Self-Employed Tax in Bulgaria

All you need to know about self-employed tax in Bulgaria. While a comprehensive guide, there is no better warranty for success than engaging an accountant in Bulgaria.

Self-employment has become a very popular option all around the world in recent years. The benefits of setting up an office and working with a personalized schedule are some of the benefits that professionals enjoy, but also companies have started taking advantage of this by engaging consultants and freelancers. 

The country has placed itself among the most attractive destinations for self-employed workers to settle thanks to its appealing financial law and attractive self-employed tax in Bulgaria.

In any case, there is no doubt that freelancers who want to best take advantage of Bulgaria’s positive business environment and attractive tax scheme will need to engage the services of an accounting company. And there is no better than Accountancy Bulgaria. 

With multilingual experienced accountants, Accountancy Bulgaria can tailor solutions to your business’s particular needs, from registering as a freelancer to self-employed tax reports, leaving you the time to grow your business.

Residency in Bulgaria for self-employed

There are a wide variety of reasons to decide to move your tax residency to Bulgaria. Some may be enchanted by the country’s landscape, history, architecture, or rich culture. These can be on top of the attractive chance professionals have to maximize their profits and reduce costs, thanks to the self-employed Tax in Bulgaria.

To take advantage of the Self-Employed Tax in Bulgaria, which is a 10% flat rate of tax on income, a self-employed worker must be a resident. 

The requirements to apply for residence permit in Bulgaria in order to benefit from self-employed tax, vary depending on your country of origin. For European citizens, the steps are a bit easier, as Bulgaria is part of the European Union. For non-EU foreigners, it may take a few more steps, but it may prove a wise decision, as having a Bulgarian residency can open doors in the European market.

In general terms a Bulgarian tax residency is someone that:

• Has a permanent address in Bulgaria,
• Resides in Bulgaria for at least 183 days in a year,
• Lives abroad sent by the Bulgarian government, and their families.

Read also: Bulgaria Flat Tax: how does it work?

How much is self-employed tax in Bulgaria?

Self-employed tax in Bulgaria is 10% flat rate. The taxable amount is the income left after deductions for operational expenses and social security contributions. 

It is particularly interesting for self-employed workers the fact that operational expenses are calculated as 25% of the total income generated. These expenses refer to work-related costs that are directly related to the operations of the business. Therefore, the self-employed tax of 10% is applied to the 75% of the total income the freelancer has created.

Another aspect to mention when talking about self-employed tax in Bulgaria is the social security contributions, which are also determined after deducting the 25% of operational expenses. Freelancers, as they are their own employers, must pay their own contributions in case of injury or disability. There are a few options regarding the social security plan a self-employed worker may choose (including general illness and maternity leave for example).

How to pay Self-employed tax in Bulgaria?

Self-employed tax in Bulgaria must be paid every quarter. Annual reports are required as well.

As we have mentioned, the self-employed tax in Bulgaria is a flat rate of 10% on the income generated from their freelancer activities (after operational expenses and social security contributions). 

You need an accountant as a self-employed worker in Bulgaria

In order to benefit from the self-employed tax in Bulgaria, freelancers must engage the services of a trustworthy accounting company. 

If you are looking for a reputable company, with years of experience and the necessary flexibility to deal with the specific needs of your business, Accountancy Bulgaria is the right option for you. Not only will they be able to advise on the whole process of registering as a self-employed professional in Bulgaria, but can tailor their accounting services to your needs. Regardless of how much you may think taxes are simple in Bulgaria, engaging the services of Accountancy Bulgaria will let you better spend your time in your business growth.

Read also: Sole proprietorship in Bulgaria: Tips, Pros & Cons

Conclusion

For those interested in taking advantage of the self-employed tax in Bulgaria, the first step is to become a resident. Once that’s settled, you can benefit from the Bulgarian tax scheme, the flat rate of 10% on income tax.

In order to best take advantage of the self-employed tax in Bulgaria, it is a must to engage the services of an accountant company, being Accountancy Bulgaria our number one preference, thanks to its many years of experience, excellent customer service, and tailored accounting solutions.