Foreigner renting out property in Bulgaria

Foreigner renting out property in Bulgaria

Question:
Hello!
I am from Ukraine. I want to engage in real estate management (renting out). What taxes do foreigners, property owners, pay? And what taxes do I have to pay as an intermediary?
Thanks in advance!

Answer:
Hello,
You can operate in two ways – as a freelancer or with a company/LLC/.

The steps you need to take to work as a freelancer are as follows:

1. Categorization of the apartment - this happens after submitting an application to the municipality in which the property is located. You also attach a copy of the lease agreement to the application.
2. Registration for a patent - again after submitting an application to the municipality in which the property is located. You also attach a copy of the notarial deed to the application.
3. Registration in the Bulstat register - this happens after submitting an application to the Bulstat Register at the Registry Agency. A declaration of authenticity is also filled out in the form and a copy of the rental agreement is attached again. There is also a state fee of 15 BGN.
4. VAT registration on the basis of Art. 97a of the VAT Act - this registration is mandatory if you receive services from companies outside Bulgaria (for example, AirBnb and Booking).
5. Registration in the online platform - ESTI (unified tourist information system)
6. After you have finished with this, you will be able to start your activity, for which you must submit a declaration "okd 5" to the NRA, informing them of the date you start your activity, as well as your insurance.
Regarding the insurance itself - for the time you are working, you will have to self-insure yourself on an amount of your choice, but not lower than the minimum insurance income (1077 BGN or 300 BGN insurance contributions) and not higher than the maximum insurance income (4130 BGN or 1150 BGN insurance contributions). If at the end of the year your average monthly income from this activity is higher than the amount on which you were insured, you will have to pay insurance contributions on the difference in the amount of 27.8%. Your total insurance income cannot exceed the maximum insurance income - 48420 BGN /for 2025/. If during this time you are insured under an employment contract, this must be taken into account when recalculating the insurance contributions at the end of the year.
In addition to the above commitments, you will also have the following periodic obligations:
1. Submitting a VAT return - monthly by the 14th of the following month. Such a return is also submitted in the months in which you have no activity.
2. Submitting a form 1 declaration for insurance - monthly by the 25th of the following month. This declaration is submitted only for the months in which there is declared activity and corresponding insurance.
3. Submitting an annual tax return - once a year by 30.04 of the following year.
4. Submitting a form 6 declaration - once a year by 30.04 of the following year.
5. Submitting information to the online platform ESTI regarding your overnight stays.

Second option: registration of an EOOD.

After the company is registered in the commercial register, you can start your activity, even renting out other people's properties. Some of the steps when working as an individual/freelancer/ also apply to working through a company, namely:
1. Categorization of the apartment - after submitting an application to the municipality in which the property is located. Attach a copy of the rental agreement to the application.
4. VAT registration on the basis of Art. 97a of the VAT Act - this registration is mandatory if you receive services from companies outside Bulgaria (for example, AirBnb and Booking).
5. Registration in the online platform - ESTI (unified system for tourist information)

When starting the activity, you must submit to the NRA an OKD 5 declaration - a form with which you notify the date on which you start your activity and your insurance. Insurance is the same as in the case of a freelancer, with the difference that at the end of the year there is no equalization according to income. You must take into account if you have other income. For each month during the company's activity, Form 1 must also be submitted to the NRA. At the end of the year, revenues minus expenses form a profit, which is taxed at 10%. To receive the company's profit as an individual, you pay a 5% dividend tax.

We hope that we have been useful to you!
Greetings!