However there are some types of contracts (civil contract, copyright treaty) which actually allow the possibility of non-taxable income – part of the sum is sort of personal allowance (between 25 and 40 percent), and the rate of 10 percent is paid only the base of all that is left.

These are main forms of direct taxation. There are also several types of indirect taxation in Bulgaria. Value-added tax is one of it, this form of taxation is widespread around the world and is used virtually in all European countries. The rate for Bulgaria is 20 percent – an average level for European Union. All traders have to go through VAT registration if they surpass the threshold of 50 000 leva (roughly 25 000 Euros) in a span of 12 months or less. VAT returns in Bulgaria are submitted on a monthly basis.

The other main form of indirect taxation is Excise. It is applied on the sale of products like tobacco, alcohol, coffee, excise is included in the price of gasoline and automobiles and it is also applied on the sale of electric energy.

Bulgaria has entered into agreements for the avoidance of double taxation with 53 countries.