On 10 November 1989 the communist regime in Bulgaria toppled down and the country embarked on the painful road of transformation from a state-owned mutilated society to a free market economy. The changes were abrupt and unprepared and virtually caught the country without any taxation system whatsoever. The first modern taxation laws appeared only in the middle of 90-ies. VAT taxation was swiftly introduced in 1994 and the first decent corporate income tax law appeared in 1996. Since then, the changes and developments in the tax legislation of the Republic of Bulgaria have been fundamental. Compared to any other legislative area, Bulgarian taxation laws are literally in a status of constant evolution.
In terms of tax rates you will certainly find the Bulgarian tax environment extremely attractive. The overall tax burden on almost any type of income is very low. For instance:
> Corporate income tax - 10%
> Withholding tax on dividends, interests, royalties, capital gains - 10% (7%)
> VAT - 20%
> Personal Income Tax - maximum taxation of app. 25%
In addition to having low tax rates, Bulgaria has developed a broad network of double tax treaties that may further reduce the tax burden on any cross-border income derived by foreign investors from Bulgarian sources.
We at Delchev & Partners view taxation as a key practice area. We believe that our clients should receive the best tax advice and we are competent and committed to provide it.
Delchev & Partners Tax Practice covers all aspects of tax laws including among others:
