Bulgaria for Individuals – Tax Residency and Personal Income Optimisation in the EU
As tax systems across Western Europe grow more complex and less predictable, a growing number of individuals—especially freelancers, remote workers, digital nomads, and retirees—are exploring Bulgaria as a destination for legal, low-tax living within the European Union.
Bulgaria offers not only one of the lowest personal income tax rates in the EU, but also a streamlined residency process and access to full legal protections under EU law.
Flat 10% Personal Income Tax
The core advantage is simple: Bulgaria imposes a flat 10% personal income tax on nearly all sources of income. This includes:
- Employment or director’s salary
- Rental income
- Royalties and intellectual property earnings
- Interest on deposits
- Self-employed or freelance income
In addition, Bulgaria applies just 5% tax on dividend distributions, and pensions are entirely exempt from taxation.
Residency and Legal Requirements
In order to become a tax resident in Bulgaria, individuals must satisfy several legal conditions:
- Be an EU citizen (or qualify under applicable immigration law)
- Obtain a Bulgarian residence card
- Register a local address (rented or owned)
- Show proof of income or business activity
- Undergo a standard background and compliance check
Once granted residency, the individual is assigned a Bulgarian national ID number, enabling full integration into the tax and healthcare systems, and the ability to open a bank account.
Important: Simply registering a company does not automatically confer tax residency. Legal residence must be granted by the Ministry of Interior.
Structuring Income for Tax Efficiency
Many individuals optimise their tax situation legally by:
- Drawing a monthly salary from their own Bulgarian company (10% income tax)
- Declaring business expenses through the company (where appropriate)
- Receiving dividends at 5% tax when profits are distributed
In most cases, social security contributions are capped—making the Bulgarian system far more attractive than Western jurisdictions, particularly for higher earners.
Lifestyle and Cost of Living
Beyond taxation, Bulgaria offers high quality of life at low cost. Residents benefit from:
- Low cost of living (housing, food, services)
- Excellent internet infrastructure
- Access to EU healthcare and education systems
- Proximity to both mountains and seaside
Legal and Fiscal Stability
Bulgaria is an EU member state and fully adheres to European fiscal regulations, banking laws, and anti-money laundering standards. There are no offshore loopholes, and income must be reported transparently.
However, for those willing to reside in Bulgaria legally and operate transparently, the benefits are substantial.
Conclusion
Whether you are a digital professional, a location-independent entrepreneur, or someone seeking to simplify their tax affairs, Bulgaria offers an effective and lawful pathway to personal tax efficiency.
At Taskova Legal Services, we support individuals with:
- Residency and immigration applications
- Personal tax registration and planning
- Company formation and structuring
- Ongoing legal and compliance advice
Contact us today to learn how we can assist in building a clear and secure legal foundation for your life in Bulgaria.
