Tax Incentives for Expatriates and Digital Nomads in Bulgaria
Bulgaria, a member of the European Union, offers a welcoming environment for expatriates and digital nomads seeking tax advantages. The country's tax regime provides specific incentives designed to attract skilled professionals and remote workers.
Eligibility Criteria
To qualify for tax breaks as an expatriate or digital nomad in Bulgaria, individuals must meet the following criteria:
- Expatriates: Individuals who are not Bulgarian citizens or permanent residents but have established residency in Bulgaria for tax purposes.
- Digital Nomads: Individuals who work remotely for companies outside of Bulgaria and have established temporary residency in the country.
Types of Tax Breaks
Expatriates and digital nomads in Bulgaria can benefit from the following tax breaks:
- Flat Tax Rate: A flat tax rate of 10% applies to all income earned in Bulgaria, including employment income, business income, and rental income. This rate is significantly lower than the standard income tax rate of 20%.
- Tax Exemption on Foreign Income: Income earned outside of Bulgaria is generally exempt from Bulgarian income tax. This exemption applies to both employment income and business income.
- Social Security Contributions Exemption: Expatriates and digital nomads who are not employed in Bulgaria are exempt from paying social security contributions.
Application Process
To claim these tax breaks, expatriates and digital nomads must register with the Bulgarian tax authorities and obtain a tax identification number (TIN). The application process involves submitting the following documents:
- Proof of residency in Bulgaria (e.g., rental agreement, utility bills)
- Employment contract or business registration documents
- Proof of foreign income (e.g., bank statements, invoices)
Legal References
The tax incentives for expatriates and digital nomads in Bulgaria are established in the following legal documents:
- Corporate Income Tax Act (Article 13)
- Personal Income Tax Act (Article 12)
- Social Security Contributions Act (Article 4)
Rationale and Objectives
The Bulgarian government has implemented these tax breaks to attract skilled professionals and digital nomads to the country. These incentives aim to promote economic growth, foster innovation, and enhance Bulgaria's competitiveness in the global market.
If navigating the complexities of Bulgarian tax laws seems daunting, consider seeking professional guidance. Heavnn offers a seamless solution to simplify your tax planning journey in Bulgaria.
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