Managing Business Trips in Bulgaria: How to Optimize Tax Benefits

In the context of company formation in Bulgaria, the proper management of business trips is a strategic element for optimizing the tax burden. However, the deductibility of expenses related to business trips in Bulgaria is governed by precise regulations, which must be strictly followed to avoid disputes with the Bulgarian National Revenue Agency (NRA) and to maximize tax advantages. This article provides a comprehensive overview of how to plan, document, and make business trips tax-efficient while ensuring full regulatory compliance.

Mandatory Documentation for Business Trips in Bulgaria

For travel expenses to be considered tax-deductible, detailed documentation compliant with legal requirements is essential. Each document must clearly demonstrate the business purpose of the trip. The key documents required include:

• Mission Order: A written authorization issued by management, specifying the employee assigned, destination, purpose, and duration of the trip.
  
• Detailed Itinerary: A complete schedule of movements, transportation methods used, and planned professional activities.
  
• Expense Report: A detailed account of expenses incurred (accommodation, transport, meals, etc.), accompanied by original receipts or invoices.
  
• Proof of Business Purpose: For example, meeting minutes, contract excerpts, or invitations to conferences or industry events.
  
• Travel Documents: Such as boarding passes for flights or a travel sheet for car journeys, including the route, mileage, and reasons for the trip.
  

Incomplete or non-compliant documentation can compromise the tax deductibility of the expenses, potentially leading to their rejection during audits.

Read also: Guide 2025 to Asset Depreciation in Bulgaria: Rules, Methods and Tax Implications

Deductible Expenses and Limits for Business Trips in Bulgaria

Recognized deductible travel expenses fall into three main categories, each governed by specific rules:

Per Diems

Per diems cover daily expenses such as meals, local transportation, and incidental personal costs. The amount varies depending on the destination country and is set by the Regulation on Foreign Business Trips. For instance, in the Netherlands, per diems may range between €56 and €112 per day. It’s important to note that meal expenses do not need to be reported separately, as they are included in the per diem.

Accommodation Expenses

Lodging costs are generally deductible but subject to maximum limits. Again, in the Netherlands, the limit per night is €207. It is essential to check the applicable limits for each country before making reservations.

Transport Expenses

Expenses directly related to the trip are deductible, such as:

• Airfare
  
• Fuel (if using a company vehicle and proper invoices are available)
  
• Highway tolls
  
• Road usage vignettes
  
• Taxi and public transportation
  

All expenses must be traceable through valid fiscal documentation.

Registered Office and VAT Reclaim: Two Key Aspects

A frequently overlooked detail is that the business trip must start and end at the company’s registered office. If the trip begins or concludes at the employee’s home, even for professional reasons, it may not be recognized for tax purposes. This seemingly minor point is actually crucial for regulatory compliance.

Additionally, Value Added Tax (VAT) can be partially reclaimed on certain expenses such as transport and accommodation. However, this is only possible if the supplier is VAT-registered and has issued a proper invoice. Consulting a tax advisor can help you understand how and when to correctly request a refund.

Read also: Dormant Companies in Bulgaria: Updated 2025 Guide

Efficient Internal Management of Business Trips in Bulgaria

Effective internal organization is key to simplifying the management of business trips in Bulgaria and ensuring their deductibility. The following strategies can be helpful:

• Create a Clear Internal Policy: A written procedure governing business travel, accessible to all employees.
  
• Use Travel Management Software: Digital tools that simplify expense tracking and generate automated reports.
  
• Train Employees: Informational sessions on documentation and tax requirements applicable to business travel.
  

Properly managing business trips in Bulgaria represents a concrete opportunity to improve both the tax and administrative efficiency of your company. By complying with current regulations, maintaining rigorous documentation, and relying on digital tools and targeted training, you can achieve significant tax benefits and minimize the risk of audits or penalties.

If you need support in preparing documentation or managing the tax aspects of business trips in Bulgaria, you can contact Accountancy Bulgaria, a company advisor in Bulgaria offering professional and personalized assistance.