Compiled by Leinonen’s financial experts, this article serves as a guide to the basics of doing business in Bulgaria. Alongside general benefits and considerations, we will discuss the logistics of establishing a business and managing employment, payroll and taxation in the country.

Business in Bulgaria: General Factsheet

5 Benefits of Doing Business in Bulgaria

1. Political and Economic Stability

Bulgaria has been an EU member state since January 2007, and government policy is focused on building a favourable business climate for foreign investors. All the biggest banks are represented in Bulgaria, and the country has signed Double Taxation Treaties with more than 60 countries.

This means:

• Low investment risk
• Low currency risk (local currency has been pegged to EUR since 1998)
• Low budget deficit

2. Strategic Geographical Location

Bulgaria has access to five pan-European transport corridors. Serving as a bridge between Europe and Asia, it has easy access to profitable markets like Türkiye and the Middle East. In 2025, Bulgaria entered the Schengen zone, opening the door to easier trade and movement between other member states. Find out more on the benefits of establishing a business in Bulgaria now it is in the Schengen area in this article by Leinonen.

3. Highly Qualified, Multilingual Workforce

• In 2024, there were 15,737 foreign students in Bulgaria from countries including Greece, United Kingdom, Ukraine, Germany, and Italy
• 1 in 4 people in Bulgaria had a university degree in 2021, according to the National Statistical Institute (NSI)
• 46% of the population of Bulgaria speaks at least one foreign language

“…If you want first-class mathematicians, try looking in Bulgaria.”
Willian Fitzsimmons, Dean of Admissions & Financial Aid, Harvard College

4. Low Production Costs and Taxes

• Flat 10% personal income tax
• 10% corporate income tax
• 0% tax in municipalities with unemployment higher than 25% of the country average
• Business Process Outsourcing (BPO) in Bulgaria saw two digit growth in the last decade, with over 40 thousand employees
• Sofia in top 10 cities in the world for start-ups according to Forbes

5. Balanced Work to Lifestyle Logistics

Day to day living costs in Bulgaria are good, and Sofia is one of the cheapest European cities in terms of office rent. According to the Europe Backpacker Index for 2017, it is the most affordable city and best bargaining place to visit in Europe.

Establishing a Business in Bulgaria

The establishment of a business in Bulgaria is governed by The Commercial Act. Foreign persons who want to establish a business have the same rights as Bulgarians, and there is no limitation on the share participation of foreign legal entities and individuals. It only takes a couple of days to register a new company in Bulgaria; minimum start-up capital has been reduced to only BGN 2 (EUR 1) for limited liability companies, and international VAT registration takes just 10 days.

The following forms of commercial organisation can be set up:

• Sole shareholder limited liability company
• Limited liability company with more than one shareholder
• Sole trader, individual company with unlimited liability
• Joint stock company
• Sole shareholder joint stock company
• Unlimited partnership set up by two or more individuals who carry unlimited responsibility
• Limited partnership, responsibility is set according to agreement
• Partnership limited by shares
• Branch
• Representative office
• Consortium and holding

The registration must be carried out by a professional firm in Bulgaria. It is not possible for foreigners to do business in Bulgaria without incorporation through a permanent establishment. Regardless of the founders’ nationality, all types of entities established in Bulgaria are considered Bulgarian and treated under the Bulgarian legislation system.

Contact us if you wish to get a thorough comparison of establishing a branch office, subsidiary company, or a representative office in Bulgaria.

Accounting in Bulgaria

The Bulgarian accounting legislation is generally aligned with EU legislation. Companies have to observe and keep their accountancy in compliance with the requirements under the Accountancy Act. Fiscal year corresponds to the calendar year, and all companies in the Commercial Register must announce their annual financial statement no later than 30 June the following year.  

Penalties for not submitting the report on time are as follows:

• For companies – 0.5% of net revenue from sales
• For directors – individual financial penalties

Audit is mandatory for companies which meet or exceed two of the below criteria during the current or previous year:

• Balance value of assets towards 31 December is BGN 2 million
• Net sales income for the year is BGN 4 million
• Average number of employees for the year is 50 people

The audit is also mandatory for some of the AD-s and KDA-s, emittents on public markets, insurance companies, credit institutions, additional social contribution funds, and other companies when required by legal acts.

Penalties are as follows:

• For company directors – from BGN 500 to BGN 5,000
• For companies – from BGN 2,000 to BGN 10,000

Micro, small and medium-sized companies (SMEs) can apply National Accounting Standards. Newly established entities are considered SMEs in the year of their establishment, and must comply with these rules for the first and second year.

Companies which for one of the two previous years exceed the following indicators should apply for International Financial Reporting Standards (IFRS):

• Balance value of assets towards 31 December is BGN 8 million
• Net sales income for the year is BGN 15 million
• Average number of employees for the year is 250 people

However, it is worth noting that credit institutions, insurance and investment companies, pension and health insurance funds (and funds managed by these companies) must apply, no matter what.

Leinonen is happy to help with all of your accounting needs in Bulgaria.

Employment in Bulgaria

Employment contracts in Bulgaria are signed between the employee and the employer in a written form, specifying certain statutory requirements.

Employment contracts must include:

• Involved parties
• Physical location where employment will be performed
• Employment position and work description
• Date of signing and of expected commencement of work
• Duration of the contract
• Duration of the working day or week
• Basic and, if applicable, any additional employment remuneration
• Terms and conditions of employment remuneration payment
• Annual paid leaves (basic, extended, additional)
• A common notice period for employment termination

All employment contracts must be registered with the respective territorial division of the National Revenue Agency (NRA):

• In three days after concluding or amendment of the employment contract, but before the first working day
• In seven days after its termination

Employment contracts can be concluded for a fixed or indefinite period of time. Fixed-term contracts can only be signed in exceptional cases specified in the Labour Code. For both types of contracts, employers have the opportunity to assess an employee’s capability for certain work through a probation period not exceeding six months.

Employers report monthly information about employees’ social contributions and personal income tax. Declaration for social contributions should be submitted until the 25^th of the following month. It is an employer’s legal responsibility to pay over employees’ tax and social security deductions to the Bulgarian tax authorities.

Avoid penalties and ensure everything is done correctly and on time by outsourcing your payroll management to Leinonen.

Taxation in Bulgaria

Bulgaria has two levels of taxes: state taxes that go to the NRA, and local taxes paid to municipal councils.

When establishing your company, you need to:

• Register your company for taxation
• Start keeping financial records
• Start preparing a tax return

An annual activity report is not needed if your company shows no activity throughout the year, or if there are no reported revenues and expenditures compliant with Bulgaria’s accounting law.

Being an Expat

Citizens of the EU, EEA and Switzerland can be employed, self-employed or sent on a business trip to Bulgaria without restrictions and without a work permit, since the country is a member of the EU. Special rules are also provided for family members from the EU, EEA and Switzerland.

Expats wishing to work in Bulgaria must apply for a temporary residence permit (consequently a work permit for non-EU/EEA citizens) or a permanent residence (no work permit needed) beforehand. They may arrange this along with their Bulgarian employers while they reside outside of Bulgaria. Alternatively, non-EU/EEA expats may enter the country to look for work, and then leave the country to process the visa. Company Directors or Members of Board of Directors do not need a work permit.

Foreigners looking to reside in Bulgaria have plenty of opportunities to rent apartments, although expats are advised to seek out real estate agencies when looking for accommodation.

Doing Business in Bulgaria? Get Expert Support Today

Leinonen’s financial specialists have been assisting foreign-owned businesses in Bulgaria for almost 15 years. Our local experts stay up to date on the latest tax, payroll, and accounting legislations, providing peace of mind to over 1500 clients across the EU.

Get in touch today to find out how we can support your company’s new or existing Bulgarian venture. 

The post BUSINESS IN BULGARIA appeared first on Leinonen Bulgaria.

In this article, we will explore the latest rules and regulations, so you can reward your valued employees with confidence.

What Types of Bonuses can be Awarded in Bulgaria?

Bonuses can be discretionary (not guaranteed) or nondiscretionary (guaranteed as shown in employment contract). Discretionary bonuses are paid on a performance-based evaluation, and can vary from 0% to 200% of salary, depending on the degree of achievement of goals. Employers do not guarantee a minimum amount of the premium, nor do they owe advance payments during the year.

What Legislations Govern Employee Bonuses in Bulgaria?

In Bulgaria, employee bonuses are treated and taxed in the same way as salaries – 10% income tax, plus social security contributions. Since 2023, bonus income should be taxed retrospectively in the months in which the work was performed, not just in the last month. For example, if a bonus is granted at the end of the year for results achieved across the year, it must be taxed in every month (not just December).

Act. 6, para. 2 of SSC /in force from 01.08.2023/

“The income on which insurance contributions are due includes all remuneration, including accrued and unpaid or unaccrued and other income from employment. Remuneration relating to work done for the past time as quarter, annual and other bonuses is allocated to the days worked during which the work was done.”

Social Security and Health Insurance Contributions in Bulgaria

What are the Current Thresholds for Social Security and Health Insurance?

From January 2025, the minimum base salary for social security payments became BGN 1,077 per month (before adding years of experience). In April 2025, the maximum monthly social security income was raised from BGN 3,750 to BGN 4,130. Any gross pay (including bonuses) in excess of BGN 4,130 is not included in social security calculations.

How Much Social Security and Health Insurance do Employees Contribute?

13.78% of an employee’s gross monthly salary (above the minimum and up to the maximum social security income) goes towards social security payments. This is inclusive of bonuses, and is deducted and paid by the employer on behalf of the employee.

What Social Security and Health Insurance Contributions Must the Employer Make?

Alongside the employee contribution of 13.78%, employers in Bulgaria are required to contribute a minimum of 18.92% (maximum of 19.62%) to the employee’s social security. Similarly to the employee’s contribution, this is calculated based on the total social security income for the month, which includes bonuses.

What Tax Reliefs or Deductions can be Applied to Bonuses?

While tax reliefs are not directly related to bonuses, they can be applied to the overall amount of tax paid through the calendar year (including tax paid on bonuses).

• Child tax relief reduces annual tax base by BGN 6,000 for one child, BGN 12,000 for two children, and BGN 18,000 for three or more children
• Employees with a documented disability can receive a tax relief of BGN 66 net per month
• If an employee has gifted to an official listed charity, the amount gifted can be deducted from their annual tax base
• Any amounts paid for health insurance, social security and life insurance can also be deducted from the tax base

What are the Rules of Holiday Compensation in Regard to Bonuses?

Holiday compensation is calculated based on the previous month’s salary. If an employee received a permanent bonus the month before, the amount is included in the compensation calculations. One time bonuses are not included. Compensation for unused paid leave is only charged 10% tax (no social security). To find out more about holiday compensation and public holidays in Bulgaria, read our article here.

What Best Practices can Employers use to Ensure Correct Taxation of Bonuses?

Measures like clear internal policies, accurate payroll processing, timely reporting, and regular training help employers stay compliant with the latest regulations on the taxation of employee bonuses.

How can Leinonen Bulgaria Help?

With 14 years of experience in Bulgaria, Leinonen’s expert tax advisors are fully equipped to support employers with the taxation of employee bonuses. Our financial specialists have already assisted 1500+ satisfied customers, helping them successfully navigate ever-changing accounting laws across the European Union (EU).

Get in touch today to arrange a consultation and ensure your business is compliant with Bulgaria’s latest accounting, tax, and payroll regulations.

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With this transition, Bulgaria gained access to new economic and trade opportunities. Find out what entering the Schengen zone means for businesses in Bulgaria in this article.

What is the Schengen Zone?

First introduced in 1985, the Schengen area allows free travel between member countries with no internal border controls. Instead, members implement uniform controls at the external borders of the Schengen area. Countries within the Schengen zone also enjoy free movement of goods and services.

Which Countries are Part of the Schengen Zone?

In 2025, the Schengen zone consists of 29 countries. Alongside the majority of countries in the European Union (EU), four non-EU countries are also members: Norway, Iceland, Liechtenstein, and Switzerland. Bulgaria and neighbouring Romania are the latest countries to join the Schengen area.

How Will Bulgaria Benefit From Entering the Schengen Zone?

Being part of the Schengen zone comes with an array of benefits, all of which ultimately help generate financial prosperity and opportunities for member states. The Schengen area is built on strong foundations of trust, unity, and cooperation between its members. As a result, Bulgaria will be naturally able to build closer relationships with other Schengen zone countries.

Free movement of people within the Schengen area could also make Bulgaria a more desirable location for travel and tourism, in turn boosting the economy. And with no tariffs on goods moved between member states, Bulgaria can enjoy prosperous trade relations with other Schengen zone countries. Finally, harmonised systems and constant information exchange between law enforcement agencies within the Schengen area will help facilitate swifter responses to security threats.

Benefits of the Schengen Zone for Businesses in Bulgaria

Entering the Schengen zone is great news for businesses in Bulgaria; it opens the door to financial benefits, smoother supply chains and processes, and new opportunities for growth.

Key benefits include:

• Access to Cross-border Employees. The Schengen area’s free movement currently allows 1.7 million people to live in one Schengen zone country while working in another. Free movement grants businesses in Bulgaria access to a wider pool of talent from neighbouring and nearby Schengen area countries like Romania, Greece, Hungary, and Croatia.
• Free Movement of Services. Not only does free movement mean skilled workers can travel from neighbouring Schengen zone countries into Bulgaria to work, but services can also be freely provided beyond the Bulgarian border. For example, businesses in Bulgaria could explore extending their services across the border into Romania.
• Free Movement of Goods. Movement of goods between Schengen zone countries is free from tariffs or border controls. This will allow businesses in Bulgaria to enjoy reduced administrative costs, and more efficient transportation of goods to and from other Schengen area members.
• Tourism and Hospitality Opportunities. Free travel makes countries within the Schengen zone more attractive and accessible to tourists. Europeans residing in the Schengen area can easily visit neighbouring member countries, and third-country nationals can explore the Schengen area freely for up to three months with a Schengen visa. Entering the Schengen area could therefore bring great economic benefits for tourism and hospitality businesses in Bulgaria.

Navigating Business in the Schengen Area With Leinonen Bulgaria

If you are unsure how joining the Schengen zone will affect your business from a tax and accounting perspective, Leinonen Bulgaria can help. Having amassed 1500+ satisfied clients, our local experts in payroll, tax, and accounting have been diligently supporting businesses in Bulgaria for more than 14 years.

Interested in Exploring Business in Bulgaria?

If you are considering branching out into a new market now Bulgaria has entered the Schengen zone, a solid understanding of regulations around tax and accounting in Bulgaria is vital. Leinonen’s local experts can offer the support you need, so your business in Bulgaria can truly thrive. Contact Leinonen Bulgaria today to arrange a consultation and get the vital knowledge you need on navigating payroll, tax, and accounting in Bulgaria.

The post The Schengen Zone: Benefits for Businesses in Bulgaria appeared first on Leinonen Bulgaria.

As a business operating in Bulgaria, it is important to both understand the cultural significance of these dates, and know your legal obligations.

Which Dates are Public Holidays in Bulgaria?

The following public holidays are paid non-working days in Bulgaria:

• 1 January – New Year’s Day
• 3 March – National Holiday (Bulgaria’s Liberation from the Ottoman Empire)
• 1 May – Labour and International Worker’s Solidarity Day
• 6 May – St. George’s Day, and Day of Valour and of the Bulgarian Armed Forces
• 24 May – Bulgarian Education and Culture, and Slavic Script Day
• 6 September – Unification Day
• 22 September – Independence Day
• 24 December – Christmas Eve
• 25 and 26 December – Christmas Days

Are any Public Holidays Celebrated on Different Dates Each Year?

Yes, the Easter holidays of Good Friday, Holy Saturday, Easter Sunday, and Easter Monday fall on a different date each year in accordance with the Orthodox calendar.

In 2025, they fall on the following dates:

• 18 April – Good Friday
• 19 April – Holy Saturday
• 20 April – Easter Sunday
• 21 April – Easter Monday

Are There any Free Days in Bulgaria for Specific Industries?

Yes, the Day of the Bulgarian Enlighteners is a special non-study and non-working day for educational institutions. This holiday falls on 1 November each year.

What are Employees Entitled to During Public Holidays in Bulgaria?

According to article 264 of the Bulgarian Labour Code, employees scheduled to work on a public holiday are entitled to at least double the wage they would normally get. This applies whether the work is overtime or not.

Entitlements of Non-Christian Employees on Religious Holidays

As a majority Eastern Orthodox Christian country, Christian religious holidays are free days in Bulgaria. However, as per article 173 of the Labour Code, employees who profess a religion other than Eastern Orthodox Christianity are entitled to paid or unpaid leave on the days of their own religious holidays.

Holiday Pay in Bulgaria

Employees who work more than four hours a day in Bulgaria are entitled to a minimum of 20 working days in paid annual leave. This entitlement starts after they accumulate at least four months of employment.

Calculating Holiday Pay in Bulgaria During Public Holidays

If a public holiday falls within an employee’s arranged annual leave, the public holiday should not be counted as part of their annual leave. For example, if an employee has four days of leave organised from 4 September until 7 September, Unification Day (6 September) should not be deducted from their accrued annual leave days. In this case, only three days should be deducted from their annual leave, but they should be paid for four (as public holidays are paid).

Manage Public Holidays in Bulgaria With Leinonen

Boasting a multilingual, highly skilled workforce, and one of the lowest corporate income tax rates in Europe, Bulgaria is fast becoming an attractive location for foreign-owned businesses. But while Bulgaria is an EU member state, it has held onto many unique regulations in everything from accounting to labour relations, as well as its own currency (the Bulgarian lev).

Leinonen has 14 years of experience supporting foreign-owned businesses in Bulgaria, and our vastly knowledgeable team of financial specialists are ready to take your business to the next level. Get in touch today to find out how we can help you navigate Bulgaria’s unique local laws and customs to maximise your success.

The post Public Holidays in Bulgaria: A Guide for Employers appeared first on Leinonen Bulgaria.

Pursuant to Art. 128b, para. 3 of the Labor Code (LC) with Decree No. 71 of May 10, 2018 of the Council of Ministers, an Ordinance was adopted on the type and requirements for the creation and storage of electronic documents in the labor file of the employee (the Ordinance).

The Ordinance regulates:

• the type of electronic documents that can be part of an employee’s file;
• the requirements for the creation and exchange of electronic documents between the employee and the employer, as well as the certification of its delivery (trusted e-delivery system);
• the requirements for the storage of electronic employment documents.

It should be emphasized that an option for digital employment records is legally ensured however, possibility to create and store employment documents on paper continues to exist.

In the Internal Rules, the employer must define:

• the type of documents that are created and stored as electronic documents;
• the type of electronic signature used by employees.

The costs for the construction, maintenance, and use of an information system for electronic employment documents are at the expense of the employer (Article 2, Paragraph 2 of the Ordinance).

The formal and explicit consent of the employee for the exchange of electronic employment documents between the parties is a must. 

As a minimum, a system for electronic employment documents must include the following functionalities:

• Ensured data protection (encrypted environment and multi-factor authentication (MFA))
• Remote elctronic identification of signatories (employer and employees).
• Singing of documents by employer with QES (qualified electronic signature) and by employee’s side with Universal or Basic electronic signature type.
• Integrated Electronic registered mail according to the eIDAS Regulation*.
• Constant access of all employees to the electronic platform and his/her file with documents. Acceses must be ensured after termination of employment relations as well.
• All costs are covered by employer.

*Pursuant to § 1, Item 5 of the Additional Provision of the Ordinance “electronic registered mail service” is the concept defined in Art. 3, item 36 of Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and authentication services in electronic transactions on the internal market and on the repeal of Directive 1999/93/EC.

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What is E-invoicing?

Electronic invoicing (e-invoicing) is a contemporary approach to accounting that allows businesses to digitally send and receive invoices in a way that does not require traditional paperwork. In most cases, e-invoices are sent directly from one party’s e-invoicing application to another’s, requiring little to no manual input. The e-invoice is delivered in a digitalised format that can be automatically read and processed by the recipient’s system. E-invoices are sometimes referred to as EDI invoices or e-bills.

E-invoicing in Bulgaria

While e-invoices are recognised as official documents by both Bulgarian and European legislation, a common structured e-invoicing system is not yet available in Bulgaria. This means that e-invoices are typically sent via email, rather than directly from one accounting system to another. Though this does remove an element of automation from the process, there are still an array of benefits of e-invoicing in Bulgaria.

Benefits of E-invoicing for Businesses and Accountants

A 2019 Global Report by Webexpenses and The Association of Certified Accounts Payable Professionals (ACAPP) found that for two thirds of businesses, invoice processing alone took upwards of five days each month. E-invoicing is a valuable time-saving solution, offering streamlined convenience far beyond its paper counterpart.

E-invoicing can greatly reduce the risk of human error, leading to a more secure experience for businesses and accountants. For example, errors in sequencing and duplication of numbering, as well as incorrect cancellation or archiving of documents can be minimised, potentially saving a great deal of time and stress. Some modern e-invoicing applications also use integrated AI to provide suggestions for (or automated) bookkeeping, making the whole process much more effortless and organised for accountants and clients alike.

When e-invoices are sent digitally, the potential of them getting lost in transit or sent to the wrong address is also drastically reduced. And by eliminating the need for paper and postage, it is a more environmentally friendly method of accounting. In practice, e-invoicing can also save valuable desk and filing space for businesses.

In Summary, the key Benefits of E-invoicing are:

• Saving time and energy.
• Reducing the risk of human error.
• Improving security.
• Reducing the chance of invoices getting lost.
• Being more environmentally friendly.
• Saving physical archive space.
• Allowing for effortlessly organised bookkeeping.

Security Measures for E-Invoicing in Bulgaria

As with any system for businesses, there are vital security measures and regulations to consider when introducing e-invoicing. For example, e-invoices must meet the legal requirements of article 7 of the Civil Code (C), and articles 114 and 115 of the Law on Value Added Tax (VAT).

It is also important to note that an e-invoice being sent digitally does not automatically make it an electronic document that must be signed with an electronic signature. When an e-invoice is issued, it is accepted as a technical carrier of information (like a PDF file), which can then be printed to a hard copy.

Therefore, according to Bulgarian legislation, no seal or signature is required when issuing an e-invoice (just like a paper invoice). However, the Accounting Law states that while not mandatory, an invoice can be issued as an electronic document. If a business chooses to do so, it must be issued in accordance with the Electronic Document and Electronic Signature Law.

While there are no industry specific considerations for e-invoicing in Bulgaria, it is important to stay informed on Bulgarian requirements for invoicing (e.g. including invoice number, date of invoice, client name and address, payment due date etc.) An accountant can offer up to date guidance on current best practices in this respect.

Moving From Paper to E-invoicing in Bulgaria

Transitioning from paper to e-invoicing is fairly simple and will save you countless admin hours in the long run. You will need to choose an invoicing application that works for you. In Bulgaria, some of the most popular invoicing applications are inv.bg, e-faktura and invoicepro.bg.

Because a common structured system has not been implemented in Bulgaria, e-invoices cannot yet be automatically processed using these systems. This is where an accountant can help. An experienced accountant can work with different invoice pre-booking applications and accounting software, developing export and import files that allow invoices to be processed swiftly and semi-automatically.

How Leinonen Accounting in Bulgaria can Help

Due to the lack of a common system, e-invoicing in Bulgaria can be a little more complicated to set up for maximum efficiency. Therefore, it is important to have an accountant by your side that is familiar with navigating Bulgarian regulations. If your company deals with a lot of documents, moving to e-invoicing could make your life a lot easier.

Using an OCR-recognised application with AI integration for automatic invoice pre-booking, Leinonen can completely eradicate the need for paper invoicing. Using this system, our experienced accountants have already helped numerous clients discover simpler and more accurate invoicing processes.

Accounting in Bulgaria is fast changing, and as e-invoicing steadily becomes the norm, we will help you reap every benefit at the earliest possible opportunity.

To find out how Leinonen can transform your business’ invoicing process with e-invoicing, get in touch and arrange a consultation today.

The post Making the Switch to E-invoicing in Bulgaria: Everything you Need to Know appeared first on Leinonen Bulgaria.

Leinonen shares the same values as the chairman Levon Hampartzumyan said at the opening speech – business ethics, responsible and sustainable business development, and success achieved through compliance.

https://www.bblf.bg/bg/sabitiya/1808/bfbl-otbelyaza-svoyata-25-godishnina

The post Leinonen Bulgaria celebrating 25th anniversary of the Bulgarian Business Leaders Forum appeared first on Leinonen Bulgaria.

The reduction in tax base for parents who meet the requirements for tax benefit for 2023 and the amounts parents can claim are as follows:

• BGN 600 for one minor child – tax base decrease with up to BGN 6,000;
• BGN 1,200 for two minor children – tax base decrease with up to BGN 12,000;
• BGN 1,800 for three or more minor children – tax base decrease with up to BGN 18,000;

For underage children with disabilities, the amount to be received is up to BGN 1,200 – tax base decrease with up to BGN 12,000;

The tax relief can be used up to the amount of the annual tax bases under Art. 17 of the Personal Income Tax Act and provided that the other parent will not use the reduction for 2023 tax year.

When the amount of the tax relief is higher than the sum of the annual tax bases, the difference can be used by the other parent, by submitting an annual tax return under Art. 50 from PIT Act.

Child tax credits can be claimed in the following ways:

• Through the employer: between November 30 and December 31, 2023, parents must submit to their employer the declarations for the use of tax relief for children under Art. 22c, para. 8 of the PIT Act, resp. according to Art. 22d, para. 7 of PIT Act (for children with disabilities).
• Independently from the parents by submitting the annual tax return under Art. 50 from PIT Act until 30.04.2024

For further questions please don’t hesitate to contact Leinonen Bulgaria team.

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To effectively navigate the Bulgarian logistics landscape, it is essential to have a solid understanding of the country’s accounting practices, as well as its regulatory framework. This article dives into the field of accounting within the logistics industry, drawing on valuable insights from Leinonen Bulgaria.

Regulation for International Carriage of Passengers and Cargo in Bulgaria

Bulgaria’s normative acts to road transport are in alignment with European Union regulations. These include the Road Transport Act, Ordinance № 11 of 31.10.2002 for the international carriage of passengers and goods, and Council Regulation (EEC) No 881/92 of 26 March 1992 and No 1071/2009.

Various authorities, such as traffic police, customs, and the Ministry of Transport, enforce these regulations. It is important for foreign road carriers to ensure compliance with these regulations while operating in Bulgaria.

Issuing Community licences to road hauliers in Bulgaria:

The competent authority in Bulgaria – Executive Agency “Road Transport Administration”  issue the Community licence for renewable periods of up to five years. The licence is issued on the name of the haulier and is non-transferable.

Community license shall be issued to haulers who meet the requirements for:

• reliability (reputation);
  Requirements reliabilities are met when transport managers of sole traders and companies have not been convicted for intentional offenses under the Criminal Code or deprived of a conviction the right to exercise the transport activity.

• professional competence;
  Prove for professional competence is when the transport manager has Driver Certificate of Professional Competence (Driver CPC) and minimum secondary education.

• Financial Stability – Fs ≥ 1;
  Financially stable within the meaning of the regulation is a person/entity that has sufficient resources that can guarantee the normal startup and the operation of the transport undertaking in the amount of € 9,000 for the first vehicle, for each subsequent truck – amounting of € 5,000. If the amount of own funds capital of the carrier fail to prove their financial stability, the insurance contract or bank guarantee can be concluded accordingly issued to prove their financial stability.

• Place of establishment in Bulgaria – declaration under provision of Regulation EO Nr. 1071/2009 for:
• Rent office contract if you do not own office place.
• Maintenance contract with a garage and agent to do safety inspections and repair vehicles if you do not do this yourself.

The fee to apply for a Community license is 250 EUR. The legal deadline for issuing the Community license is within 15 calendar days from the date of application.

Foreign carrier’s documents:

• EU Licence, European Conference of Ministers of Transport  (ECMT) Authorisation, Bilateral or Transit Transport Authorisation; Authorisation for non liberalised passenger transport services;
• ADR permit.

Driver’s Documents (foreign vehicles):

• Proof of ID;
• Driving permit;
• AETR record sheet, tachograph discs, digital tachograph;
• ADR training certificate;
• Employment certificate.

Foreign vehicle’s documents:

• Registration certificate (grey card);
• Regular technical inspection;
• ECMT technical certificate;
• Compulsory nationality plate;
• ADR certificate of approval;
• ATP certificate of compliance;
• Hire or leasing contract.

Transport documents on board (foreign vehicles):

• Consignment note / CMR international consignment note;
• Loading list (groupage);
• ADR transport document, consignor’s declaration, ADR security instructions;
• Container packing certificate;
• Transfrontier movement of waste document (Basel Convention)

Working force: drivers

The backbone of any successful transport company is its drivers. In Bulgaria, drivers obtain their professional driving licenses from accredited driving centers, subject to meeting specified requirements outlined in the Law for Road Transportation.

Driver qualifications are crucial, with official diplomas and certificates being recognized by transport companies, particularly in the handling of dangerous goods (ADR). Due to a shortage of professional drivers in Bulgaria, companies may consider employing drivers from neighboring countries. This process typically takes around 3 months and requires a work permit issued by the Ministry of Internal Affairs.

Accounting and payroll related to transport field.

General obligatory social fees in Bulgaria for drivers are the following:

Maximum monthly amount of the insurable income during 2023 – 3 400 BGN

Personal Income tax – 10 %

Average salary for international drivers employed in Bulgaria is around 1 500 – 2 000 EUR including paid diem, compensations and bonuses.

Accounting specific tasks:

• Industry specific Licences and certificates processing and booking
• VAT refunding from other EU countries
• Booking of assets and trucks depreciation plan
• Tracking fuel consumption
• Costs allocation  to transport rates
• Processing of prime documents for posting of drivers
• Pety-cash for drivers

In summary, Bulgarian logistics sector, with its strategic location and infrastructure, offers a promising landscape for businesses in the transport industry.

Navigating the regulatory and accounting aspects is crucial for success. By leveraging the insights from Leinonen Bulgaria, businesses can make informed decisions in this dynamic market. For tailored advice and further information, reach out to Albena Stoyanova, Country Manager at Leinonen Bulgaria.

The post Navigating Bulgarian Accounting Practices in the Logistics Sector appeared first on Leinonen Bulgaria.

The Bulgarian Business Leaders Forum unites organizations with shared values that develop their business in a responsible, transparent and ethical manner. This is a platform for exchanging good practices and ideas for the development of the business and social environment in Bulgaria. The Leaders Forum engages and works with key figures from politics, business, diplomacy, the non-governmental sector and the media to transform society together.

*On the photo, the chairman of the BBLF, Levon Hampartzumyan, presents the membership plaque to Albena Stoyanova – Country Manager of Leinonen Bulgaria

The post Leinonen Bulgaria became a member of Bulgarian Business Leaders Forum appeared first on Leinonen Bulgaria.