Bulgaria is one of those countries that have recently introduced regulation but have already established themselves as a hub in the EU. For example, this is where the Nexo exchange is licensed.
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Bulgaria is one of those countries that have recently introduced regulation but have already established themselves as a hub in the EU. For example, this is where the Nexo exchange is licensed.
Bulgaria has a minor danger security level according to our rating. Jurisdiction has 62.5 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 1.3 per 100,000 inhabitants a year. Story of firearm-related death (3) 1.51 per 100,000 inhabitants a year.
Salary under an employment contract can only be paid (4) in fiat money. The following options remain:
crypto payroll from a foreign company;
accepting payments in crypto under a civil law contract.
Crypto payments are valued (5) (converted) into Bulgarian leva at the time of receipt. They form insurance income and tax base from economic activity.
The Council of Ministers of Bulgaria adopted a Decree (6) in 2020, which contains information on creating a special register of companies - providers of crypto services to separately designate the obligation of such companies to comply with AML requirements. If you are interested in details of crypto regulation in Bulgaria, you may check the law text in English (7)
Bulgaria has two central crypto regulators: Bulgaria National Bank (BNB) and the Financial Supervision Commission (FSC)(7¹). In two interviews in 2022, the BNB Deputy Governor in charge of the banking department expressed the general unofficial opinion that cryptocurrencies are unregulated in Bulgaria in every aspect, except for anti-money laundering (AML) purposes, and will remain unregulated until general European legislation is adopted (8).
In the present Bulgarian legal framework, cryptocurrencies (Bitcoin, altcoins) are still perceived (9), audited, and declared before the NRA (National Revenue Agency) as financial assets. Their legal status developed with the Anti-money Laundering Act (AML Act) amendment in November 2019.
The 2019 amendments to the Bulgarian Prevention of Money Laundering Act 2018 (AML Act) for the first time, include (10) cryptocurrency exchanges and wallet providers to ensure Bulgarian law is in line with the requirements of the Fourth (*1) and Fifth (*2) AML Directives.
According to this, a virtual currency is the digital representation of a value that is not issued (11) or guaranteed by a central bank or a public body, is not necessarily related to a legally-established currency, and does not have the legal status of cash or money, but is accepted by natural persons or legal entities as a means of exchange and can be transferred, stored and traded electronically.
A definition for “wallet provider” is also introduced (12). This is any natural or legal person or other legal form that provides private cryptographic critical protection services on behalf of its clients for the possession, storage, and transfer of virtual currencies.
Cryptocurrency exchanges and wallet providers must register with the National Revenue Agency (*4) for AML and anti-terrorism financing purposes.
Tax name | Index |
PIT tax Min | 10 |
PIT tax Max | 10 |
Corporate tax (CIT) | 10 |
Min Individual CGT (for crypto) | 10 |
Max Individual CGT (for crypto) | 15 |
Wealth tax Min | 0 |
Wealth tax Max | 0 |
In 2014, the Bulgarian National Revenue Agency stated (13) that any profit a person who is a tax resident of Bulgaria might gain from trading with Bitcoin and any kind of cryptocurrency is subject to an income tax of 10%.
A flat tax rate of 10% applies to all personal income, with some exceptions in obedience to PWC (14).
Corporate income is generally subject to corporate income tax (CIT) at a flat rate of 10% per PWC (15).
Capital gains are subject to the average PIT rate according to PWC (16), but there is a special rate for crypto - 15%
1)Crime Index by Country 2023 Mid-Year
2)List of countries by intentional homicide rate
3)List of countries by firearm-related death rate
4)Cryptocurrency regulation in Bulgaria. LinkedIn
5)Наръчник за крипто данъци на Tax Monkey. Tax Monkey's Crypto Tax Guide. Article
6)Биткойн регулация: Последни промени в закона. Bitcoin Regulation: Recent Changes in the Law. Article
7)Measures Against Money Laundering Act (Law on the Measures Against Money Laundering ). PDF file
7¹)The Chair of the FSC - Boyko Atanasov opened the Investor Finance Forum 2023
8) Providing international legal business solutions. GLI
9)Do You Need a License For Your Crypto Project In Bulgaria? Article
10, 11 and 12)Cryptocurrency and Wallet Providers: Bulgarian regulation. Article
13)How are cryptocurrencies regulated in Bulgaria? Article
14)Individual - Taxes on personal income. PWC
15)Corporate - Taxes on corporate income. PWC
16)Overview. PWC