Bulgaria has one of the lowest income tax rates in the European Union: a flat 10% on salaries, freelance income, rent and most gains. Dividends are taxed at 5%. That headline is real, but it isn't the whole bill.
This guide covers Bulgarian personal tax for people moving to or living in Bulgaria in the 2026 tax year, which is the calendar year.
The key question is simple. How much of your income falls under the social security cap? Below the cap, contributions cost more than the tax. Above it, they stop.
What's changed: Bulgaria adopted the euro on 1 January 2026, at a fixed rate of 1.95583 lev to the euro, so all figures here are in euro. The 2026 social security budget was only published on 28 July 2026. It raised the contribution cap from €2,111.64 to €2,300 a month from 1 August, and the minimum insurable income for the self-employed from €550.66 to €620.20. The tax rates and the contribution rates for ordinary employees did not change. The digital nomad residence permit is also new: the implementing rules took effect in December 2025.
📋 Bulgaria tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Worldwide income for residents, at one flat rate |
Top income tax rate | 10% flat, with no tax-free allowance |
All-in on a US$100k salary | About 14% (about €87,000, including employee social security and health contributions). On pay under the cap, 22.4% |
Foreign income | Taxed for residents. Pensions from compulsory social insurance abroad are not taxable |
Dividends, interest, capital gains | Dividends 5%. Interest 10%, but deposit interest from EU and EEA banks is exempt. Gains 9% in effect, with listed shares exempt |
Crypto gains | 9% in effect (10% after a 10% deduction) |
Residence at a glance | Getting in: easy (more than 183 days in any 12 months, or your centre of vital interests). Leaving: a clean break, with no exit tax for individuals |
Double tax treaties | 70 concluded |
The 10% flat tax and what sits on top
Is Bulgaria really a 10% country? For income tax, yes. For your payslip, no. Employees also pay 13.78% of gross pay in social security and health contributions, and income tax is charged on what's left.
Image 1 — the 10% flat tax costs 22.4% all-in on pay under the cap
Your employer pays another 18.92% to 19.62% on top of your salary, depending on its line of business. It never appears in your gross pay, but it's part of what it costs to employ you.
The important detail is the cap. Contributions are only charged on pay up to the maximum insurable income: €2,111.64 a month from January to July 2026 and €2,300 a month from August. Across 2026 that's €26,281. Pay above the cap carries the 10% tax and nothing else.
So Bulgaria is a low tax, high social security country for ordinary salaries, and low on both for high ones.
👉 National Social Security Institute: contribution rates for employees, 2000 to 2026 (in Bulgarian)
👉 National Social Security Institute: insurable income from 1 August 2026 (in Bulgarian)
When you become tax resident in Bulgaria
You're a Bulgarian tax resident, whatever your nationality, if any one of these applies:
you have a permanent address in Bulgaria
you spend more than 183 days in Bulgaria in any 12-month period
your centre of vital interests is in Bulgaria
The 183 days don't have to fall in one calendar year. Any 12-month period counts, and you're resident for the year in which you pass day 183. The day you arrive and the day you leave each count. Time spent in Bulgaria only to study or for medical treatment doesn't.
Your centre of vital interests is in Bulgaria when your interests are closely connected with the country. The law points to your family, your property, and where you work and manage your assets.
There's one useful exception. If you have a permanent address in Bulgaria but your centre of vital interests is elsewhere, you're not resident.
Residents are taxed on income from Bulgaria and abroad. Non-residents are taxed only on Bulgarian income.
Leaving is straightforward. You stop being resident when none of the tests is met, and Bulgaria doesn't charge individuals an exit tax. The risk is the vital interests test: if your family and home stay in Bulgaria, you can remain resident however few days you spend there.
👉 Bulgarian Ministry of Finance: personal income taxes, rates and deductions
Income tax rates for 2026
There are no bands and no personal allowance. One rate applies from the first euro.
Bulgaria income tax rates for 2026
Type of income | Rate | How it's worked out |
|---|---|---|
Salary | 10% | On gross pay after your own social security and health contributions |
Freelance income | 10% | After a 25% flat expense deduction (40% for lawyers, notaries, authors and craftspeople) and your contributions |
Rent | 10% | After a 10% flat expense deduction |
Gains on shares, crypto and other financial assets | 10% | On the year's net gains after a 10% deduction. Listed shares are exempt |
Dividends | 5% | Final tax on the gross dividend, from Bulgaria or abroad |
Source: Income Taxes on Natural Persons Act; Bulgarian Ministry of Finance.
Worked example
You earn €87,000 a year (about US$100k) as an employee in 2026.
Contributions are charged on €26,281, the cap for the year. At 13.78% you pay €3,622.
Income tax is 10% of the remaining €83,378, which is €8,338.
Your all-in bill is about €11,960, or 13.7% of your salary.
Now take a salary of €24,000 a year, which stays under the cap. Contributions are €3,307 and income tax is €2,069. The all-in bill is €5,376, or 22.4%, more than double the headline rate.
Freelancing in Bulgaria
How do freelancers get to 7.5%? If you're registered as practising a liberal profession, 25% of your income is deducted as expenses with no receipts needed, and the rest is taxed at 10%. That's 7.5% of your fees.
It isn't the whole cost. As a self-insured person you pay your own contributions, with no employer to share them: 19.8% for your pension and 8% for health insurance, plus 3.5% for sickness and maternity cover if you choose to add it.
That's 27.8%, or 31.3% with the optional cover. During the year you pay on a monthly income you choose, between the minimum of €620.20 (from 1 August 2026) and the €2,300 cap. Your tax return then tops this up to your actual taxable income, still limited by the cap. The minimum bill is about €172 a month and the maximum for 2026 is €7,306.
On US$100k of fees (about €87,000), that works out at €7,306 of contributions and €5,794 of tax, or about 15% all-in. On €40,000 of fees the contributions are the same, because taxable income is already above the cap, and the all-in share rises to about 24%.
You pay advance tax each quarter, by the end of the following month, with no advance payment for the fourth quarter.
Crypto, investments and pensions
How is crypto taxed in Bulgaria? Since 2024 the income tax law has named virtual currencies, which covers crypto, alongside shares and other financial assets. You add up the year's gains, subtract the year's losses, deduct 10% as expenses and pay 10% on the rest. That's 9% of your net gain, with no relief for holding long term.
One warning: if you trade systematically, as an occupation, your activity may be treated as a business rather than investing, and different rules then apply.
Shares: the same 9% applies, but gains on shares and fund units traded on a regulated market are exempt. In practice that means Bulgarian and other EU or EEA exchanges, so check whether your trades qualify.
Dividends: 5% final tax, including dividends from foreign companies.
Interest: 10%. Interest on deposits with banks in the EU or EEA is exempt, and so is interest on Bulgarian, EU and EEA bonds.
Pensions are where Bulgaria stands out. Income from compulsory social insurance, in Bulgaria or abroad, isn't taxable. That covers state pensions from other countries. Payments from supplementary voluntary pension insurance are also exempt once you've qualified for the pension. A foreign workplace or private pension that doesn't fit either category can be taxed at the 10% flat rate, so check how your scheme is classified. The treaty may also let the paying country tax it.
Bulgaria has no wealth tax. A surviving spouse and heirs in the direct line, such as children and parents, pay no inheritance tax. Brothers, sisters and their children pay 0.4% to 0.8%, and other heirs 3.3% to 6.6%, on each share above 250,000 lev (about €127,800 at the fixed euro rate). Each municipality sets its own rate within these ranges.
👉 Bulgarian Ministry of Finance: inheritance tax
Social security
Contributions cover state social insurance, a compulsory second-pillar pension and health insurance. The 2026 rates are:
Bulgaria social security and health contributions for 2026
Who pays | Social security | Health | Total |
|---|---|---|---|
Employee | 10.58% | 3.2% | 13.78% |
Employer | 13.72% plus 0.4% to 1.1% accident cover | 4.8% | 18.92% to 19.62% |
Self-insured | 19.8%, or 23.3% with sickness cover | 8% | 27.8% or 31.3% |
These rates are for people born after 1959. The employee's 10.58% includes 2.2% for the second-pillar pension, the employer's accident cover depends on the company's main activity, and the 8% health contribution is split 60:40. Everything stops at the cap.
If you don't work, you may still owe health insurance. Foreigners with long-term or permanent residence status are compulsorily insured, which doesn't include the one-year renewable permits most newcomers start on. Anyone who is insured but not covered through work pays the 8% themselves, on a minimum base of half the self-insured minimum income. That's about €22 a month to July 2026 and about €25 a month from August, and other income you declare in your tax return may increase it. If another EU country covers your healthcare, for example through an S1 form, you don't pay in Bulgaria.
Bulgaria applies the EU social security rules and has agreements with countries including Canada, Israel, South Korea, Serbia and Ukraine.
👉 Ministry of Labour and Social Policy: State Social Security Budget Act for 2026 (in Bulgarian)
👉 National Social Security Institute: international social security agreements
Double tax treaties
Does Bulgaria have double tax treaties? Yes. The Ministry of Finance lists 70 double taxation conventions concluded by Bulgaria, including with the UK, the United States, Germany, France, Italy, Spain, Ireland, Switzerland, Canada, the UAE, India, China and Singapore.
The treaties matter most in the year you arrive or leave, when you may be resident in two countries at once.
👉 Bulgarian Ministry of Finance: double taxation conventions
The digital nomad permit
Bulgaria added a digital nomad residence permit to its Foreigners Act in June 2025, and the implementing rules took effect in December 2025. It's for non-EU nationals who work remotely using information technology.
You qualify in one of three ways:
you're employed by an employer registered outside the EU, EEA and Switzerland
you own more than 25% of, or manage, a company registered outside those countries, and don't work for anyone in Bulgaria
you've freelanced remotely for at least a year, and don't work for anyone in Bulgaria
You need a gross annual income of at least 50 Bulgarian minimum monthly wages. On the 2026 minimum wage of €620.20 that's €31,010 a year, or about €2,584 a month. The law refers to the previous calendar year, so the figure applied to you may be lower: on the 2025 minimum wage of €550.66 it's €27,533. The permit lasts one year and can be extended once, for one more year.
You normally get a long-stay visa (type D) from a Bulgarian consulate first, then apply for the permit to the Migration Directorate of the Ministry of Interior.
There's no tax exemption attached. Spend more than 183 days in Bulgaria in any 12 months and you're tax resident, with your worldwide income taxed at 10%.
👉 State Gazette No. 109 of 2025: implementing rules for the digital nomad permit (in Bulgarian)
👉 State Gazette No. 98 of 2025: minimum wage of €620.20 from 1 January 2026 (in Bulgarian)
Who is Bulgaria good for?
Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including social security and health contributions.
☑️ Who is Bulgaria good for? Tax ratings for expats in 2026
Expat profile | Bulgaria rating | Why |
|---|---|---|
Employees | Good | About 14% all-in on a US$100k salary, because contributions stop at the cap. On pay under the cap the cost is 22.4%, and your employer pays 18.92% to 19.62% on top. |
Freelancers (self-employed) | Good | About 15% all-in on US$100k: a 25% flat expense deduction, 10% tax and 27.8% contributions up to the cap. The share is higher on lower income, about 24% on €40,000. |
Retirees | Excellent | Pensions from compulsory social insurance abroad, such as foreign state pensions, aren't taxable. Our example assumes a foreign state pension, so the only costs are 5% on dividends and a small health contribution, about 2% in total. Workplace and private pensions can be taxed at 10%. Spouses and children pay no inheritance tax. |
Crypto gains | Good | Gains are taxed at 10% after a 10% deduction, so 9% in effect, however long you held the asset. Frequent trading may be treated as a business, with different rules. |
Investment income | Good | 5% on dividends. Gains on shares traded on a regulated market are exempt and other gains cost 9%, so about 2.5% to 7% in our example. There's no wealth tax. |
Digital nomad visa | Good | Non-EU remote workers with income of about €31,000 a year can get a one-year permit, renewable once. There's no tax break: you're taxed normally once resident. |
Filing and deadlines
The annual return for 2026 is filed between 10 January and 30 April 2027, and any tax due is paid by 30 April 2027. If you file online and pay by 31 March, you get a 5% discount on the balance, up to a small limit.
Employers deduct tax from salaries each month and reconcile the year by 31 January. Self-insured people must file their return online. Residents also use the return to declare foreign dividends, and shares and property they hold abroad. If you spot a mistake after the deadline, you can file one corrected return by 30 September.
👉 Bulgarian Ministry of Finance: filing deadlines for personal income tax
Frequently asked questions
Is income tax really 10% in Bulgaria?
Yes. Bulgaria charges a flat 10% on most personal income and 5% on dividends. Employees also pay 13.78% in social security and health contributions on pay up to €2,300 a month, so the all-in cost on pay under that cap is 22.4%.
How are freelancers taxed in Bulgaria?
Registered freelancers deduct 25% of their income as flat expenses and pay 10% tax on the rest, which is 7.5% of their fees. They also pay their own contributions of 27.8%, on income between €620.20 and €2,300 a month. On US$100k that's about 15% all-in.
When do I become tax resident in Bulgaria?
You're resident if you have a permanent address in Bulgaria, spend more than 183 days there in any 12-month period, or have your centre of vital interests there. A permanent address alone doesn't count if your centre of vital interests is in another country.
How is crypto taxed in Bulgaria?
Gains on crypto-assets are taxed at 10% after a 10% deduction, so 9% of the year's net gain. Losses in the same year are set against gains. Systematic trading may be treated as a business activity instead, with different rules.
Are foreign pensions taxed in Bulgaria?
Income from compulsory social insurance abroad, such as a foreign state pension, isn't taxable in Bulgaria. Supplementary voluntary pension income is also exempt once you've qualified for the pension. Other foreign workplace or private pensions can be taxed at 10%, so check how your scheme is classified.
Does Bulgaria have a digital nomad visa?
Yes. Under rules in place since December 2025, non-EU remote workers can get a one-year residence permit, renewable once, with income of at least 50 Bulgarian minimum monthly wages. That's about €31,000 a year on the 2026 minimum wage. It has no tax exemption.
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
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