comply with anti-money laundering (AML) policies: verifying clients (KYC), monitoring suspicious operations, and keeping records based on risk criteria.
Ignoring this is not a minor mistake: it opens the door to severe sanctions and can limit your access to the international financial system.
Increased International Supervision: Bulgaria is on the FATF (GAFI) gray list. This is not a sanction but a focus of global surveillance. What does this mean in practice? That international banks and counterparts apply an extra filter to operations linked with Bulgaria.
Ultimately, if you do not comply with these residency and compliance obligations, far from saving money, you could end up paying additional penalties. Therefore, to avoid paying more taxes in Bulgaria depends less on the nominal rate and more on your discipline with the rules.
Taxes in Bulgaria: for whom is it really a good option… and for whom is it not?
Bulgaria is a good option if…
- You’re a content creator—a musician, writer, YouTuber, or intellectual property professional—and can take advantage of the copyright regime with an effective tax rate of 6%.
- You have a small company that operates within the European Union and you’re looking to benefit from the 0% withholding tax on European dividends.
- You need a low-cost structure to get started: with just €1 of capital, you can set up a company, as long as you maintain proper accounting, invoicing, and documentation.
Bulgaria is not for you if…
- You’re a nomad who travels constantly with no intention of spending at least 183 days a year in the country. Without this requirement, you do not qualify as a tax resident, no matter that you have a company registered there.
Conclusion: Bulgaria and the art of playing by its rules
Talking about the tax system in Bulgaria is talking about strategy, not shortcuts. The country offers tax tools that can make a difference, but only for those who know how to use them and accept their conditions.
Bulgaria is not for everyone. It is not an improvised haven or an easy shortcut; it is a board with clear rules. For those who comply with residency, reporting, and compliance, the result is simple: less tax friction and more room to grow within the European Union.
In the end, the question isn’t whether Bulgaria works, but whether you fit its model. And that answer isn’t in the law, but in your strategy.
