Bulgarian company & tax glossary

Single-member Bulgarian limited liability company (Ednolichno Druzhestvo s Ogranichena Otgovornost).

The most common vehicle for foreign founders. One shareholder, minimum share capital of BGN 2 (about €1), full liability protection, and taxed at Bulgaria's flat 10% corporate rate.

• EOOD explained →

Multi-member Bulgarian LLC (Druzhestvo s Ogranichena Otgovornost).

Same tax and liability treatment as an EOOD but with two or more shareholders. Standard for partnerships and joint ventures.

• EOOD vs OOD →

Bulgarian joint-stock company (Aktsionerno Druzhestvo).

Used for larger operations, regulated activities, or when share transferability matters. Minimum capital BGN 50,000.

Bulgarian company registration number (9-digit).

Issued by the Commercial Register on incorporation. Equivalent to a UK company number or German Handelsregister number.

Legacy identifier now merged into the EIK.

You will still see it on old documents; today the EIK serves both purposes.

Flat 10% on Bulgarian company profits.

One of the lowest headline rates in the EU. No progressive brackets, no surcharges.

• 10% CIT guide →

5% on dividends paid to individuals (0% to EU parent companies under the Parent-Subsidiary Directive).

Combined with the 10% CIT, an owner-operator's effective tax on distributed profit is roughly 14.5%.

20% standard rate; 9% for hotels; registration threshold BGN 166,000 turnover.

Voluntary registration is available below the threshold. Intra-EU B2B services generally use reverse charge.

• VAT registration guide →

VAT self-accounting mechanism for cross-border B2B supplies.

The customer accounts for VAT in their own country rather than the supplier charging it. Standard for most intra-EU service invoicing.

One-Stop-Shop schemes for reporting EU-wide B2C VAT.

OSS covers services and distance sales inside the EU; IOSS covers imports of goods under €150.

Statistical reporting of intra-EU goods movements above national thresholds.

Bulgaria's 2026 thresholds are BGN 1,650,000 for arrivals and BGN 3,600,000 for dispatches.

About 32.7-33.4% of gross salary, capped at BGN 4,130/month in 2026.

Split roughly 60/40 between employer and employee. The monthly cap keeps high-salary payroll predictable.

BGN 1,213/month in 2026 (about €620).

Also serves as the minimum social security base for self-insured owners.

Owner-managers who insure themselves rather than run PAYE.

Common for solo EOOD founders. Contributions are calculated on a chosen insured income between the minimum wage and the monthly cap.

Profit paid to shareholders after CIT, subject to 5% withholding for individuals.

Can be distributed annually after the accounts are approved, or as interim dividends where the articles permit.

Real economic activity in Bulgaria: office, staff, decision-making.

Required to defend tax residency against foreign authorities (Germany, Netherlands, France in particular). Renting a desk and holding board meetings locally is the baseline.

Determined by place of incorporation and place of effective management.

A Bulgarian company managed day-to-day from Berlin can be re-characterised as German tax resident. Move the management, not just the paperwork.

Bulgarian if 183+ days present or centre of vital interests is in Bulgaria.

Personal residency and company residency are separate questions; you can have one without the other.

• Residency rules →

A taxable presence created abroad by a fixed place of business or dependent agent.

A Bulgarian company with a German-based director signing contracts in Germany likely triggers a German PE, dragging profit into German tax.

German exit tax on unrealised gains for shareholders holding 1%+ of a corporation.

Triggered on emigration. Sequencing the move before value crystallises is critical for German founders.

Controlled Foreign Company rules that attribute passive foreign profits to the home country.

Bulgaria's low CIT can trigger CFC add-back in France, Germany, and the UK if the Bulgarian entity is genuinely passive.

EU rule eliminating withholding tax on qualifying intra-EU dividends.

10%+ shareholding for at least one year usually qualifies. Enables 0% dividend flow between EU group companies.

EU rule eliminating withholding on qualifying intra-EU interest and royalty payments.

Applies between associated EU companies with 25%+ common ownership held for at least two years.

Bilateral agreement allocating taxing rights and eliminating double taxation.

Bulgaria has 70+ DTTs including all EU states, the US, UK, UAE, and most major economies.

OECD Multilateral Instrument amending existing DTTs to add anti-abuse rules.

Introduces the Principal Purpose Test - treaty benefits denied if obtaining them was one of the main purposes of the arrangement.

General Anti-Avoidance Rule.

EU-mandated rule in Bulgarian law; disregards arrangements without valid commercial reasons.

The natural person ultimately owning or controlling the company (25%+ typically).

Must be declared to the Bulgarian Commercial Register within 4 months of incorporation.

Anti-money-laundering and know-your-customer checks.

Bulgarian banks require passport, proof of address, source of funds, and often an in-person visit.

International bank account number - Bulgarian IBANs are 22 characters starting BG.

Full SEPA and SWIFT support; euro accounts are standard alongside BGN.

Single Euro Payments Area - unified euro transfers across 36 countries.

Bulgarian banks and EMIs offer SEPA in and out; transfers typically settle same or next day.

Electronic Money Institution (Wise, Revolut, Payoneer).

Faster to open than a bank, but many suppliers, tax authorities, and payroll systems still require a traditional bank IBAN.

• Wise vs Revolut →

A provider (Stripe, Paddle, LemonSqueezy) that acts as the seller for tax purposes.

The MoR handles VAT collection and remittance across jurisdictions on your behalf.

US tax on Global Intangible Low-Taxed Income of controlled foreign corporations.

US citizens owning a Bulgarian EOOD generally face GILTI unless they make a Section 962 or Section 250 election.

US Foreign Earned Income Exclusion (about $130,000 in 2026).

Excludes foreign-earned salary from US taxation for qualifying US expats. Does not shield corporate profit.

US reporting for foreign financial accounts.

FBAR is required if aggregate foreign accounts exceed $10,000 at any point; FATCA has higher thresholds and is filed with the tax return.

EU Markets in Crypto-Assets Regulation.

Harmonises crypto licensing across the EU from 2025. Bulgaria is a competitive jurisdiction for CASP authorisation.

• Crypto licensing →

Bulgarian National Revenue Agency (Natsionalna Agentsiya po Prihodite).

The tax authority. Handles CIT, VAT, payroll, and social security filings.

Bulgaria's public company registry.

Operated by the Registry Agency. All incorporations, changes, and annual filings are lodged here.

The company's official legal address in Bulgaria.

Required for incorporation. Can be a virtual office in most cases, though substance considerations may warrant a physical location.

International certification of a public document under the 1961 Hague Convention.

Foreign shareholder passports and corporate documents typically need apostille + certified Bulgarian translation.