Charge to
tax
A charge to
Bulgarian tax is dependent on whether the income arises in Bulgaria, and the
extent of the charge will be determined by an individual’s tax residency
status.
Residence
Exposure to
Bulgarian tax will be determined by the expatriate's residence and domicile
status.
Tax
Residence
Tax
residence in Bulgaria is determined by the expatriate's actual presence within
a tax year. The Expatriate will be treated as Bulgarian tax resident where
he/she spends 183 days or more in Bulgaria in any tax year.
Domicile
As
mentioned above the concept of tax residence is considered in conjunction with
the concept of domicile. The test for domicile is complex and based on
substantial case law. Usually an individual will have a domicile in the country
where they were born.
Income from
employment
A Bulgarian
tax charge arises on employment income derived from duties performed in
Bulgaria.
Assessable
employment income includes all wages, salaries, overtime pay, bonuses,
gratuities, perquisites, benefits etc.
Source of
employment
As
mentioned above, where duties are performed in Bulgaria, any remuneration
received in respect of these duties is treated as Bulgarian-source income, and
subject to Bulgarian income tax regardless of the expatriate's tax residence
status (subject to the relevant Double Taxation Agreement).
Benefits
(in kind)
In general
where the benefit is enjoyed in Bulgaria, a Bulgarian income tax charge will
arise.
Expatriate
concessions
Not
applicable
Relief for
foreign taxes
Where
income has been subject to tax twice - in Bulgaria and in a foreign
jurisdiction - relief can be granted by the Bulgarian Revenue Authority where
provided for in the relevant Double Taxation Agreement.
Deductions
against income
Certain
expenses can be provided by an employer free of income tax where they qualify
as wholly, exclusively and necessarily incurred in the performance of the
employment duties.