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Bulgaria Freelance Taxes: Detailed Breakdown

dmitryfrank.com

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Re: Bulgaria Freelance Taxes: Detailed Breakdown

#21

Post by gcbirzan »

dimonomid wrote: post #5
tchalla wrote: post #4

Earlier quoted context omitted.

The question is - Do you have to? You may have not paid it but that doesn’t tell if one has to.

This was confirmed by at least two reputable accountants, so yeah, I'm 100% sure I didn't have to pay 8% health insurance while being a long term resident (and not an EU citizen). Actually, I _did_ pay some health insurance, but it had nothing to do with the business and it wasn't 8% or anything like that. It's like the same kind of health insurance that even tourists have to get.

Ah, I see where the confusion comes from. I assumed you meant you don't have to pay any. Though, I'm curious, how much is it? I went to check in the "Ordinance on the General Terms and Conditions, the Minimum Insurance Amount, the Minimum Insurance Premium and the Procedure for the conclusion of the mandatory medical insurance of foreigners who reside shortly or prolonged in the Republic of Bulgaria or transit through the country" (such a title), it says the price of the premium is determined according to article 65 of the insurance code, but that one is referring to something else. Oh, well.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#22

Post by lukasm »

cromka wrote: post #16
jakozaur wrote: post #6

Similar as in Poland: 1. Long-term remote contracting as software engineers is legal. No need to worry about being forced into being employee. 2. Regressive taxation at very low level (e.g. recently in Poland you can opt-in for 12.5% taxation of revenue).

Just moved back to Poland after 6 years in US, looking to work remotely for US-based contractors. Dare to elaborate, please? First time I hear of this.

If you are a "creative" person (software engineer, designer etc.) you can just pay a flat rate for all taxes and insurance. For example: 100k revenue will equal to 12k in income tax + medical insurance + social security. In total, it would be less than 20k (17-20% depending on a few factors).

Another option would be to use IP BOX relief. If you are producing IP your tax will be 5%. If you fly to a customer, have a company car, you need a lot of equipment, your tax can be even lower.

https://www.gov.pl/web/poland-businessharbour-en/tax-reliefs...

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#23

Post by michalmj »

cromka wrote: post #16
jakozaur wrote: post #6

Similar as in Poland: 1. Long-term remote contracting as software engineers is legal. No need to worry about being forced into being employee. 2. Regressive taxation at very low level (e.g. recently in Poland you can opt-in for 12.5% taxation of revenue).

Just moved back to Poland after 6 years in US, looking to work remotely for US-based contractors. Dare to elaborate, please? First time I hear of this.

Google "ryczałt dla programisty". If you play your cards right in Poland you can get legally around ~10% tax total (this includes national insurance ~5% and IP Box 5% for programmers).

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#24

Post by jstx1 »

> And if your income is smaller than 710 BGN, even if it's straight zero, then you'll have to pay social security as if your income was 710 BGN

Is this really how it works? They're taxing people with 0 income? I guess it isn't relevant to the target audience of the article but it must suck for the unemployed.

> Accountant fees: about 150 - 200 BGN per month independently of the income.

This seems really high. Why do you need an accountant every month instead of once a year?

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#25

Post by gcbirzan »

phoronixrly wrote: post #9

Keep in mind that Bulgaria has just elected a reformist parliament for the first time in more than 10 years. Maybe wait a year or two before buying a one-way ticket as the government may raise taxes, especially on the unaffected by the anti-COVID measures. Or they could lower taxes even more if they manage to get on top of the rampant tax evasion and grey economy (one can hope). Also there are other small things to c…

If by those unaffected by COVID you mean self-employed people, not sure that's really the case, as taxes for people that are employed by a Bulgarian company are not THAT much higher. Using the 10k BGN example, your net salary is 8627.94, and the employer (of course, excluding accounting and all that stuff) pays 10567.60.

I don't remember exactly the numbers for self employed, but if his are correct (and they seem a bit off, maybe because of the missing health insurance), the difference is basically 5-600 BGN, so 5-6pp.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#26

Post by tomcooks »

otar wrote: post #11

I am a big believer in Flag Theory and stuff… I currently pay about 2,5% on my gross income ($100k+) as a software developer, which is more than most of EU/US developers are left after tax… In a short, if you’re willing to make some trade-offs and optimize your taxes, you’ll be legally retaining your hard earned $$$. Among the trade-offs, tax residency is the most important. Things are a bit complicated for US citize…

I'm all ears, if you want to explain how this is possible without breaking multiple laws and cross-country agreements

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#27

Post by cromka »

lukasm wrote: post #22
cromka wrote: post #16

Earlier quoted context omitted.

Just moved back to Poland after 6 years in US, looking to work remotely for US-based contractors. Dare to elaborate, please? First time I hear of this.

If you are a "creative" person (software engineer, designer etc.) you can just pay a flat rate for all taxes and insurance. For example: 100k revenue will equal to 12k in income tax + medical insurance + social security. In total, it would be less than 20k (17-20% depending on a few factors). Another option would be to use IP BOX relief. If you are producing IP your tax will be 5%. If you fly to a customer, have a co…

Thanks, much appreciated!

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#28

Post by cromka »

michalmj wrote: post #23
cromka wrote: post #16

Earlier quoted context omitted.

Just moved back to Poland after 6 years in US, looking to work remotely for US-based contractors. Dare to elaborate, please? First time I hear of this.

Google "ryczałt dla programisty". If you play your cards right in Poland you can get legally around ~10% tax total (this includes national insurance ~5% and IP Box 5% for programmers).

Thanks, much appreciated!

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#29

Post by tomcooks »

ddorian43 wrote: post #12
firechickenbird wrote: post #7

Considering moving in Bulgaria after this, thanks! My Freelance taxes/social sec/retirement tax in Italy is on average 76% on a total of 80k eur average gross annual income (98th income percentile).

Come to Albania, should be easier for italians. Assuming you work remote, no taxes until ~$120K, then it's 15% of profit. On your wage, you'll pay $50/month economist + $80/month health/pension + $80/month municipal taxes. These taxes changed this year. Previous year it was 5% if you pass $50K and 15% if you surpass ~$120K.

Albania also has great sea, amazing food and welcoming people

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#30

Post by PaywallBuster »

charlesdm wrote: post #15
otar wrote: post #11

I am a big believer in Flag Theory and stuff… I currently pay about 2,5% on my gross income ($100k+) as a software developer, which is more than most of EU/US developers are left after tax… In a short, if you’re willing to make some trade-offs and optimize your taxes, you’ll be legally retaining your hard earned $$$. Among the trade-offs, tax residency is the most important. Things are a bit complicated for US citize…

Unless you're actually living in a tax haven or a third world country with no CFC laws, you're almost certainly breaking the law with this. The conversations I have had with people who have found the gold wheel is mind boggling, and they almost all get in trouble at some point.

US citizens can move to Puerto Rico and pay 5% tax, very legally
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