Tax Rate

10 % flat rate; sole proprietors: 15 % flat rate; Interest on bank deposits is tax exempt.

Special tax rates

See Income Tax Act

Tax liability

Tax assessment period

Calendar year

Income categories

Income from

1. Employment relationships
2. Economic activity in a sole-trader capacity
3. Other economic activity
4. Rent or other income for the use of rights or property
5. Transfer of rights or property
6. Other income

Accounting

Double-entry bookkeeping in accordance with Bulgarian accounting regulations

Mandatory retention period for books and records

Loss set-offs

Permitted in principle

Loss carryback

not possible

Loss carryforward

Losses incurred by an individual entrepreneur in the course of business activities can be carried forward for a maximum of 5 years

Operating expenses

Business expenses

Tax allowable expenses

Expenses necessary for acquiring, securing or maintaining the revenue of the business

Lump sum option

Possible for incomes from self-employment, agriculture, forestry and specific professions.

Motor vehicles

Social insurance

Deductible

Withholding tax

Generally, 10 %:

lower rate may be provided by applicable DTA