Quick answer
In 2026 Bulgaria's 10% flat tax is reduced by a short list of deductions: social security contributions, a child allowance of EUR 3,067.75 for one child up to EUR 9,203.25 for three or more, EUR 4,049.43 for reduced work capacity, voluntary insurance up to 10% of income, donations up to 5–50% and young-family mortgage interest.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Find my savings →Bulgaria's 10% rate is already low, so most people never look at deductions. That leaves money on the table, especially if you have children, pay into a private pension or give to charity. This guide lists every deduction available to individuals in 2026, what each saves you, and how to claim it.
Bulgaria personal tax deductions in 2026: the key figures
| Deduction or benefit | 2026 amount (converted from BGN at 1.95583) |
|---|---|
| Child allowance | EUR 3,067.75 (one child), EUR 6,135.50 (two), EUR 9,203.25 (three or more) |
| Child with a disability | EUR 6,135.50 per child |
| Reduced work capacity of 50% or more | EUR 4,049.43 a year off taxable income |
| Voluntary pension, health and life insurance | Up to 10% of the annual taxable income for each type |
| Donations | Up to 5%, 15% or 50% of taxable income depending on the recipient |
| Young-family mortgage interest | Interest on the first EUR 51,129.19 of a home loan |
| Mandatory social security | Fully deductible from the income base |
| Statutory expense allowance | 25% for freelancers and civil contracts; 40% for royalties and crafts; 60% for farming |
Is this guide for you?
Read on if you…
- are a Bulgarian tax resident with children, a mortgage or private insurance;
- work as a freelancer and want to know what you can subtract before the 10%;
- give to charities or cultural organisations and want the tax relief.
Probably not your case if you…
- are a non-resident with income from outside the EU or EEA; most personal deductions are for residents;
- want business expense rules for a company; see business expenses in Bulgaria.
Which deductions can you claim in Bulgaria?
The Personal Income Taxes Act (PITA) lists them in Articles 18 to 24. They reduce your annual tax base – the income left after statutory allowances and social security – before the 10% is applied.
Social security contributions
Your mandatory pension, health and unemployment contributions are deducted first. For freelancers this matters most. A self-insured person pays about 27.8% on a monthly base between the minimum wage and the cap.
Child allowance
If you live with and support minor children, you deduct EUR 3,067.75 for one child, EUR 6,135.50 for two and EUR 9,203.25 for three or more. One parent claims it, or the parents split it. For a child with a disability of 50% or more, there is a separate deduction of EUR 6,135.50.
Reduced work capacity
People with a certified reduced work capacity of 50% or more deduct EUR 4,049.43 each year. You need a decision of the medical expert commission (TELK).
Voluntary insurance
Contributions to voluntary pension funds, voluntary health insurance and life insurance are deductible. Each type has its own cap of 10% of the annual taxable income.
Donations
Donations to public bodies, schools, hospitals, charities and registered non-profits are deductible up to 5% of your taxable income. Donations to some cultural organisations and to specific funds go up to 15%. The overall cap for all donations is 50%.
Young-family mortgage interest
A married couple can deduct interest paid on the first EUR 51,129.19 of a mortgage for their only home, if at least one spouse was under 35 when the loan was taken. Only one spouse claims it.
What income is exempt in the first place?
Some income never enters your tax base. That is often worth more than a deduction.
| Asset or income (resident, 2026) | Treatment | Condition |
|---|---|---|
| Shares and ETFs sold on a regulated EU/EEA market | Exempt | Article 13 PITA |
| Your home | Exempt | Held over 3 years |
| Up to two other properties | Exempt | Held over 5 years, once a year |
| Crypto-assets | 10% on the net annual gain | No holding exemption; see cryptocurrency taxes in Bulgaria |
| Funds outside EU/EEA markets | 10% | No exemption |
| Dividends | 5% final tax | Not eligible for deductions |
| Bank deposit interest | Exempt | Applies to banks in the EU/EEA |
| Child benefits, scholarships, insurance payouts | Exempt | Under Art. 13 PITA |
Residents and non-residents differ here. Non-residents pay 10% on Bulgarian-source gains, with treaty relief. Bulgaria has no exit tax for individuals; see ceasing your Bulgarian tax residency. More on gains in our capital gains tax in Bulgaria guide.
Can non-residents claim personal deductions?
Mostly no. But EU and EEA residents who earn at least 90% of their worldwide income in Bulgaria can claim the same deductions as residents. You file an annual return and attach a certificate from your country of residence.
How do you claim, step by step?
- Collect the documents: birth certificates, TELK decision, insurance and pension statements, donation receipts, mortgage interest certificate.
- Ask your employer whether they apply any deduction through payroll. Several are only available in the annual return.
- File the annual return through the NRA portal by 30 April 2027 for tax year 2026, with the right annexes.
- Get the refund. The NRA refunds overpaid tax to your bank account, usually within 30 days of a correct return.
Example – Elena and Georgi, Plovdiv, two children
Elena earns EUR 36,000 as an employed designer. After about EUR 3,490 of employee social security on the capped base, her base is about EUR 32,510. She claims the two-child allowance of EUR 6,135.50 and EUR 1,500 of voluntary pension contributions. Her taxable base drops to about EUR 24,870. Tax falls from EUR 3,251 to EUR 2,487: a saving of about EUR 764 a year, just by filing a return.
Elena found EUR 764 she did not know about. You might find more.
Find your savings with Heavnn: we check every deduction you are entitled to.
Find my savings →Common mistakes (and what they cost)
- Not filing a return as an employee with children → you lose the child allowance for that year, up to EUR 920 of tax.
- Both parents claiming the full child allowance → the NRA disallows one claim and adds interest.
- Donating to an unregistered organisation → no deduction at all.
- Forgetting voluntary pension contributions → up to 10% of income taxed when it could have been sheltered.
- Claiming the mortgage deduction on a second home → reassessment, interest and a possible fine.
Frequently asked questions
What is the child tax allowance in Bulgaria in 2026?
EUR 3,067.75 for one child, EUR 6,135.50 for two and EUR 9,203.25 for three or more, deducted from your annual tax base. At a 10% rate, that saves up to about EUR 920 a year. A child with a disability gives a separate EUR 6,135.50 deduction. Both are claimed in the annual return.
Are social security contributions tax-deductible in Bulgaria?
Yes. Mandatory pension, health and unemployment contributions are fully deducted before the 10% tax applies. For employees, the employer does this through payroll. For freelancers, you deduct the contributions you paid during the year in your annual return. Voluntary contributions have separate caps.
Can freelancers deduct real expenses in Bulgaria?
Not as individuals. Freelancers and people on civil contracts get a fixed 25% statutory allowance instead of actual costs. Royalties and crafts get 40%, and agriculture 60%. If your real costs are higher, a company may suit you better. Compare options in our guide to legal forms of business in Bulgaria.
Are donations tax-deductible in Bulgaria?
Yes. Donations to qualifying recipients such as public bodies, schools, hospitals and registered public-benefit non-profits reduce your tax base by up to 5% of it. Some cultural and specific funds qualify for up to 15%. The total of all donation deductions cannot exceed 50%. Keep the receipt and the recipient's details.
Is there a deduction for mortgage interest in Bulgaria?
Only for young families. A married couple can deduct interest on the first EUR 51,129.19 of a mortgage on their only home, if at least one spouse was under 35 when signing. Only one spouse claims it, through the annual return, with a bank certificate of interest paid.
Do dividends benefit from deductions?
No. Dividends are taxed at a 5% final rate, withheld by the paying company, and do not enter your annual tax base. Deductions only reduce income taxed at 10%, such as salary, freelance fees and rent. Plan deductions around your taxable income, not your dividend flow.
Related guides
- Bulgaria's personal income tax system
- Tax incentives for expats and digital nomads in Bulgaria
- Capital gains tax in Bulgaria
- Specific taxes in Bulgaria
- Bulgaria tax landscape overview
- Personal tax deductions in Romania
- All country tax guides
Sources
- National Revenue Agency (NRA)
- Ministry of Finance of Bulgaria
- State Gazette of the Republic of Bulgaria
- National Social Security Institute (NOI)
- European Commission – Taxation and Customs Union
This guide is general information, not personalised tax advice. See how we research and review.
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