🇧🇬 Bulgaria — 2026 Freelancer & Company Tax FAQ

Tax residency

What does "tax residency" actually mean?

Tax residency is one of the main rules determining where your worldwide income is reported.

What makes someone a tax resident in Bulgaria?

Common Bulgarian domestic-law routes include spending more than 183 days in Bulgaria in a 12-month period and having your centre of vital interests here — meaning your business, property, family ties, and economic life are anchored in Bulgaria. Treaty tie-breaker rules may still be needed if another country also treats you as resident.

Does relocating here automatically end my tax residency back home?

Not at all. Your home country won't simply release you. You need to actively cut ties — deregistering from their tax, health, and social systems, and ideally getting formal confirmation that you've done so. This step is often underestimated, and it's where most problems arise.

Residency and physical presence

One of the most common questions we get from people exploring Bulgaria is whether they actually need to be here to benefit from the tax system.

Is the 183-day rule the only way to qualify?

No. It's the simplest way to prove residency — a day count is hard to dispute. But if your life is clearly based in Bulgaria (your work, your lease, your family), you can qualify through the vital interests test without hitting 183 days. That said, the day count is safer if challenged.

I've heard I can just register remotely and start paying Bulgarian taxes from abroad. Is that not possible?

Registration and tax residency are different things. You might be able to file paperwork from abroad, but if you're still a tax resident of another country, you can't simply opt into the Bulgarian tax system. Your home country retains its right to tax you — and trying to pay here instead can expose you to penalties there.

How much time do I actually need to spend here?

Very little for the registration process itself. You'll need to be present to apply for a residence permit and to sign a power of attorney. After that, almost everything can be handled remotely. One week on the ground is typically enough to get everything started.

Do I need a Bulgarian address?

Yes — for both freelancer and company registration. A rented apartment works, as does a registered desk at a coworking space. They don't need to be the same address.

Do I need to actually sign a lease to become a tax resident?

Legally, a lease or residence certificate does not create tax residency by itself. Practically, a Bulgarian address and housing documents are central to residence registration and are useful evidence that your life is genuinely based here. A rental agreement plus any required landlord declaration is the starting point for many relocations.

What if I travel a lot — can I still keep Bulgarian residency?

Potentially, if your centre of vital interests stays demonstrably in Bulgaria. The risk is that countries you spend significant time in may argue you belong to their tax system instead. The more documented evidence you have of your Bulgarian life — lease, accounts, business activity — the stronger your position.

Is Bulgaria part of Schengen?

Yes. Bulgaria joined the Schengen area fully on January 1, 2025.

What about healthcare?

As a registered freelancer or company owner, you pay into the Bulgarian public health insurance system (NZOK) as part of your social contributions, which gives you access to state medical care. Most expats also take out private insurance for faster access and English-language service.

Do I need to speak Bulgarian to deal with bureaucracy?

Official systems, forms, and the National Revenue Agency platform are all in Bulgarian. In practice, your accountant handles this — you don't need to navigate it yourself.

Can I start working before my residence permit is ready?

An EU/EEA or Swiss citizen already has a free-movement right to work and can normally complete the business registrations while the longer-stay residence documentation is being processed. A non-EU citizen must first have a residence and work basis that permits the activity; company ownership by itself is not work authorization.

Freelancer or company

What's the practical difference between the two?

Operating as a freelancer means you're working as an individual. There's no company to register, no formal bookkeeping, and the tax calculation is straightforward. An EOOD (Bulgarian single-owner LLC) is a separate legal entity that can deduct real business expenses and offers a liability shield — but it requires an accountant, annual financial statements, and more administration.

See the full side-by-side comparison of both structures with exact 2026 tax numbers.

I genuinely can't decide. What would you suggest?

Start as a freelancer. The setup is faster, the running costs are lower, and you can switch to a company later if your income or business structure calls for it.

I've heard about a new company type, the DPK. Is it better than an EOOD?

The DPK (дружество с променлив капитал — variable capital company), and its single-owner version the EDPK, is Bulgaria's first new company form in over 30 years. It is a capital company like the EOOD — same 10% corporate tax and 5% dividend tax — but with variable capital that is not fixed in the Trade Register, low-value shares, simplified share transfers, and share classes with special rights. It was designed mainly for startups and small, growing companies. It can also suit a freelancer who expects co-founders, investors, or employee equity.

The catch is its statutory size test: fewer than 50 employees and annual turnover and/or assets not exceeding 4,000,000 BGN (roughly 2.05M EUR). The employee condition and at least one of the financial conditions must remain satisfied.

→ Full comparison: EOOD vs DPK

2026 changes

Did the social security base change mid-year in 2026?

Yes — Parliament adopted the 2026 SSS Budget Act on 22 July 2026, raising the monthly social security base effective 1 August: the minimum went from 550.66 EUR to 620.20 EUR, and the maximum from 2,111.64 EUR to 2,300 EUR.

A full year at the new minimum would run ~2,069 EUR, but the actual full-2026 minimum is about 1,934 EUR because seven months use the old base.

→ Read the full answer

Individual freelancer taxation

Do all freelancers get the same recognized-expense deduction?

No. Ordinary free-profession income and remuneration under non-employment contracts (most freelancers: IT, design, translation, engineering, accounting) get 25%. Author/licence remuneration, and income earned as a lawyer exercising a free profession, get 40% instead. The category follows the legal nature of the income — you can't pick 40% just because it's more favorable.

→ Read the full answer

Is there a cap on freelancer social insurance?

Yes — capped at 2,111.64 EUR/month through July and 2,300 EUR/month from August. For the ordinary 25% category, the base is fully capped once gross income clears roughly 36,800 EUR/year, and the marginal effective tax rate above it drops to 7.5%. For the 40% category (authors, lawyers), full capping happens later, at roughly 46,000 EUR/year gross, with a marginal rate of 6% above it.

→ Read the full answer

Is there a minimum social insurance base too?

Yes — 620.20 EUR/month from August (550.66 EUR/month before that), applied even at very low income. For the ordinary 25% category, the base is fully proportional (no floor effect at all) above roughly 9,923 EUR/year gross, and the combined effective rate there is a flat 26.3%. For the 40% category, the equivalent threshold is roughly 12,404 EUR/year gross, with a flat effective rate of roughly 21.0% above it.

→ Read the full answer

EOOD company taxation

How much does an EOOD owner pay in social insurance?

The minimum-base, no-salary owner scenario produces ~1,934 EUR for 2026 — seven months at the 550.66 EUR base plus five at the 620.20 EUR base that took effect in August. Company revenue alone does not increase that amount. Salary or personal-labour remuneration, optional coverage, another insurance title, or a higher chosen base can change the actual contribution. Once the new minimum applies for a full calendar year, the equivalent minimum run rate is ~2,069 EUR.

→ Read the full answer

EOOD or individual freelancer — which wins?

For a freelancer in the ordinary 25% category, the EOOD wins between roughly 16,400 and 66,300 EUR/year; above that, the freelancer's capped social insurance takes over, and below it the freelancer is cheaper too. The 40% category has different break-even points — see the full answer for the exact numbers.

→ Read the full answer

DPK / variable capital company

What's the minimum share value in a DPK?

0.01 EUR — one eurocent — with no statutory minimum total capital, unlike an EOOD's 1 EUR minimum. The pre-euro wording was one stotinka.

→ Read the full answer

What's the size cap on a DPK?

Fewer than 50 employees, plus annual turnover and/or assets not exceeding 4,000,000 BGN. The employee condition and at least one financial condition must remain satisfied; exceeding only one of turnover or assets does not by itself force conversion.

→ Read the full answer

Does a DPK pay less tax than an EOOD?

No — the tax treatment is identical. The DPK is a governance choice, not a tax optimization.

→ Read the full answer

Freelancer registration and taxes

My setup is basically one client. Could that be treated as hidden employment?

It could raise the question, but in practice hidden employment rules exist to protect workers who want to assert employment rights — not to catch freelancers working with a single main client. As long as your contract reflects genuine independence, this is rarely an issue.

Is there an income ceiling on the flat 10% tax?

No. The flat rate applies regardless of how much you earn — there are no higher brackets for freelancers in Bulgaria.

That seems too low to be real. Is it?

Yes, it's real.

What if my actual costs are higher than 25%?

The recognized expense deduction is fixed — you can't substitute your real costs for it. If your actual expenses significantly exceed the applicable rate, the EOOD structure (which lets you deduct real costs) will likely work better for you.

Are there any changes to freelancer tax rules coming?

Nothing has been confirmed or seriously proposed in parliament at the time of writing.

Do I need an accountant as a freelancer?

It's not a legal requirement, but in practice most people use one. The NRA's systems are in Bulgarian, filings have specific formats, and mistakes are easy to make if you're unfamiliar with them. The cost is usually worth it.

VAT rules

When do I need to register for VAT?

If you invoice business clients in other EU countries, you'll need to register for VAT to issue proper reverse-charge invoices. You won't actually charge or collect VAT — the mechanism works differently for cross-border B2B services — but you do need the registration number.

What's the EUR 51,130 threshold about?

That threshold (the euro equivalent of the former BGN 100,000 mandatory VAT registration threshold) applies to turnover from services taxable in Bulgaria — essentially domestic clients or consumer sales. If you're billing EU business clients abroad, those transactions typically fall outside the threshold calculation.

Any benefit to registering voluntarily?

It depends on your input VAT. A low-cost freelancer may gain little from voluntary registration, while someone buying substantial VAT-bearing equipment or services may benefit from input-VAT recovery. Weigh that against the added monthly compliance.

What about clients outside the EU?

For typical B2B services supplied to a business established outside the EU, Bulgarian VAT is generally not charged. Registration and reporting can still depend on the service, the customer's status, domestic turnover, and services you receive, so this is not a blanket exemption from VAT obligations.

Tax system and compliance

What's the effective tax rate as a freelancer?

→ Full breakdown: Individual freelancer taxation in Bulgaria

What's the effective tax rate through an EOOD company?

→ Full breakdown: EOOD company taxation in Bulgaria

Want to calculate your own numbers?

Use the free tax calculator to estimate your take-home pay for any income level — and compare freelancer vs. company side by side.

What do social contributions actually cover?

The standard self-insured package covers pension and health insurance. Sickness and maternity coverage is optional for self-insured people and costs an additional contribution; unemployment insurance is not an optional self-employed add-on.

Will I still owe taxes in my home country?

Not necessarily. Your former country may still tax local-source income, apply an exit tax, or claim that you remain resident under its domestic rules. If both countries treat you as resident, the relevant tax treaty resolves the overlap. This needs advice specific to the countries and income involved.

What happens to my EU health card (EHIC) if I move here?

Your existing EHIC remains valid only while you are covered by the country that issued it. If Bulgarian health insurance becomes the applicable system, you can apply through the Bulgarian process for an EHIC.

How are crypto gains taxed?

For individuals, gains from selling or exchanging crypto are subject to 10% income tax, with 10% recognized expenses applied first — giving an effective rate of around 9%. Simply holding assets that have appreciated in value is not a taxable event. Companies follow standard corporate tax rules.

What documents do I need to get started?

It depends on the structure and the residence application. Proof of accommodation is commonly a lease, ownership document, or landlord declaration. If the landlord submits the declaration in person, notarization is not always required; otherwise the signature generally must be notarized. Confirm the document set for your specific Migration Directorate filing.

How often do I need to file?

Social contributions are paid monthly. Bulgarian VAT tax periods and returns are generally monthly. Advance income tax payments are generally quarterly, and the annual income tax return is filed once a year.

Professional help

Can I do this without a lawyer?

Yes — nothing legally requires one. But coordinating a residence permit, NRA registration, and company setup in a language you don't speak takes significant time and attention to get right. A lawyer or an all-in-one service saves that time considerably.

Can you handle accounting?

Yes — we can take care of your accounting directly or connect you with a trusted partner, depending on your situation.

Can I delegate the whole process?

You can delegate many tax, company, and administrative filings under a properly drafted power of attorney. Some residence, identity, banking, signature, or authority-specific steps can still require you to attend in person, so confirm the required appearances for your route before planning the trip.

Non-EU citizens

This process is more demanding for non-EU nationals — we won't pretend otherwise.

What residence permit options do I have?

The main routes are through a trade representative office or the digital nomad visa, which Bulgaria introduced relatively recently. The right path depends on your nationality and circumstances — get in touch and we'll guide you.

Can I register a company while on a tourist visa?

Company registration itself doesn't require a visa. But legally living and paying taxes in Bulgaria requires a long-term permit. Don't assume registration is the same as legal residency.

Does Bulgarian residency give me access to the rest of the EU?

Not in the same way as EU citizenship. A Bulgarian residence document can support short Schengen travel subject to the applicable rules, but it does not give a non-EU national an unrestricted right to live or work in another member state. EU long-term resident status can make a later move easier, but the second country still applies its own admission conditions.

Contact us

If you have questions or want to discuss whether Bulgaria is the right move for your situation, feel free to reach out to us. We offer a free initial consultation to help you navigate the process.