Transactions and payments between local and foreign persons can be made freely according to Bulgarian legislation.
Direct investments made by Bulgarian residents in foreign countries, as well as given credits between local and foreign persons, need to be declared to the Bulgarian National Bank (BNB). Residents are required to give the BNB information about their receipts from and liabilities to foreign persons every quarter.

Transfers and payments to foreign countries through commercial banks are made only after declaring the reason for the transaction.

Residents are liable for tax on their worldwide income, with tax credits available for overseas taxes paid. If income is derived from a country with which a Double Taxation Treaty exists, the elimination of double taxation is effected in accordance with that treaty.

Income received from all sources during the year is taxable with some exceptions (income from the sale of private properties under certain conditions), scholarship income, income from interests and deposits in local commercial banks and branches of foreign banks.

The taxable annual income includes all cash and non-cash incomes, after deducting exempt income. For every income source (employment, trading, real estate disposals, etc) a special regime exists for determining the tax base. The taxable income is the sum of the tax bases from all income sources.

A 10% flat rate applies, except for the net income of sole proprietors which is taxed separately by way of a 15% final flat tax.

The only personal allowance granted under the Bulgarian tax regime is the annual BGN 7,920 allowance available to disabled individuals.

Taxation must be paid in advance on income from civil contracts, royalties, management fees and freelance arrangements. Tax payable in advance on employment income is determined by the nature of the employer. If the income payer is a company, it must withhold the tax and pay it by the 10th day of the month following the month in which the income was earned. If the payer is an individual, B the tax should be paid by the recipient by the 15th day of the month following the quarter in which the income was earned. Advance payments are deducted from the annual tax due which should be paid by 30 April of the following year.

Taxable incomes arising from contributions to voluntary health and life insurance policies are taxed at 7% or 10%.

Taxable income from dividends and liquidation distributions are taxed at 5%.

Inheritance tax is levied on property situated in Bulgaria or abroad that is inherited by Bulgarian citizens. It is also levied on property in Bulgaria inherited by non-residents. The rate is 0.4% – 0.8% when inherited from relatives in the lateral line or 3.3% – 6.6% where not acquired from relatives. In some cases, (e.g. gifts to spouse and relatives in the direct line) the inheritance is exempt from tax.

Gift tax is levied on property acquired as a gift, or in any other way, for no consideration. In general, the tax rates applicable for inheritance tax also apply to gift tax and the tax is payable by the transferee. In cases when the transferee in title to the property lives abroad, the tax is payable by the party transferring the property. In some cases, exemption from taxation is stipulated.