Bulgaria

Individual - Significant developments

Last reviewed - 04 January 2021

As of 1 January 2021, the minimum monthly social security insurance base is increased to 650 Bulgarian lev (BGN) (from BGN 610 for 2020) and the maximum monthly social security insurance base remains the same as for 2020 at BGN 3,000.

Changes in the term for reporting and payment of personal income tax (PIT) due by sole traders and producers of agricultural products

The term for reporting and payment of PIT due by sole traders and producers of agricultural products is changed. They can report and pay their PIT within the period between 1 March and 30 June of the following year (compared to 10 January and 30 June in 2020).

Sole traders and producers of agricultural products can benefit from a 5% discount, provided that they report and pay their PIT due by 31 March of the following year (compared to 31 May in 2020).

The change will also apply for the annual PIT return for 2020.

Introduction of a new tax relief for improvements and/or repairs made to a real estate property located in Bulgaria

A new tax relief for improvements and/or repairs made to a real estate property in Bulgaria is introduced. Both local and European Union (EU)/European Economic Area (EEA) established individuals can benefit. The tax relief provides for reduction of the total annual tax base calculated under the Personal Income Tax Act (PITA) with the payments made during the year for work done in relation to improvements and/or repair of a real estate up to BGN 2,000. The tax relief is applicable under certain specific conditions.

The new tax relief will apply for income obtained in 2021.

Increase of the tax incentives for children and children with disabilities (one-off) for 2021

Currently, the tax incentives for children provide for reduction of the total annual tax base calculated under the PITA of the parent in the following amounts:

  • BGN 200 in case of one child (i.e. BGN 20 tax savings per year).
  • BGN 400 in case of two children (i.e. BGN 40 tax savings per year).
  • BGN 600 in case of three and more children (i.e. BGN 60 tax savings per year).
  • BGN 2,000 in case of taking care for a child with certain disabilities as specified in the law (with 50% or over 50% degree of disability).

The above amounts are increased for 2021 as follows:

  • BGN 4,500 in case of one child (i.e. BGN 450 tax savings per year).
  • BGN 9,000 in case of two children (i.e. BGN 900 tax savings per year).
  • BGN 13,500 in case of three and more children (i.e. BGN 1,350 tax savings per year).
  • BGN 9,000 in case of taking care for a child with certain disabilities as specified in the law (with 50% or over 50% degree of disability).

The change will apply for income obtained in 2021.