Moving to Bulgaria: A Complete Tax Guide for US Expats

Bulgaria, renowned for its stunning mountains, Black Sea coast, and rich cultural heritage, provides a welcoming blend of nature, affordability, and culture for Americans seeking to live abroad. From the vibrant energy of Sofia and Plovdiv to the peaceful charm of coastal towns like Varna and Burgas, Bulgaria combines modern European living with a laid-back lifestyle. Its low cost of living, growing tech scene, and friendly expat communities make it an appealing destination for remote workers, retirees, and professionals alike.

For US citizens relocating to Bulgaria, daily life is more than enjoying mountain trails and seaside cafés; it also involves staying compliant with both US and Bulgarian tax rules. The IRS requires Americans abroad to file annual US tax returns, while Bulgaria’s own tax system applies based on residency and income earned within the country.

Fortunately, with the right tax strategies, you can significantly reduce or even eliminate your US tax liability. In this guide, we cover everything you need to know as a US expat moving to Bulgaria, from filing taxes to visas and essentials like healthcare.

Bulgarian Taxes

As a US expat living in Bulgaria, you may need to file a Bulgarian tax return depending on your residency status and income sources. Tax residents are taxed on their worldwide income, while non-residents are taxed only on income earned within Bulgaria.

Unlike many countries, Bulgaria does not employ a progressive system; its personal income tax rate is a flat 10%, one of the lowest in the EU. Certain types of income may have different rates, and Social Security contributions also apply, with different rates depending on whether you are employed or self-employed.

Tax Residency in Bulgaria

Bulgaria determines tax residency based on time spent in the country or on significant personal or economic ties. The standard rule is spending 183 days or more in Bulgaria during any 12-month period.

You may also be considered a Bulgarian tax resident if you have a permanent address in Bulgaria, your center of vital interests (family, economic ties, or primary social connections) is in the country, or if you are sent abroad on assignment by a Bulgarian employer.

• Residents: Must file their annual tax return by April 30 of the following year (or March 31 if filing electronically to receive a 5% discount).
• Non-residents: Must file by the same deadlines if they have income from Bulgarian sources that requires a tax return.

The National Revenue Agency (NRA) may occasionally announce administrative updates, but nationwide deadline extensions are rare. To avoid penalties, taxpayers should plan to file by April 30 unless an official extension is explicitly issued.

Bulgaria Deadlines (for 2025 income, filed in 2026)

In Bulgaria, each taxpayer is responsible for filing their own individual tax return; joint filings are not permitted. Individuals and self-employed taxpayers can submit their tax returns electronically through the National Revenue Agency (NRA) online portal or file them on paper if preferred. Deadlines depend on the taxpayer’s situation, as shown below:

Return Type	Deadline	Payment Due
Individuals (personal income tax return)	April 30, 2026	Due the same day as filing
Early online filing discount (5% discount for filing + paying electronically)	March 31, 2026	Must be paid by this date to receive the discount
Self-employed, freelancers, sole proprietors (individual annual tax return)	April 30, 2026 (also eligible for 5% discount if filed electronically by March 31)	Due the same day as filing
Legal entities / Companies (corporate income tax return for fiscal year ending Dec 31)	June 30, 2026	Due the same day as filing

Personal Income Tax Rates in Bulgaria

Bulgaria applies a flat personal income tax rate of 10% on most types of individual income. This rate applies to both residents (taxed on their worldwide income) and non-residents (taxed only on income sourced in Bulgaria).

Social Security Tax in Bulgaria

In Bulgaria, national insurance contributions encompass both Social Security and health insurance, which are distinct from the 10% income tax. Contributions are shared between employers and employees, while self-employed individuals pay the full amount themselves.

• Social Security contributions: Total 24.7% to 25.4%, with 14.12% to 14.82% paid by the employer and 10.58% paid by the employee.
• Health insurance contributions: Total 8%, with 4.8% paid by the employer and 3.2% by the employee.
• Total national insurance: Combined 32.7% to 33.4%, of which 18.92% to 19.62% is paid by the employer and 13.78% by the employee.
• Self-employed individuals: Pay the full contribution rate themselves

Capital Gains Tax

Bulgaria taxes capital gains at a flat rate of 10%, and most gains are treated as regular taxable income. However, certain exemptions apply, especially for real estate held for the required period and for assets received as gifts. Foreigners who are tax residents of Bulgaria are generally taxed the same way as Bulgarians. However, depending on tax treaty rules, some foreign tax residents may be subject to capital gains tax only in their home country, not in Bulgaria.

Corporate Tax

Bulgaria applies a flat corporate income tax rate of 10%, one of the lowest in the EU. This tax applies to Bulgarian companies and to foreign entities with a permanent establishment in the country.

There are no provincial or local corporate income taxes in Bulgaria; the 10% rate is applied nationally.

Companies must file their annual corporate tax return and pay any tax due by June 30 of the following year (for businesses with a fiscal year ending December 31).

Dividend and Interest Tax

Bulgaria generally taxes passive income at a flat 10% rate. This applies to most individuals, including foreign residents, unless a tax treaty provides a reduced rate.

Most interest income is also taxed at a rate of 10%. However, interest earned from bank accounts in the European Union is exempt from Bulgarian tax, which may offer a tax advantage for Americans living in Bulgaria. These taxes are usually withheld at the source.

Value-Added Tax (VAT)

Bulgaria applies a standard VAT rate of 20% to most goods and services, with a reduced rate of 9% applicable to specific categories, including hotel accommodations, books, and select restaurant services. Certain transactions, such as exports or specific EU-to-EU sales, may qualify for a 0% VAT rate, depending on the type of supply and the buyer’s location.

Wealth Tax

Bulgaria does not impose a wealth tax on individuals.

Inheritance and Gift Tax

Bulgaria applies inheritance and gift taxes at the municipal level, with rates varying depending on the relationship between the giver (or deceased) and the recipient.

• Spouses and direct family members (including children, parents, grandparents, and grandchildren) are exempt from inheritance and gift taxes.
• Other relatives and unrelated individuals are subject to low municipal tax rates, generally ranging from 0.4% to 0.8%, depending on the municipality and the value of the inheritance or gift.

These taxes apply to assets located in Bulgaria. Foreign assets inherited or gifted to a Bulgarian resident may be subject to tax rules in the country where the assets are located.

Property Taxes

Bulgaria charges property taxes at the municipal level, and rates vary depending on the location of the property. Annual property tax typically ranges from 0.1% to 0.45% of the property’s tax-assessed value. These taxes apply to both Bulgarian citizens and foreign property owners. Tax-assessed values are often lower than market values; annual property taxes in Bulgaria tend to be relatively modest compared to many other EU countries.

Deductions and Allowances

Bulgaria offers a limited set of personal deductions due to its flat 10% tax system, but several useful allowances are available:

• Charitable contributions: Donations to approved organizations are deductible up to certain limits, as defined by Bulgarian law.
• Social Security contributions: Mandatory Social Security contributions paid in Bulgaria or another EU/EEA country are fully deductible, provided proper documentation is provided.
• Voluntary insurance contributions: Certain voluntary pension, health, and life insurance contributions are deductible up to specified limits.
• Mortgage interest (young families): Young married couples may deduct mortgage interest on the first BGN 100,000 of a home loan if conditions are met.
• Children and disabled children: Parents may qualify for tax reductions when supporting children or children with disabilities.

Do I Need to File US Taxes from Bulgaria?

Yes, the United States is one of only two countries in the world that taxes based on citizenship rather than residency. As a US citizen or Green Card holder, you are required to file a US tax return each year, even if all of your income originates from Bulgaria.

For the 2025 tax year (filed in 2026), here are the minimum income thresholds set by the IRS that determine whether you must file a US tax return. These thresholds are adjusted annually for inflation:

Filing Status	Income Threshold
Single	$15,750
Married filing jointly	$31,500
Married filing separately	$5
Head of household	$23,625
Self-employed	$400 in net earnings

Even if your Bulgarian income is taxed locally, the IRS still requires you to report and pay taxes on your worldwide income. Fortunately, expat tax benefits such as tax treaties, credits, and exclusions can help reduce or even eliminate the risk of double taxation.

US Deadlines (for 2025 income, filed in 2026)

As a US expat in Bulgaria, you automatically receive a 2-month filing extension to file your US return. Keep in mind, though, that any taxes owed are still due by April 15th to avoid interest and penalties.

Filing	Deadline
Standard US Tax Return and Taxes Owed	April 15, 2026 – (Expats: June 15, 2026 – Filing only)
Extended US Tax Return (if Form 4868 filed by June 15, 2026)	October 15, 2026
FBAR (FinCEN 114)	October 15, 2026

Avoid Double Taxation with US Expat Tax Benefits

The United States and Bulgaria have a tax treaty designed to help prevent double taxation and clarify which country has the right to tax certain types of income. However, unlike some countries, Bulgaria does not have a totalization agreement with the US, which means there is no coordination of Social Security contributions between the two systems.

In addition, the IRS provides tax breaks that can further reduce or even eliminate your US tax bill while living in Bulgaria.

Foreign Earned Income Exclusion (FEIE)

The IRS gives Americans abroad a powerful way to lower their US tax bill through the Foreign Earned Income Exclusion (FEIE). For the 2025 tax year, you can exclude up to $130,000 of foreign earned income from US income tax, including salary, wages, or self-employment income. To be eligible, you must meet one of two residency tests:

• Bona Fide Residence Test — you are a resident of a foreign country for an entire tax year.
• Physical Presence Test — you spend at least 330 full days outside the US during any 12-month period.

Both the FEIE and the Foreign Housing Exclusion are claimed using IRS Form 2555.

Foreign Housing Exclusion (FHE)

In addition to the FEIE, you may also lower your taxable income through the Foreign Housing Exclusion. If you qualify for the FEIE and file Form 2555, you can exclude housing costs such as rent, utilities, and insurance.

For the 2025 tax year, you must have qualified housing expenses above $20,800. The IRS caps the exclusion at $39,000 under the standard limit, which means you can exclude up to $18,200 in housing costs. These amounts are adjusted annually for inflation, and higher caps may apply in high-cost cities; however, Bulgaria generally falls under the standard housing limit.

Self-employed expats claim this benefit as a deduction rather than an exclusion, though the overall effect on taxable income is the same.

Foreign Tax Credit (FTC)

The Foreign Tax Credit (FTC) allows US expats to reduce their IRS bill by applying a dollar-for-dollar credit for income taxes already paid to Bulgaria. You can use the Foreign Tax Credit for both earned income (such as wages) and passive income (such as dividends or interest). If the Foreign Earned Income Exclusion (FEIE) doesn’t cover all of your earned income, you can often apply the FTC to the remainder. The FTC is especially useful if your Bulgarian taxes are higher than your US taxes, since you can carry forward any unused credits for up to ten years or back one year. You claim the FTC by filing IRS Form 1116.

US–Bulgaria Tax Treaty

The US–Bulgaria tax treaty, signed in 1980 and effective as of December 31, 1981, is designed to prevent double taxation and determine which country has the right to tax specific types of income, including salaries, pensions, dividends, interest, and business profits. In practice, the treaty can help reduce or even eliminate taxes on certain sources of income.

However, like most US tax treaties, the Savings Clause allows the IRS to continue taxing US citizens and Green Card holders as if the treaty did not exist, limiting some of the treaty’s benefits. Still, the agreement is valuable for clarifying taxing rights and for supporting the use of Foreign Tax Credits (FTC) to offset US tax liability on income already taxed in Bulgaria.

Child Tax Credit (CTC)

For the 2025 tax year, the Child Tax Credit (CTC) allows US taxpayers to reduce their federal tax bill by up to $2,200 per qualifying child under age 17. Up to $1,700 of this amount may be refundable through the Additional Child Tax Credit (ACTC). It’s important to note that if you claim the Foreign Earned Income Exclusion (FEIE), you cannot use that excluded income to qualify for the refundable portion of the ACTC.

US Self-Employment Tax

If you are self-employed and earn $400 or more annually, you must file a US tax return no matter where you live. Self-employed Americans owe 15.3% in US self-employment tax on their net earnings, which includes 12.4% for Social Security and 2.9% for Medicare contributions.

Because the United States and Bulgaria do not have a totalization agreement, Americans living in Bulgaria may be required to contribute to both the US and Bulgarian social insurance systems. This can significantly increase the overall tax burden for self-employed expats.

While the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) can reduce or even eliminate US income tax liability, neither reduces self-employment tax.

FBAR and FATCA: Reporting Foreign Financial Accounts and Assets

As a US expat in Bulgaria, you’re not only responsible for filing your US tax return, but you may also need to report foreign financial assets if they exceed certain thresholds. These additional requirements fall under the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA), which are designed to ensure overseas assets are disclosed to the IRS.

• FBAR (FinCEN Form 114): If the total value of your foreign bank accounts combined exceeds $10,000 at any point during the year, you must file an FBAR. This form is submitted separately from your tax return.
• FATCA (IRS Form 8938): You must also report foreign assets on Form 8938 if their value exceeds $200,000 at year-end or $300,000 at any point during the year.

Thresholds are different for Americans living in the US and those filing jointly.

Investing in Bulgaria as a US Expat

When it comes to investing while living in Bulgaria, US expats need to be especially cautious with foreign mutual funds, ETFs, and other pooled investments. The IRS generally classifies these as Passive Foreign Investment Companies (PFICs), which are subject to punitive tax treatment and complex reporting requirements. Each PFIC must be reported annually on Form 8621, and income is often taxed at the highest ordinary rates, sometimes with interest charges added. This treatment can quickly erode or even wipe out any investment gains, leaving US expats with little benefit.

Because of this, it’s recommended that you stick with US-domiciled mutual funds and ETFs. These remain under familiar US tax rules and don’t trigger PFIC reporting, making compliance far more straightforward and tax-efficient on the US tax side. Of course, review local tax reporting rules as well.

Retirement Accounts (IRAs and Roth IRAs)

As a US expat in Bulgaria, you may still be able to contribute to traditional or Roth IRAs, up to $7,000 per year for 2025 (or $8,000 if you’re age 50 or older), provided you have qualifying earned income and meet the adjusted gross income limits for your filing status. These accounts offer significant tax advantages and can help you keep your retirement savings on track while living abroad.

Note: Bulgaria does not automatically recognize the tax-deferred status of US retirement accounts. This means that contributions, and in some cases, investment growth, may be taxable locally, even if they are tax-advantaged in the US.

Expats should review the US-Bulgaria tax treaty and consult a local tax advisor to understand how Bulgaria taxes retirement income and contributions.

Visas for US Citizens in Bulgaria

Americans moving to Bulgaria will need a long-stay visa or residence permit, depending on the purpose of their stay. For short trips, US citizens can enter Bulgaria visa-free for up to 90 days within a 180-day period, as Bulgaria is an EU member and follows Schengen-area entry rules.

Bulgaria offers a range of options for those who want to stay longer. These include work and study visas, family-reunification permits, and residency-by-investment opportunities under Bulgaria’s Golden Visa program.

Bulgaria also offers a newly launched digital nomad visa, allowing non-EU nationals to live in Bulgaria while working for foreign employers or clients.

Bulgaria’s Golden Visa Program

Bulgaria offers a modern residency-by-investment program that provides a streamlined path to permanent residency. After the previous citizenship-by-investment program was discontinued in 2022, Bulgaria introduced a revamped Golden Visa in 2023. Successful applicants receive permanent residency from the start, and after five years of holding this status, they may become eligible to apply for Bulgarian citizenship.

One of the program’s key advantages is its flexibility: investors do not need to live in Bulgaria or spend a minimum number of days in the country to maintain their residency. The Golden Visa also supports family reunification, allowing spouses and dependent children to obtain residency alongside the main applicant.

Investment Options

Bulgaria’s Golden Visa requires a minimum investment of €512,000 ($593,000), held for at least five years. The investment must be made through an approved fund licensed by Bulgaria’s Financial Supervision Commission. Unlike many other Golden Visa programs in the EU, Bulgaria also allows real estate investments made through approved funds to qualify toward the €512,000 requirement.

• AIF (Alternative Investment Fund) AIFs are the most commonly used option. Investors can place the full €512,000 into one or multiple approved AIFs to diversify their holdings. These funds typically focus on capital protection and steady returns.
• ETF (Exchange-Traded Fund) ETFs offer a more liquid route, allowing the €512,000 investment to be placed into one or several approved exchange-traded funds. These can generally be bought and sold more easily on the market.

Applicants must choose either the AIF route or the ETF route; investments cannot be split between the two.

Golden Visa Requirements

To apply for Bulgaria’s Golden Visa, applicants generally need:

• A valid passport
• Proof of income or financial resources
• A clean criminal background check
• Proof of the €512,000 qualifying investment
• Valid health insurance
• Birth and marriage certificates, if applicable

Processing Time and Costs

Most applications are finalized within 3 to 6 months, depending on the time required for document preparation, due diligence checks, and government review.

In addition to the required €512,000 investment, applicants should also budget for associated fees, including legal representation, document legalization or apostille, translation costs, and government filing fees. These additional expenses vary by applicant but are typically a small percentage of the investment amount.

Bulgaria’s Digital Nomad Visa

Bulgaria launched its Digital Nomad Visa in June 2025, offering remote workers, freelancers, and entrepreneurs a straightforward way to live in Bulgaria while earning income from employers or clients outside the country, allowing digital nomads to stay long-term.

Digital Nomad Visa Requirements

To qualify for Bulgaria’s Digital Nomad Visa, applicants must be non-EU/EEA citizens who earn their income from foreign sources and can support themselves while living in Bulgaria. Requirements generally include:

• A valid passport
• Proof of foreign income (employment contract, freelancer invoices, or business documents)
• Bank statements showing stable earnings that meet the minimum income threshold
• A clean criminal background check
• Proof of accommodation in Bulgaria
• Valid private health insurance that covers medical care in Bulgaria
• Standard civil documents (birth/marriage certificates), translated and legalized if required

Applicants must earn at least 50 times the Bulgarian monthly minimum wage per year, approximately €27,550 in 2025 ($32,000).

Processing Time & Costs

Applying for the Digital Nomad Visa involves two steps: obtaining a Type D long-stay visa from a Bulgarian consulate, followed by a one-year residence permit upon arrival in Bulgaria.

Processing Time:

• Type D Visa: 35–45 business days
• Residence Permit: typically a few weeks after arrival

Costs:

• Type D Visa fee: €100–€120
• Residence permit fee: €150–€200
• Additional expenses may include translations, apostille/legalization, document preparation, and private health insurance.

The residence permit is valid for one year and can be renewed annually as long as the Digital Nomad Visa requirements are continued to be met.

Healthcare in Bulgaria

Bulgaria’s healthcare system comprises both public and private providers; however, the public system faces challenges, including outdated facilities, limited funding, and under staffing, particularly outside major cities. Because of this, most US expats rely on private healthcare, where clinics offer faster service, better equipment, and more English-speaking staff at prices far lower than in the United States.

Public healthcare (NHIF):

US expats can access the public healthcare system once they receive a residence permit and begin making monthly contributions to the National Health Insurance Fund (NHIF). Public care is inexpensive and widely available, but quality varies, and wait times can be long. Dental care is minimally covered, so many expats pay out of pocket for dental treatment.

Private healthcare:

Private hospitals and clinics in cities such as Sofia, Plovdiv, and Varna offer significantly higher-quality care and shorter wait times. Many doctors speak English, and Bulgaria has become a regional hub for affordable cosmetic and dental procedures. Although private care is generally less expensive than in the US, costs can still accumulate, making comprehensive private or international health insurance strongly recommended.

Proof of private health insurance is required when applying for long-stay visas and residence permits, ensuring US expats are covered before enrolling in the public system.

Cost of Living in Bulgaria

For US expats, Bulgaria is one of the most affordable countries in the European Union. Daily expenses, such as groceries, transportation, and dining out, are relatively inexpensive, and even in major cities, the cost of living remains significantly lower than in the United States. Prices vary by location, with Sofia being the most expensive, while cities like Plovdiv, Varna, Burgas, and smaller towns offer lower costs.

Housing is generally the biggest monthly expense, yet it is still budget-friendly compared to Western Europe. A one-bedroom apartment in central Sofia typically rents for €300–€500, while similar apartments in Plovdiv or Varna range from €250–€400. Utilities, including heating, electricity, and water, average €80–€150 per month, with higher costs in winter.

Groceries and dining out are affordable. Markets and supermarket chains, such as Lidl and Kaufland, keep food costs low, and a mid-range restaurant meal typically costs €10–€15. Public transportation is reliable and inexpensive, with monthly passes in major cities costing between €20 and €30.

Typical monthly expenses for a single expat include:

• Rent (1-bedroom): €300–€500
• Utilities: €80–€150
• Internet & mobile: €15–€30
• Groceries: €150–€250
• Dining out: €100–€200
• Public transport: €20–€30
• Private health insurance: €30–€80

Most expats can expect to spend between €700 and €1,200 per month, depending on their lifestyle and the city.

Best Places to Live in Bulgaria for US Expats

While you’ll find Americans throughout Bulgaria, several cities and regions stand out for their expat amenities, affordability, and quality of life. From historic towns to Black Sea beaches, each location offers a different lifestyle—suiting remote workers, retirees, and professionals alike.

1. Sofia

Bulgaria’s capital and largest city, Sofia, blends European culture with modern infrastructure. It offers international schools, coworking spaces, private hospitals, English-speaking doctors, and reliable public transit. Most expats live in neighborhoods like Lozenets, Vitosha, and Studentski Grad. Ideal for remote workers, professionals, and families seeking convenience and urban life.

2. Plovdiv

As one of Europe’s oldest continuously inhabited cities, Plovdiv offers historic charm, Roman ruins, and a thriving arts scene. Its cost of living is lower than Sofia, and the atmosphere is more relaxed. The Kapana district is popular among creatives, entrepreneurs, and digital nomads looking for a culturally walkable city.

3. Varna

Located on the Black Sea coast, Varna is known as Bulgaria’s “summer capital.” It offers beaches, seaside promenades, modern amenities, and a growing expat community. With private hospitals, good restaurants, and laid-back coastal living, Varna appeals to US expats seeking a quieter alternative to Sofia.

4. Burgas

Another major coastal city, Burgas, is clean, calm, and highly livable. It has miles of beaches, parks, and easy access to nearby seaside towns like Sozopol and Nessebar. Burgas attracts expats looking for affordable coastal living with a relaxed pace and warm summers.

5. Veliko Tarnovo

Known for its medieval fortress and dramatic hills, Veliko Tarnovo is a favorite among expats seeking history, scenery, and a slower lifestyle. It’s particularly popular with retirees and creatives due to its affordability and strong sense of community.

6. Bansko

Bansko, Bulgaria’s top ski town, has become a digital nomad hotspot with coworking hubs, mountain views, and year-round outdoor activities. Winter sports enthusiasts, remote workers, and nature lovers often choose Bansko for its expat-friendly environment and low living costs.

Simplify Your US Expat Tax Filing with MyExpatTaxes

We know expat taxes can feel overwhelming, especially when balancing two tax systems at the same time. Whether you’re working in Sofia, running a business in Plovdiv, reuniting with family, or settling into a new life on the Black Sea coast, staying compliant doesn’t have to be stressful.

With MyExpatTaxes, you can file your US tax return confidently, take advantage of expat tax benefits, avoid overpaying, and focus on building your new life in Bulgaria.

Start filing with MyExpatTaxes today, and make your move to Bulgaria worry-free.

Frequently Asked Questions