Value Added Tax in Bulgaria

The current rate of VAT in Bulgaria is 20 per cent. If you buy a property as an individual or as a company from a VAT-registered company,you will have to pay 20 per cent VAT. The seller then passes on this VAT to the government.

VAT Registration
Companies are obliged to register for VAT if the value of their sales is equal to or exceeds 50,000 leva (around €25,500) in any period not exceeding 12 months. You can also choose to register for VAT even if you have no revenue at the time of registration.


More about Value Added Tax in Bulgaria

Taxes Payable in Bulgaria

A lot of people who live in Bulgaria and who are legally obliged to pay tax there simply do not do so. A lot of people who do not live in Bulgaria but who are obliged to pay taxes to the Bulgarian government because they have, for example, let out their home in Bulgaria also do not pay tax to the government in Bulgaria. If they do not pay taxes in Bulgaria they usually also fail to pay the taxes they owe in Britain or wherever else they live.


More about Taxes Payable in Bulgaria

Tax Residence in Bulgaria

Tax residence in Bulgaria is determined largely by one simple rule – if you spend more than 183 days a year in Bulgaria, you are regarded as being resident there for tax purposes.

Tax Residence in More than One Country

Remember that you can be a tax resident in more than one country under the respective rules of those countries. For example, you might spend 230 days of every year in Bulgaria and 135 days in England. In this case you could end up, under the rules of each country, being responsible for paying the same tax in two or more countries.


More about Tax Residence in Bulgaria

Bulgarian Residency for Tax Purposes

The biggest single factor in determining how you will be treated by the tax authorities in any country is whether you are resident in the country for tax purposes. This concept of tax residence causes a great deal of confusion and can have different meanings in different countries.


More about Bulgarian Residency for Tax Purposes

Taxation in Bulgaria and Bulgarian properties taxation

All tax systems are complicated, and the Bulgarian system is no exception. Fortunately, most people will only have limited contact with the more intricate parts of it. Many owners of holiday homes in Bulgaria only have minimal contact with the system.

It is helpful to have some sort of understanding about the way in which the system works and the taxes that you might face. You also need to be particularly careful about words and concepts that seem familiar to you but which have a fundamentally different meaning in Bulgaria from in Britain.


More about Taxation in Bulgaria and Bulgarian properties taxation

Types of Bulgarian properties

When buying an old property – built more than about 50 years ago:
• Are you having a survey? Not to do so can be an expensive mistake.
• Are you clear about any restoration costs to be incurred? Do you have estimates for those costs?
• Are there any planning problems associated with any alterations or improvements you want to make to the property?


More about Types of Bulgarian properties

After the Purchase of your Bulgarian property

There are also a number of practical issues you will need to address, such as changing the water and electricity accounts from the previous owner’s name to your name. Changing the locks and securing the Bulgarian property if you are not going to live there, arranging for direct debits with the bank for the water and the electricity to be paid, insuring the property in Bulgaria and its contents, and so forth.


More about After the Purchase of your Bulgarian property

Handing Over the Bulgarian Property

After completing the deal in Bulgaria, property sellers sometimes are given up to a month to finally vacate the property in Bulgaria. That is why often in the notary act (and the preliminary contract) there is mention of a small amount of money to be held back until the official handing over of the property.There are penalties imposed on the seller if they do not meet this obligation.

Under-declaring the Purchase Price


More about Handing Over the Bulgarian Property

Fees and Costs involved in the Bulgarian property deal

There are several costs involved in the actual Bulgarian property transfer: stamp duty, the notary fee and registration tax.

Stamp Duty

Stamp duty, or the so-called transfer tax, is paid by the buyer and goes to the local municipality where the property is situated. The amount of the tax is 2 per cent on either the tax evaluation or the purchase price, whichever is the higher. The transfer tax is either paid to the notary or paid by bank transfer to the municipality, and the bank document is presented to the notary.There are also bank charges for the transfer, which depend on the amount transferred and the bank charges of the particular bank.


More about Fees and Costs involved in the Bulgarian property deal

The Importance of Signing the Title Deed in Notary Form

The notary act defines who is the legal owner of the Bulgarian property. It is only valid if ft isin notaryform, signed infrontofand bya notary. You should know this, in case someone tells you that just a simple contract signed between you and them along with payment, is sufficient.


More about The Importance of Signing the Title Deed in Notary Form
« Previous Page — Next Page »