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Bulgaria Freelance Taxes: Detailed Breakdown

dmitryfrank.com

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Re: Bulgaria Freelance Taxes: Detailed Breakdown

#51

Post by ddorian43 »

sfe22 wrote: post #14
ddorian43 wrote: post #12

Earlier quoted context omitted.

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.

Do you have a source for this?

You can see here: https://www.tatime.gov.al/eng/c/4/96/107/income-tax

The thing is that remote programming is considered "export" and export has no VAT. The numbers above are literally the taxes I paid in 2021 & 2020 (I paid the 5% of profit tax on 2020). I may have missed any small thing like $14/month for electronic signature & software. Mostly less than $500/year in all other things combined.

Edit: By "taxes changed this year" on parent comment, I meant in 2021. Not in 2022.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#52

Post by romaniatax »

atxbcp wrote: post #46

The numbers in this article are wrong, especially the company vs individual chart: you'd only pay 16% tax with a company if you paid yourself in dividends. Past a certain threshold, with a company, the best option is to pay yourself a salary every month. Then your tax rate will be in the 11 - 15% range depending on your income. source: I've got a company in Bulgaria conclusion: coming to Bulgaria to pay less taxes ca…

In Romania you pay 7% tax for an LTD (dividend + corporate tax) and for up to 100k turnover you pay 90% after tax as per above.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#53

Post by romaniatax »

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).

Try Romania - lower taxes, see my previous comment, higher standard of living and there's a small but decent size italian community here.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#54

Post by fy20 »

romaniatax wrote: post #52
atxbcp wrote: post #46

The numbers in this article are wrong, especially the company vs individual chart: you'd only pay 16% tax with a company if you paid yourself in dividends. Past a certain threshold, with a company, the best option is to pay yourself a salary every month. Then your tax rate will be in the 11 - 15% range depending on your income. source: I've got a company in Bulgaria conclusion: coming to Bulgaria to pay less taxes ca…

In Romania you pay 7% tax for an LTD (dividend + corporate tax) and for up to 100k turnover you pay 90% after tax as per above.

I was working with a Ukrainian guy for a few years, and he was always complaining about taxes and how he wanted to pay less. Eventually he told us he was paying an effective tax rate of 7% :D

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#55

Post by xondono »

charlesdm wrote: post #10
jakub_jo wrote: post #8

Earlier quoted context omitted.

Do you mean you'll only make 19.2k net from 80k gross? That sounds like an awful amount of taxes. I'm from Austria and here it's ~27% for social security and income tax is ranging from 0% to 55%. From 80k gross you would make around 42k net (Calculated without any tax benefits).

He is probably adding VAT to his income tax rates, which imo is not correct.

Why not?

VAT is typically charged to customers and then compensated with the VAT you pay if you as a freelancer have expenses.

For instance in Spain I have to increase my clients invoices by 21%, but if those invoices are for software, you have almost no purchases to offset that, so I need to pay that 21% quarterly.

So to earn 50k€ in net terms, I would need to charge 25k€ extra just on income tax, plus 3.5k€ on direct taxes on freelancing (because Spain), plus 21% VAT.

It’s no wonder the south of Europe does poorly.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#56

Post by refurb »

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.

Based on my limited knowledge it seems possible. The US allows you to exclude $106k USD in foreign income if you’re not a US resident. You can also add some housing costs to bump it up.

Many countries won’t tax you if you work there and a) all your income and work is outside the country, b) you do t spend enough time there to become a tax resident (I’ve seen 180 days for some).

So if you’re willing (and able) to split your time between 3 countries, not go back to the US and get all of your income from outside those 4 countries, you could effectively pay little to no income tax and it would be legal.

But please hire a CPA.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#57

Post by romaniatax »

fy20 wrote: post #54
romaniatax wrote: post #52

Earlier quoted context omitted.

In Romania you pay 7% tax for an LTD (dividend + corporate tax) and for up to 100k turnover you pay 90% after tax as per above.

I was working with a Ukrainian guy for a few years, and he was always complaining about taxes and how he wanted to pay less. Eventually he told us he was paying an effective tax rate of 7% :D

Considering how tax money are being used in these countries, even 7% is too much. I don't mind taxes, but there's too much embezzlement so some dude in the parliament can buy lambos. An issue common to countries in the region, but less so in Poland or Romania.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#58

Post by akmarinov »

romaniatax wrote: post #53
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).

Try Romania - lower taxes, see my previous comment, higher standard of living and there's a small but decent size italian community here.

Actually go for Lithuania or Malta - even lower taxes than Romania and even higher standard of living (especially Malta)

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#59

Post by romaniatax »

akmarinov wrote: post #58
romaniatax wrote: post #53

Earlier quoted context omitted.

Try Romania - lower taxes, see my previous comment, higher standard of living and there's a small but decent size italian community here.

Actually go for Lithuania or Malta - even lower taxes than Romania and even higher standard of living (especially Malta)

While I am not so sure about Lithuania (lower GDP per capita than Bucharest, Bucharest being twice as developed as the rest of Romania, ibm, google, amazon, microsoft all having offices here with pay comparable to germany as a backup plan - could be wrong, but it sure is colder), Malta is now an option considering your comment - had no idea taxes are low in that country. Working from near a beach is the dream tbh.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#60

Post by akmarinov »

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.

The only drawback is that insurance companies don’t insure your car inside Albania for whatever reason.
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