Bulgaria: Property Taxes
Overview
Non-residents in Bulgaria are required to pay taxes on income earned within the country. Married couples are taxed separately, as joint taxation is not permitted.
Rental Income Tax
Non-residents earning rental income from Bulgarian properties are subject to a 10% withholding tax on gross rental income. This tax is typically deducted at the source and must be paid monthly. However, if a tax treaty exists between Bulgaria and the foreign country, the tax can be paid quarterly instead.
<table> <tbody> <tr class="blue-row" > <td colspan="3"><strong>Monthly income, €</strong></td> </tr> <tr> <td>1500</td> <td>6000</td> <td>1200</td> </tr> </tbody> <tbody> <tr class="blue-row" > <td colspan="3"><strong>Tax rate, %</strong></td> </tr> <tr> <td>10.00</td> <td>10.00</td> <td>10.00</td> </tr> </tbody> </table>Corporate Taxation
Corporations operating in Bulgaria are taxed at a flat rate of 10% on their income and capital gains. Expenses related to generating income are deductible when calculating taxable income. Corporate income tax payments are due by March 31 of the following year.
Capital Gains Tax
Non-residents selling Bulgarian property are subject to a 10% capital gains tax. The taxable gain is calculated by subtracting the inflation-adjusted purchase price or the property's taxable value for real estate tax purposes (whichever is higher) and incidental expenses (up to 10% of the selling price or fair market value) from the sale price. Exemptions: The sale of one residential property is exempt from capital gains tax if the property was owned for more than three years. The sale of up to two real estate properties is exempt if they were held for more than five years. Capital gains from properties inherited are not taxed. Capital gains from properties received as gifts are taxed on the full sale amount, as the acquisition cost is considered zero.
Value Added Tax (VAT)
Sales and leasing of residential properties are exempt from VAT. Transactions involving land are also VAT-exempt.