Bulgaria's 10% flat tax and VAT basics for small businesses
Bulgaria is known across Europe for one number: 10%. It is the flat rate for both corporate and personal income tax, and it is a large part of why founders incorporate there. But the flat tax is only half the picture — VAT and social contributions are where the monthly work lives.
The 10% flat tax
Corporate income tax is a flat 10% on profit. Personal income tax is also a flat 10%. Dividends distributed to individuals carry a 5% withholding tax. There are no progressive brackets to model, which makes the headline calculation refreshingly simple.
The simplicity is real, but it does not remove the need for proper accounting: the 10% is charged on correctly determined taxable profit, which still requires double-entry books, depreciation and expense substantiation.
VAT registration with the NRA
VAT (ДДС) is administered by the National Revenue Agency (NRA). Registration becomes mandatory once taxable turnover passes the national threshold over a 12-month period; voluntary registration below it is allowed and common for B2B companies.
Intra-EU acquisitions and the supply of cross-border services can trigger registration obligations earlier, independent of the domestic turnover threshold.
Monthly VAT returns and VIES
VAT in Bulgaria is filed monthly, with the return and the purchase/sales ledgers due by the 14th of the following month. Businesses trading with the EU also submit VIES declarations for intra-Community supplies.
Because the ledgers are submitted in a defined electronic format, accurate document coding throughout the month is what makes filing painless at month-end.
Social security and payroll
Payroll involves social-security (ДОО) and health contributions split between employer and employee, plus the 10% income tax withheld at source. Contribution bases have minimum and maximum thresholds that change periodically.
For exact current rates and thresholds, always confirm against the NRA — payroll parameters are the figures that move most often.
Let Bilenta handle the paperwork
Bilenta carries the Bulgarian chart of accounts, files ДДС returns and the sales/purchase ledgers in the NRA format, and runs payroll with ОДФЛ and ДОО handled automatically — all in Bulgarian, English or Russian.
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