US-Bulgaria Treaty for Avoidance of Double Taxation
In February 2007 Robert M. Kimmitt Deputy Secretary of State for USA and Plamen Oresharski Minister of Finance for Bulgaria signed bilateral agreement for avoidance of double taxation between USA and Bulgaria. The treaty regulates how the tax codes should be applied in case residents or companies of the contracting states derive income in any or both of the contracting states. The taxation of income from real estate property and business enterprises are discussed in articles 5, 6 and 7 of the treaty. The full text of the treaty is linked below.
Corporate Income Tax
Corporate tax on the annual tax returns in Bulgaria is set at 10%. Taxable persons are local entities, including unincorporated entities, conducting business in the country for the profits and income from all sources in Bulgaria and abroad. Foreign entities are taxed for the profits earned through a permanent establishment in Bulgaria or for the sale or transfer of property as well as for the income from a source in Bulgaria. The full text is linked below.
Income tax on Natural Persons Act
Income tax on individuals is 10%. Bulgarian residents are subject to tax on their income from sources in Bulgaria and abroad (including the business as a sole trader) and the incomes of foreign individuals are taxed only if they are acquired from sources in Bulgaria. The full text is linked below.
Value Added Tax Act
The value added tax in Bulgaria is 20% except for certain hotel services which are levied with VAT of 9%. There are also zero-rated supplies specified in the law. The full text is linked below.