Guides a Bulgarian resident freelancer or sole trader (ET) through the full annual income tax engagement: classifying income and contributions, computing the normative expense deduction (25%/40%) or the CIT-Act profit base, reconciling quarterly advance PIT payments, and filing the Art. 50 annual return (Form 2001) with the NRA by the 30 April deadline — including the 5% early-filing discount available for electronic filing by 31 March.
Establish the client's taxpayer category (individual/freelancer at 10% vs sole trader ET at 15%), confirm Bulgarian tax residency (permanent address or more than 183 days in the calendar year), and identify any mixed-income scenarios such as simultaneous employment alongside freelance activity. These facts determine the applicable rate, normative deduction percentage, and whether a Form 2001 filing is mandatory.
Collect and classify all income for the tax year from bank statements (UniCredit Bulbank, DSK, UBB, Postbank, Revolut/Wise) and invoices. Identify gross freelance receipts (ХОНОРАР, ПРЕВОД, platform payouts such as Stripe, Upwork, PayPal), separate employment income already taxed via monthly withholding, exclude own-account internal transfers (ВЪТРЕШЕН ПРЕВОД), and flag dividends already subject to the 5% final withholding tax. For EUR receipts, convert at 1 EUR = 1.95583 BGN for periods through 31 December 2025; use EUR face value from 1 January 2026.
Compute the mandatory social security and health insurance contributions for self-insured persons. Establish the declared monthly insurable income (must be within the statutory band: BGN 1,077–4,130 for April–December 2025, or EUR 550.66–2,111.64 from 2026), apply the mandatory contribution rates (pension 14.8% + 2nd-pillar UPF 5.0% + health NZOK 8.0% = 27.8% minimum, or 31.3% with optional General Sickness & Maternity fund), and determine the annual reconciliation against actual income. Contributions actually paid are deductible from the PIT base under ZDDFL and the Social Insurance Code (KSO).
Compute the annual taxable base. For individual freelancers: apply the statutory normative expense deduction (25% general, 40% liberal professions/royalties) to gross income, subtract deductible social and health contributions actually paid, apply any child tax relief (BGN 6,000 / EUR 3,068 per child; up to BGN 18,000 for three or more), then apply the flat 10% PIT rate. For sole traders (ET): compute taxable profit under the CIT-Act base (actual income minus documented expenses plus tax adjustments) and apply 15%. Credit any quarterly advance PIT payments made during Q1–Q3 (no Q4 advance required for individuals).
Prepare the Annual Personal Income Tax Return (Годишна данъчна декларация, GDD) under Art. 50 of ZDDFL using Form 2001, completing the applicable annexes: Annex 3 for freelance/self-employment income, Annex 2 for ET income, and Annex 8 for foreign income if applicable. Assess eligibility for the 5% early-filing discount (capped at BGN 500 / EUR 255.65) available when the return is filed electronically and the full tax balance is paid by 31 March with no outstanding public liabilities. Deadline for all filers: 30 April of the following year; ET filers: 1 March–30 June.
Submit Form 2001 electronically via the NRA e-services portal, confirm receipt and the NRA-assigned reference number, and execute the tax payment (or request the refund) by the applicable deadline. Flag the one-year window for a penalty-free corrective return (until 30 September of the following year) if errors are discovered post-filing. Note the late-filing penalty (up to BGN 500 / EUR 255.65, doubled on repeat) and the late-payment interest rate (BNB base rate + 10 pp in 2025; ECB main refinancing rate + 8 pp from 1 January 2026).
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Bulgaria Income Tax (Данък върху доходите на физическите лица) -- Self-Employed
Use this skill whenever asked about Bulgaria personal income tax (данък върху доходите на
Bulgaria Tax Optimization
Use this skill whenever asked about reducing tax in Bulgaria, tax planning, or legal strat