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Bulgaria Freelance Taxes: Detailed Breakdown

dmitryfrank.com

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Re: Bulgaria Freelance Taxes: Detailed Breakdown

#61

Post by dimonomid »

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…

Could you elaborate? Of course I do have a local accountant, and if what you're saying is true, I am disappointed she didn't mention that; they just said, paying salary will end up being more expensive than dividends.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#62

Post by Oron7 »

SantiagoElf wrote: post #48

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!

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#63

Post by nkmnz »

> 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.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#64

Post by ddorian43 »

akmarinov wrote: post #60
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.

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

Can you be more explicit ? Minimum car insurance is mandatory, and you can pay for full insurance if you want.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#65

Post by dimonomid »

jstx1 wrote: post #24

> 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…

> 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.

No no, the social security min base 710 BGN is only relevant if you declared that you're actively working, but in fact getting no income. If one decides to e.g. take a break for a year, they can declare that they don't actively working anymore, and thus they'll be paying a lot less (I don't know exact amounts though)

And also, unemployment is a whole lot different story, but I don't know details about that.

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

As already mentioned by phoronixrly, yes it's because of the VAT registration. Having that registration, accountants have to do some paperwork every month.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#66

Post by romaniatax »

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…

> Do not be under the illusion that Bulgaria is just like $western_european_country but with less taxes and cheaper housing. Everything comes at a price. You will not find many things you take for granted in your home country here.

Technically speaking you are right: there is almost no police, no public health care (quality is too low to even step foot in a public hospital), school are pretty low quality, and people tend to be rude. But for a temporary gig (I am in Romania due to taxes for a few years) it can be beneficial. It's not as bad as say India or Pakistan as east eu countries are orders of magnitude more developed, and if you can put up with the nuisance for a while then you can return to your western country and maybe afford a deposit to stop living with flatmates as an adult. Worth while in my case.

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#67

Post by dimonomid »

nkmnz wrote: 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.

Oh wow, I actually didn't know that about Deutsche Mark!

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#68

Post by romaniatax »

phoronixrly wrote: post #41
ostenning wrote: post #40

Earlier quoted context omitted.

On the plus side Bulgarian food is excellent

Ah yes, sorry for the negativity above. Just wanted to point out that moving here should be a well thought out decision and preferably not based on a single not-entirely-correct HN post. There are trade-offs and there's more to a country and to life than low taxes...

There is plenty of negativity surrounding east europe on HN so there is no need to remind people they won't get the same quality of life as in western europe, but it's not that bad. At least that's what i keep telling myself and counting invoices. I saved enough to buy a deeecent flat in London (>600kEUR).

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#69

Post by bogdanu »

SantiagoElf wrote: post #48

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.

> Nothing at the moment beats the taxes, location and potential of Bulgaria in Eastern Europe :)

I wouldn't be so sure, haha. I live in RO and this year I've paid less than 5% in taxes (half of them being pension fund and 25% health insurance).

Re: Bulgaria Freelance Taxes: Detailed Breakdown

#70

Post by jwr »

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).

If you are self-employed and running a SaaS, the rate is actually 8.5% of revenue (PKWiU 58.29.40). Source: I am self-employed and running a SaaS. With my cost structure my (calculated for comparison) effective income tax rate is 13.5%, and that includes all social security and health insurance payments. It's unbelievably good, socially unjust, and I don't think it will last, but here we are.

Poland also happens to be a really nice place to live, although if you don't speak Polish (or don't have a friend/spouse who does), dealing with government institutions can be a pain.

Oh, we also have a terrible chaotic populist government and a bunch of other problems, but that seems to be the case everywhere these days, so.

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