Crypto Tax Rates in Bulgaria

Bulgaria, a small country in Central Eastern Europe, is actively working to attract expats, digital nomads, and tech entrepreneurs to diversify and strengthen its local economy.

One of the main ways the Bulgarian government does this is through a competitive 10% flat tax rate that applies equally to both individuals and businesses.

This simple and transparent tax policy makes it easier for entrepreneurs and freelancers to upgrade into formal businesses, while keeping the same low rate.

For those who spend at least 183 days per year in the country, Bulgaria offers the possibility to become a tax resident and declare worldwide income under its system, a major advantage for entrepreneurs across Europe and beyond.

Let’s explore how crypto is taxed in Bulgaria and why it has become one of the most crypto-friendly destinations in the EU.

Is Crypto Taxed in Bulgaria?

Yes, crypto is taxed in Bulgaria, and it is seen as a financial asset. As a financial asset, it is part of your investment portfolio, and therefore, you need to pay a capital gains tax of 10%.

As an individual, you pay capital gains tax when you convert your crypto or dispose of it, meaning when you realize a gain. In the case of businesses, they pay the same 10% capital gains tax.

In the case of mining or staking, it is treated as taxable income. If you operate as a business, you can reduce your taxable amount by including operational costs, such as electricity, in the case of mining.

What Are the Standard Crypto Tax Rates in Bulgaria?

The same tax rate that applies to all the capital gains in your portfolio also applies to crypto, which is 10%, and it is the same rate for businesses.

This is the government’s way of actively encouraging professionals in the tech and digital industry to move to Bulgaria. The Bulgarian tax policy is relatively simple and appealing for investors, especially those seeking predictability and low rates.

When Do I Pay Crypto Tax in Bulgaria?

You pay crypto tax in Bulgaria at the same time you pay your regular income tax. You must declare your crypto gains annually when filing your personal income tax returns, typically by April 30 of the following year.

Keep in mind that taxes are applied when profits are realized, that is, when crypto is converted into fiat or exchanged for another asset, not when it is simply held.

In other words, you don’t pay taxes for holding crypto; you only pay taxes when you dispose of it, as mentioned before.

How Much Tax Do You Pay on Crypto in Bulgaria?

You pay taxes based on your capital gains, which are calculated as your profit: the sale price minus the acquisition cost.

For example, if you bought BTC for €10,000 and sold it for €15,000, you pay a 10% tax on the €5,000 gain.

Remember that mining and staking rewards are also subject to tax, sometimes as income rather than capital gains. Always keep a record of all your transactions, including timestamps, so you can calculate your capital gains tax correctly and meet your tax obligations accurately.

Is There Any Tax on Stolen or Lost Crypto in Bulgaria?

You cannot reduce your taxes by declaring a loss in the case of a scam or fraud. Unfortunately, there is no special exemption for stolen or lost crypto.

However, in rare cases with strong media attention and sufficient evidence, you might be able to offset losses against future gains, but again, this is not something explicitly stated by the Bulgarian authorities.

Are There Any Exemptions for Crypto Tax in Bulgaria?

There are no crypto-specific exceptions when it comes to taxes. However, you can apply the same general exceptions that exist for capital gains tax and income tax.

For example:

-In the case of income tax, there is a tax-free threshold per year.

-In the case of capital gains, you don’t pay taxes if you are holding your crypto or if you move it between your own wallets, since you remain the same owner.

However, an important difference in Bulgaria is that long-term holding doesn’t provide any benefit for investors. You won’t reduce your taxes simply by holding your crypto longer. This differs from countries like the United Kingdom or the United States, where long-term holding can result in a lower tax rate.

How Do You Report Crypto Tax in Bulgaria?

You report your crypto tax through the National Revenue Agency (NRA), declaring capital gains in your annual tax declaration.

As always, keep records of your exchange statements, wallet transactions, and proofs of purchase, including dates, amounts, and prices in Bulgarian lev (BGN), to make sure your tax declaration is accurate and verifiable.

Final Thoughts

With its 10% flat tax rate, low cost of living, and fast internet infrastructure, Bulgaria stands out as one of the most crypto-friendly countries in the EU. Its simple and predictable system appeals to digital nomads, tech founders, and investors looking for transparency and fairness.

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