Taxation of Trading in Bulgaria: 2025 Fiscal Guide for Private Investors and Companies

In the context,start a company in Bulgaria, understanding the tax treatment of trading activities involving financial instruments such as stocks, bonds, derivatives, and foreign currencies is essential. Bulgarian legislation clearly distinguishes between natural persons and legal entities, applying specific fiscal rules to each category.

This guide offers a comprehensive overview of the current tax framework as of 2025, based on the VAT Act, the Personal Income Tax Act (PITA), and the Corporate Income Tax Act (CITA), as well as the Commercial Code and applicable international tax treaties. The aim is to provide a practical reference for private traders, professional investors, and companies operating in the Bulgarian financial market.

VAT and Financial Instruments: Generally Exempt Transactions

According to Article 46(1) of the Bulgarian VAT Act, transactions involving financial instruments—as defined by the Financial Instruments Market Act—are considered VAT-exempt. This means that trading stocks, bonds, options, futures, and other derivatives is not subject to standard value-added tax.

However, if trading is the principal economic activity of a person or company and generates revenue exceeding BGN 166,000 over a rolling 12-month period (as of January 1, 2025), VAT registration becomes mandatory. In such cases, the person is classified as a “trader” under the Commercial Code and must comply with all associated obligations, including regular VAT returns.

Taxation of Financial Income for Natural Persons

Individuals earning income from trading financial instruments must declare it in their annual income tax return, which must be filed by April 30 of the following year. Taxes due must be paid by the same deadline. If income was previously taxed abroad, a tax credit may be applied in Bulgaria under the relevant double tax treaty.

It’s worth noting that gains from the sale of financial instruments listed on regulated markets in the EU or EEA are exempt from taxation in Bulgaria (Article 13(1), point 3 of PITA). In contrast, gains from non-regulated or non-EU markets are subject to taxation.

Taxation of Trading in Bulgaria: Stocks

Taxable income from stock trading is calculated as the net gain: the sum of all profits minus losses for the same tax year. Each transaction must be declared separately, with gain or loss calculated as the positive difference between the sale and purchase prices. A 10% tax rate applies, but a flat 10% deductible is allowed for expenses, reducing the effective tax rate to 9%. If the purchase price cannot be documented, it is assumed to be zero, and the full sale amount is taxed.

Read also: Employment Contract in Bulgaria: A Guide to Current Legislation

Taxation of Trading in Bulgaria: Bonds and Debt Instruments

The taxation rules for bonds mirror those for stocks. Profits are taxed at 10%, with the same 10% flat deductible, resulting in an effective rate of 9%. Losses can be offset against gains within the same fiscal year.

Taxation of Trading in Bulgaria: Derivatives and Complex Instruments

Futures, options, swaps, forward contracts, and similar instruments are taxed in the same manner. Tax is due only upon execution of a transaction—holding a derivative does not itself trigger taxation. The same effective 9% tax rate applies after deducting flat-rate expenses.

Forex and Currency Trading

Income from foreign exchange trading (Forex) is taxed at 10%, with a flat 10% expense deduction, reducing the effective rate to 9%. If the purchase price of the currency cannot be proven, the full sale amount is taxed. Gains and losses from Forex and other financial instruments may be offset against one another. However, actual Forex-related expenses are not deductible under Bulgarian tax law.

The National Revenue Agency must be informed of each transaction, including dates, values, and the identity of the income-generating party.

Read also: Representation Expenses Tax in Bulgaria: Updated Guide for 2025

Taxation for Legal Entities: LTDs, Joint Stock Companies, and Others

Corporate entities, such as EOODs (single-member limited liability companies) and OODs (multi-member limited liability companies), are subject to the Corporate Income Tax Act (CITA). Unlike individuals, companies can deduct actual, documented business expenses from their taxable base.

Capital gains from financial instruments—stocks, bonds, derivatives, or foreign currencies—are taxed like any other business profit at a flat rate of 10%. Furthermore, companies may carry forward tax losses for up to five years and use them to offset future profits.

Similar to individuals, capital gains derived from financial instruments listed on regulated EU or EEA markets are tax-exempt. This exemption also applies to related dividend and interest income.

Additionally, capital gains from such instruments are not subject to withholding tax under Article 196 of the Corporate Income Tax Act. This makes Bulgaria an attractive jurisdiction for legal entities involved in financial investment.

Bulgaria offers a competitive tax environment for both private and corporate investors. With low flat tax rates, generous exemptions for EU-listed instruments, and options for loss compensation, the system is both efficient and accessible.

That said, the applicable rules are nuanced, and accurate documentation and compliance with deadlines are critical. Mistakes or omissions can lead to overpayment or penalties.

To ensure correct application of the Bulgarian tax code, rely on Accountancy Bulgaria, financial advisor in Bulgaria. Our team provides full assistance with tax planning and compliance for individuals and companies engaged in financial trading.