Filing an annual tax return is a fundamental obligation for both businesses and individuals based in Bulgaria. Understanding the requirements, deadlines, and potential benefits can help ensure compliance and optimise your financial situation.
In Bulgaria, all legal entities (companies, NGOs, etc) registered under the Commerce Act (including EOOD, OOD, AD, DPK, etc.) are required to file an annual corporate tax return, regardless of whether they operated during the year — unless explicitly exempt (e.g., dormant companies with no activity). On the individual side, every Bulgarian tax resident who has earned income outside of employment contracts — such as from freelance work, rental income, foreign income, business activity, or as a sole proprietor — must file a personal income tax return. Additionally, individuals who wish to benefit from tax reliefs (e.g. for children, charity, etc) must also file a return, even if all income was taxed at source. This will be the only way to use the benefits provided by law, other wise they will be lost.
For Businesses
Corporate Income Tax Return
- Tax Rate: A flat rate of 10% applies to corporate profits. This is a universal tax rate, which is valid for all the entities, regardless of their activity or how big they are (there is one European Regulation for the big corporation with more than 1,5 billion turnover to pay at least 15%, but it is not widely used in Bulgaria).
- Filing Period: Annual tax returns must be submitted between March 1 and June 30 of the year following the tax year.
- Advance Payments:
As per the activity of the company and how big the profit is, there could be advance tax payments. Below you can see what are the 3 options:
- Monthly: Required if the company’s net sales revenue exceeded BGN 3 million in the year before the preceding year.
- Quarterly: Required if net sales revenue was between BGN 300,000 and BGN 3 million in the year before the preceding year.
- Exemption (the usual case): Companies with net sales revenue below BGN 300,000 or newly established companies are exempt from advance payments.
- Payment Deadline: Any outstanding tax must be paid by June 30 of the following year. Basically, the submission deadline is also the payment deadline. It is strongly recommended not to wait until the last moment and start preparing (or look for help with it) at least 1-2 month prior to the deadline. This will spare you a lot of nerves, time and potential penalties for delay or wrong information submitted.
- Additional Requirements (Annual Financial Statement): Alongside the tax return, companies must submit an Annual Financial Report in the Trade Register, unless they had no activity during the tax year. This should be done by the end of September of the year following the tax year.
It is important to understand that Annual Tax Return and Annual Financial Statement are not the same documents. Submitting one of these, doesn’t grant you the right not to submit the other. Both have different function and are mandatory for the company to continue its business activity without any flaws.
For Individuals
Personal Income Tax (PIT)
- Tax Rate: A flat rate of 10% applies to most personal income. There are exclusions from that, but here we will review only the general situation. If you have any specific questions in that regard, you can always reach out to us and we will explain further in detail.
- Filing Deadline: The annual tax return must be filed by April 30 of the year following the tax year. Early Filing Discount: A 5% discount on the tax due is available if the return is filed electronically by March 31, and the tax is paid by the same date. The discount is capped at BGN 500.
- Who Must File:
- Individuals with income not subject to final tax (e.g., rental income, freelance income).
- Individuals with foreign income.
- Sole proprietors and individuals engaged in business activities.
- Sole Proprietors (it is not used so often, but good to be mentioned):
- Tax Rate: 15% on taxable profit.
- Filing Period: Between March 1 and June 30 of the year following the tax year.
Corrections
There is a possibility for making corrections: A one-time correction to the tax return can be made without penalty by September 30 of the year following the tax year. This is in case you have missed something to declare or there is a mistake in the declared data. Yes, you won’t be able to use the 5% discount, but at least not penalties will arise and you will be compliant.
Key Points that you need to be aware of
- Timely Filing: Adhering to the filing deadlines is crucial to avoid penalties and interest. This is maybe the most crucial part of it – not declaring is far worst than declaring and delay the payment. The penalties are bigger and at the end, you will pay penalty and also the taxes.
- Electronic Filing: Utilizing the National Revenue Agency’s online platform can streamline the process and provide access to pre-filled information.
- Professional Assistance and Electronic Filing: Consulting with legal and accounting professionals can help you with preparing and submitting the tax return. Also, they will represent you if any further actions are required in that regard. We are utilising the National Revenue Agency’s online platform which streamlines the process and provides access to pre-filled information.
For personalized assistance with your Annual Tax Return, feel free to contact our specialists from Accountly.bg team. We are here to help you ensure compliance and optimize your tax obligations and public obligations. If you have any questions for us, don’t hesitate to contact us anytime.
