Bulgarian Treasury enforces income tax for overseas landlords

According to Bulgaria law, all rental income paid to private owners in Bulgaria is taxable at 10%, regardless of where the owner is resident.

Overseas landlords might reside in countries with dual taxation treaties (such as the UK) and as such can deduct the tax paid in Bulgaria from their UK tax bill, but payment of the initial tax is still due to the Bulgarian Revenue Agency.

Foreign landlords renting their property to Bulgarian companies have their taxes deducted at source (by law it is the tenant’s responsibility to pay the overseas landlord’s taxes each month), however if your tenant is a private individual, family or student, you are personally responsible for submitting quarterly tax returns and an annual income statement with tax payable every 3 months throughout the year.

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From 1^st September 2019, no Bulgarian bank account can exist, be opened, remain open or continue to be operated without being linked to the account holder’s personal income tax wherever they are registered. In the case of UK residents this is their National Insurance number, for Irish landlords this is their PPS number. Whilst it is not known if either the Banks or the State report figures by default to agencies in the homeland of the bank account holder, it is assumed that such facilities are utilised whenever the authorities call upon them.

Brexit has cast some doubt over the continued cooperation between British and Bulgarian authorities, however it is unlikely that Britain will reverse its commitments to matters relating to security and transparency regardless of its EU membership status.

Whilst New Estate is not regulated by the FCA or the Central Bank of Ireland and cannot provide advice on taxation in any jurisdiction, we can confirm the requirements of the Bulgarian law for foreign owners and overseas landlords.