Non-resident individuals and their companies are taxed in Bulgaria on income arising from Bulgarian sources only and are liable to a number of other property related taxes, registrations and declarations.

An individual is considered resident in Bulgaria if he spends 183 days or more in any tax year (calendar year) in Bulgaria. Non-residents may also be liable for tax on the same source of income in their home country of residence, where taxes are levied on worldwide income. Relief for double taxation may apply. The legal structure adopted when purchasing property will determine what Bulgarian property taxes apply.

Bulgarian Accountants can organize the completion and filing of all necessary Bulgarian tax returns for individuals and company in addition to advising on your property tax obligations in your home country.

Ongoing Bulgarian property taxes which you have to consider if you have property are as follows:

Income Tax on rents for a non-resident landlord is subject to 10% withholding tax on gross rents . No deductions are allowed for costs incurred.

Bulgarian Corporate Income Tax is payable if property is purchased through a company and is calculated as 10% on the company profits. Full deductions will be given for eligible costs incurred in connection with the property. A corporate income tax return must be filed every year even in cases where a Nil return has occurred.

Bulgarian Capital Gains Tax is payable on any increase in value since acquisition - 10%. The gain is calculated on the difference between the sale price and the higher of the tax estimation and the price of acquisition (Notary Deeds), corrected by an inflation index. No Bulgarian CGT if property is held for more than 5 years.

Bulgarian Inheritance Tax is payable by non-resident beneficiaries on certain transferred assets. The tax rate depends on the relationship between the parties and the size of the inheritance. The lineal heirs are completely exempt from this tax. For all other beneficiaries the tax rate will apply only on property with tax evaluation above €125,000. Brothers and sisters pay 0.7% Bulgarian IHT on the amount above €125,000; any other person pays 5%.

Either for company or non-resident individual, the obtaining of identification code when buying a property in Bulgaria is a must:

• Bulgarian BULSTAT Identification code for non-resident individuals - Foreign individuals, who do not have Personal Identification Number (PIN) or Personal Foreigner's Number (PFN) and own property in Bulgaria, are obliged to register in the BULSTAT Register with the Registry Agency of Bulgaria to get an Identification code within 7 /seven/ days of purchasing the property. Individuals are issued a Registration certificate. Usually the entire procedure lasts 1 /one/ month.
• Bulgarian company’s Unified Identification code. When a Bulgarian company is established in the Registry Agency of Bulgaria, it shall receive a Unified Identification Code /UIC/. Upon consequent VAT registration the VAT number will be the UIC with prefix BG.

When buying a property in Bulgaria no matter is it as non-resident individual or as company your obligations on local level are the following:

Property Declaration within 2 /two/ months of property acquisition for both land and/or building with the respective municipality where the property is situated . The property could be declared either for residential or trade purposes. On the base of the declared information Local Property taxes need to be paid.

Bulgarian Local Property taxes are payable quarterly and vary per location/municipality. Usually they consist of Garbage fee and Council Tax. The taxes are calculated in compliance with the Tax evaluation of the property (defined each year) and the rates accepted by each different Bulgarian Municipality.