How to Pay Only 4% - 7.5% Tax in Bulgaria 🇧🇬 

Always a pleasure! Anything you'd like to see next?

What your freinds do?

@@vimalcurio They pay regular tax rate of 10% or 5% on dividends.

Always a pleasure ! How long have you been there?

@@OffshoreCitizen Just a few weeks. I'm really liking Bulgaria so far. Watching your videos helped me pull the trigger.

@@mrkcur Hey there, sorry to bother, will you be so kind to shed some light on this for me?.. I'm a Bulgarian citizen even, living in the UK so far, and I tried to talk to an accountant there in BG, which couldn't provide a proper professional consultation on taxation, for some reason🤦‍♂️ My question is super straightforward: I started to work as a freelancer (part-time) and planning to move to Bulgaria and become a resident back there. From what I know, being a freelancer as a physical entity I'll have to pay 10% Tax (which sounds good) + around 20% Osigurovki (national insurance), which already makes it at least 30% of all my income.. which is way too much, in my humble opinion. Some people say that it's much cheaper to register a LLC company in Bulgaria, however there's no clear information on how much taxes a company pays there + Osigurovki etc. If you could please share the information you hold, by any chance, on all the above, I'd really appreciate mate🙏🤲 thanks in advance!

You're welcome! It is! We've made many videos on Bulgaria. Have you seen some of them?

@@OffshoreCitizen Yes, at least a couple of them. Keep up the good work.

@@OffshoreCitizen I am a citizen of a EU country. I currently live and work in Turkey. How can I make my tax residence in BG ?

@@OffshoreCitizen How is the option to use both a company and pay yourself as an individual at the same time supposed to work? Bulgaria has laws against ostensible self-employment. I hear everywhere that you either have to pay yourself a salary or pay out dividends, but that prevent you from getting the 25% deduction that freelancers get.

Depends on substance, there's no one size fits all, need to look at it case by case to find the best option

Thank you! Are you in Bulgaria?

@@OffshoreCitizen I’m living in Dubai at the moment but from Bulgaria 🇧🇬

Sounds like a great idea! How did you like today's video?

@@OffshoreCitizen I always enjoy learning something new about money and other countries.

Did you find a solution yet?

Right. Are you considering becoming a resident there?

No!They clearly said they won't raise the taxes.

The new government will not increase taxes for sure 100%! They are really open for foreign investors. Other thing they will do it's lower the time and needs for company licenses and make most of them to be done online. Their motto is zero tolerance to corruption, witch is going to be better for any investor.

They've said no but then again you can't trust politicians so...

As far as I know dividends are taxed in origin, so 5% just once or whatever the dividends tax is

The US LLC will usually be subject to cfc rules

@@OffshoreCitizen How am I going to trigger them if I don't live in Bulgaria?

If you don't live in Bulgaria you wouldn't have the 5% either

I get the sense Michael wasn't suggesting that. My Bulgarian accountant said you can't pay yourself directly from your own company as if you are a contractor for services. If you pay yourself directly from the company, it needs to be in the form of a salary or a dividend. She said the usual thing was to use a dividend (10% + 5% for an effective 14.5%). Michael brought up an interesting point that social security caps out so being paid a salary might be better if you pay yourself a high salary?

​@@mrkcur What is the suggested structure then? Doing what I described but with a non-Bulgarian company? Sounds like crucial data is missing. Or do you mean that said salary is taxed at the self employed rate if you're registered as such?

@@enimos It’s interesting that Michael has a way where you can have a company where you can take deductions and then somehow receive the profits as self-employment income taxed only at 7.5%. But he didn’t explain how, and I don’t know.

@@mrkcur indeed, would be glad to hear how

@@enimos not thrue

Exit tax on companies was part of ATAD actually a lot of the EU doesn't really have it in any meaningful sense personally

No dividends are the 5%, corporate tax is 10%

No doesn't work that way

You don't need b1 to be classed as self employed

@@OffshoreCitizen everywhere I google says you need a 'freelancing permit' and one of the requirements for this is b1 certificate

It sure is 😄 Are you in Bulgaria?

@@OffshoreCitizen I'm flying to Sofia next month. 😃🛬🇧🇬

Very hard to find good accountants in Bulgaria and they tend to be very overpriced unfortunately. My experience is you generally need a mediocre accountant and then micro manage them a little

@@OffshoreCitizen Thank you. I completely agree what you're saying. I had an accountant in Ireland and there was never any attempt to encourage write-offs or lower taxes.

Your comments still stand. My accountants answer my emails as succintly as possible. I'm paying 200 EUR per month for them to do probably 15 minutes of work on my account. Bulgaria was a great start, but my tax rate for 2023 is looking to be about 15-20%, which is great compared to back home in Norway, but now I am eyeing Georgia for 1% flat with a Small Business arrangement. I will also consider Cyprus while I'm at it, as long as I can get a tax exemption and have Norway acknowledge it without getting finnicky. After 1 year in Bulgaria I have to agree with Offshore Citizen that the Bulgarian winter is nothing to write home about, except to say "it's really quite too cold." I think it would be ideal to use Bulgaria as a summer paradise between April and November, while having tax residence elsewhere, unless you make something like 1 million EUR a year and can structure things to get a comfortable sub 10% overall tax rate. It may very well be that I could have gotten a lower tax rate, but I really can't see the point of optimizing here when half the year is a cold European winter. Georgia, Cyprus and of course Oman, UAE, Qatar all seem like better tax jurisdictions to me as a freelance translator with a somewhat limited cap on my annual income potential. Georgia may have some issue which Offshore Citizen has pointed out, but they may not be an issue to me personally.

Please book a call to discuss

Yeah I talked about that but it's capped pretty low. If you make decent income it's not a big deal as a share of the total

What's the cap?

@@tomson5894 35% from the income or max 1000 eur per month lol

@@moiaccaunt Gosh... damn it, 35% of the income... and THAT is low?😶

@@PaulKalak 26% of 1700 is the cap

pay your self a loan from your company!

You'd pay 10% + 5%

Yes

Bulgaria doesn't have an LLC so it's a bit of a hybrid mismatch so depends on how it is treated

@@OffshoreCitizen I am a resident in Bulgaria and thinking about setting up a US LLC for various reasons. I also have a Bulgarian Ltd, but it seems to me that it might make things extra complicated to have the Bulgarian Ltd own the US LLC. Do you have any recommendations on someone who may be able to give a reliable answer on how to handle the taxation for US LLC income in Bulgaria?

You'd need to do some fancy tricks

Well VAT is a consumer tax not a business tax. The business is just the collector

Revenue that's why they give you the discount because they assume you've got expenses, it's useful when you can create 100% margins

Bulgaria taxes worldwide income

@@OffshoreCitizen Foreign income is taxed at source when invoicing from Bulgaria, by every EU country … So! the 10% does not apply, rather the normal tax rates will apply and normally deducted by the paying party.

Why would you use BG at all if you didn't live there?

This is what I’m asking: what is the tax rate in case I just run business in BG but don’t live there?

They are typically subject to withholding taxes

No you can't use this directly as a trader you need to build around it to do that

@@OffshoreCitizen Meaning setting up a company?

@@OffshoreCitizen But do you need to start a company to build around it?

Hey there, did you get any sort of an answer to your question?.. I'm trying to find the answer to the same question, and the info is so controversial everywhere...🤦‍♂️ I also wonder, if you trade stocks as well, what's the taxation then? Is it the same as with crypto, or is it different....

What's the idea to buy asset? And flash it in January?