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Bulgaria Freelance Taxes: Detailed Breakdown

dmitryfrank.com

81–90 of 133 posts

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#81

Earlier quoted context omitted.

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.

> While I am not so sure about Lithuania (lower GDP per capita than Bucharest ...) Why are we comparing a country with a city in GDP per capita terms? And is this meant to imply that standard of living is higher in Bucharest than, say, Vilnius? I would assume two cities with similar GDP per capita (as Vilnius and Bucharest) can have wildly different standard of living depending on many other factors.

I can only speak about Bucharest as that's the area I know best. From what I see it has a slightly higher GDP per capita than Lithuania, and if you factor in the metro area, Bucharest has the same population as the country.

"And is this meant to imply that standard of living is higher in Bucharest than, say, Vilnius?"

Statistically, it is, albeit by a small margin. There is also Cluj Napoca (Romania's second or third largest city, similar size to Vilnius), also at a higher standard of living than both, but I don't know much about that city. Outside these two, Romania is a wasteland.

Edit: Interesting:

Vilnius is the major economic centre of Lithuania. The GDP per capita (nominal) in Vilnius county was €25,400 (~US$30,000)[285] in 2019, making it the wealthiest region in Lithuania and the second-wealthiest region in the Baltic states.

Almost one third of national taxes is paid by Bucharest's citizens and companies. In 2009, at purchasing power parity, Bucharest had a per-capita GDP of €26,100, or 111% that of the European Union average and more than twice the Romanian average.

So likely Bucharest's GDP per capita is higher by a wider margin.

Edit 2: The region Bucharest-Ilfov is the most developed region in Romania, with a GDP per capita of 139% of the European average. Bucharest thus surpasses other European capitals such as Athens, where the GDP per capita reaches 92% of the EU average, Madrid (125%), Berlin (118%), or Budapest (102%).

https://rumaenien.um.dk/en/the-trade-council/about-romania

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#82
post #79

Earlier quoted context omitted.

Hold on I am also in Romania and pay 7%. Are you classed as PFA Consultant? If so then there's no programming "allowed" else it's the wrong category. Which tax code are you using so I can switch?

Yup, I'm a PFA with a fixed taxation rate (norma de venit) using 6202. Keep in mind that taxation rates differ by a lot for each county.

6202 is strictly for consulting services (ie. no programming). was advised by anaf and my accountant not to use it as it would be, basically, fraud (since i also write code not just "advice" - which is what the romanian tax system defines as consulting). use it at your own risk as they can back-tax if they catch you.

either way thanks for this!

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#83
post #73
post #63

> Bulgarian national currency is BGN, and as of now, its value is pegged to EUR with the fixed ratio of 1.95583. So, 1 EUR is 1.95583 BGN, and it doesn't change over time, at least not yet. 1.95583 is EXACTLY the exchange rate between Euro and Deutsche Mark that I still remember from the switch in 2002. Indeed, after some research I've just learned that the Bulgarian Lev has been pegged to the DM since 1997.

Not all that unusual really. Before the EURO replaced the DM, many things in Croatia, such as cars and real estate were denominated in DM. This was due to rampant inflation (especially in the 80s and 90s) causing people to lose faith in the local currency.

The big difference is that Bulgaria has a currency board, which was agreed to with the International Monetary Fund and the World Bank. This was done to stabilize the exchange rate and the economy in 1997. The exchange rate has been fixed for the last 24 years.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#84
post #76

Earlier quoted context omitted.

I was under impression it was 1-3% profit tax + 5% dividend with an upper limit of 1 million euros? Or has that changed (again)? Also, 850 pcm seems kind of high, at least compared to what I saw on olx.ro.

> I was under impression it was 1-3% profit tax + 5% dividend with an upper limit of 1 million euros? Or has that changed (again)? Correct, but on average mine works out around 7% and I have almost 0 company expenses as I don't partake in dodgy wizardry. > at least compared to what I saw on olx.ro. one does _not_ rent property on OLX and there are only some areas that are desirable (i.e.: have to look and feel of cen…

> one does _not_ rent property on OLX and there are only some areas that are desirable (i.e.: have to look and feel of central or western europe).

Interesting. Why not? The apartments look pretty legit.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#85
post #62

Bulgarian here. :) We like to be hush-hush about the benefits of living in Bulgaria. Nothing at the moment beats the taxes, location and potential of Bulgaria in Eastern Europe :) You can ask me any questions related to living cost, places, customs, etc or anything related to Bulgaria.

In which cities do you think there is the most work in the IT sector? Also, how do you rent a place? With agencies, do they want a lot of documents and stuff? Thanks!

Sofia, without a doubt - the capital.

Not much documents are needed in order to start working with an agency due to the fact that the market is starved for IT specialists.

It's not uncommon a person with 0 experience to start at 2K BGN which is around 1K eur.

Ranges are ( these are NET salaries after tax): - Super Jr -> 1k - 1.5k EUR

- Juniour -> 1.5k - 2.5k EUR

- Mid-Level -> 2.5k - 3.5k EUR

- Sr. Dev -> 3.5k -> ~4-5k EUR without being a people manager

It's full of collocation workspaces like:

https://betahaus.bg/en/

http://soho.bg/index-en.php

https://cosmos.camp/

http://cosharehive.com/

https://trevorworkspaces.com/

etc. etc.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#86
post #84

Earlier quoted context omitted.

> I was under impression it was 1-3% profit tax + 5% dividend with an upper limit of 1 million euros? Or has that changed (again)? Correct, but on average mine works out around 7% and I have almost 0 company expenses as I don't partake in dodgy wizardry. > at least compared to what I saw on olx.ro. one does _not_ rent property on OLX and there are only some areas that are desirable (i.e.: have to look and feel of cen…

> one does _not_ rent property on OLX and there are only some areas that are desirable (i.e.: have to look and feel of central or western europe). Interesting. Why not? The apartments look pretty legit.

If you like them then there is no issue, but usually i find them of lower quality. Not saying there aren't decent apartments, but anything <650/700 is not great IMO. Also the areas I mentioned look and feel like a different country hence willing to pay more. No trying to be sure or demeaning sorry if i come across that way.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#87
Getting an accountant is really one of the best decisions you can make especially if you make above average income or income from multiple streams no matter the place you live in.

I've done my taxes for individual business for 8 years myself, but when I've moved abroad I needed help with setting up business as I was unfamiliar with local laws and regulations. I hired a great accountant who helped me with setting up both individual business and limited company. I'm getting schooled on how I should do things to take advantage of different opportunities and tax breaks - things I never though or did before.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#88

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).

> 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).

If you have a profit of 80k and your net income is 19k, you're doing something very wrong. This is not an accurate representation of Italian taxes and social security. A more reasonable net income for that gross is 40k; but you have to take into consideration that with around 24k of the other 40k you are paying a pension (not a very generous one, but still).

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#89
post #84

Earlier quoted context omitted.

> one does _not_ rent property on OLX and there are only some areas that are desirable (i.e.: have to look and feel of central or western europe). Interesting. Why not? The apartments look pretty legit.

If you like them then there is no issue, but usually i find them of lower quality. Not saying there aren't decent apartments, but anything <650/700 is not great IMO. Also the areas I mentioned look and feel like a different country hence willing to pay more. No trying to be sure or demeaning sorry if i come across that way.

No, it's fine. I assumed that you meant that olx.ro was a scam or something. Only after I visited immobiliare.ro did I realize the difference in quality between their offerings.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#90
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.

120k EUR per year is less than 5% of people in Bucharest and probably less than 1% country wide.
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