Tax Obligations for Expats Living in Bulgaria

If you are planning on moving abroad to live and work overseas in Bulgaria you will want to familiarize your self with the Bulgarian tax system and what your tax obligations would be as an expatriate living in the country. You should note that that only reasons you would have to pay any income taxes in Bulgaria is if you are living there on a permanent basis or if you have earned some income within the country. If neither of those apply to you then you are not liable for income taxes in the country meaning that you would have no tax obligations in the country.

Bulgaria does have significantly lower tax rates that what you would find in Western Europe or the United Kingdom. And it is similar to what you would see in Eastern Europe. In Bulgaria residents of the country are taxed on their income that is earned worldwide unless there are treaties in place that prevent that from taking place. And non residents that are working in Bulgaria are only taxed on the income that has been earned in the country.

If you are wondering what makes you a resident of Bulgaria for tax purposes it is as simple as where you are domiciled. That is decided by several different means. If you have a permanent home in the country, if you spend more than 183 days in the country, if your center of economic interest is in the country or if you work in Bulgaria primarily. Note that most people are exempt from paying income tax in their home country as a means to avoid double taxation on their income. This does not apply to Americans.

The United States is the only country that requires its citizens to pay income taxes on worldwide income regardless of resident status, even if you have never stepped foot into the country.

Before you leave Bulgaria you should pay any taxes due for the previous tax year and the current tax year that you are leaving during.

Note that you do not have to pay income tax on any income earned from bank deposits in Bulgaria.

If you are earning income on some rental property in Bulgaria and are living in another country you will need to pay income tax on it in Bulgaria. This applies even if you are paying taxes on that income in another country. You will still have to pay taxes on rental income in Bulgaria. While all rental income is required to be declared in Bulgaria, the first 20 percent of rental income is not taxed.

The tax year in Bulgaria is from January 1st to December 31st each year. And tax returns for individuals are due by April 15th in Bulgaria.