A visitor to our web site asked the following question:
I am currently self-employed in the UK and I am considering carrying on with my work from my Bulgarian home. Can you tell me if I would be liable to pay tax in Bulgaria? My clients are UK based and pay from UK bank accounts into my own UK bank account.
Here is our answer:
In case that you plan to carry on activity from Bulgaria, first of all you need to consider the provisions of the Bulgarian Personal Income Tax Act /PITA/, whereof regardless of your citizenship you could be treated as local person in Bulgaria. A local natural person shall be a person whose permanent place of residence is in Bulgaria, or who spends inside the territory of Bulgaria more than 183 days in each period of 12 consecutive months.
In compliance with art. 6 from the PITA: “Local natural persons shall be bearers of the obligation to pay taxes on income originating from sources located either within the Republic of Bulgaria or abroad.”
Furthermore despite of the fact that you will receive the income in the UK, in case that you are going to be local natural person for tax purposes in Bulgaria, in compliance with art. 97a from the Bulgarian VAT law you will have to get VAT registered because you provide services having place of performance on the territory of another country from the EU. The obligation for local natural persons to submit an application for registration under VAT shall arise not later than 7 days before the date, on which the tax for the delivery becomes demandable (advance payment or tax event), while subject to taxation shall be the tax base of the rendered service.
Last but not least you need to consider that your income from abroad will be taxable by the 10% tax rate and the deadline for submission of your personal annual tax return and paying of the personal income tax due will be 30th of April following the year when your income was acquired.