Cryptocurrencies are no longer a niche – nearly 13% of Bulgarians have invested in or traded with them (Eurobarometer data, 2023). Besides opportunities for profit and risk of loss, crypto also brings tax obligations. Here’s what we need to know according to the practice of lawyers and tax experts.

What is “virtual currency”?

This is a broader term than “cryptocurrency”. It includes:

  • cryptocurrencies (BTC, ETH, etc.)

  • game tokens or chips (diamonds, coins, lives in games) that can be sold or exchanged.

  • In Bulgarian legislation, “virtual currency” is defined in the Law on Measures Against Money Laundering.

Taxes on cryptocurrencies in Bulgaria

The main applicable taxes are:

  • Income tax on individuals (10%),

  • Corporate tax (15%),

  • VAT registration for turnover over 100,000 BGN,

  • Others (taxes on donations, inheritance, etc. – treated as movable property).

When do we pay 10%, and when 15%?

  • Ordinary investor (non-professional trading) → taxed at 10% on profits.

  • Formula: (sale price – purchase price) – 10% legally recognized expenses.

  • System trader, miner, staker, or person with a 'profession' → taxed at 15% on profits after deducting all expenses (fees, commissions, software, etc.).

VAT on cryptocurrencies

  • Transactions with cryptocurrencies are not subject to VAT, as they are treated as financial services.

  • But: upon reaching a turnover of 100,000 BGN within 12 months, registration for VAT may be required.

  • The exchange of cryptocurrency for cryptocurrency also counts in turnover.

Salaries and bonuses in crypto

  • Basic salary → mandatory in BGN.

  • Additional compensations or bonuses → can be in cryptocurrencies, stocks, gold, etc.

  • Crypto bonuses are taxed and valued at the market price at the time of payment.

Freelancers and management contracts

  • Freelancers and self-employed individuals receiving crypto declare it as income in kind under the Personal Income Tax Act and the Social Security Code.

  • Managers and partners can also receive compensations in crypto.

Cryptocurrencies can be recorded as:

  • capital,

  • stocks (goods),

  • short-term or long-term assets.

Tax:

  • Change in price without sale is unrealized profit → not taxed

  • Upon sale → taxed with corporate tax at 10%.

  • Dividends in crypto → taxed at 5% (exchange rate differences apply).

Declaration and deadlines

  • Period: calendar year (January 1 – December 31).

  • Submission: by April 30 of the following year.

  • The tax is paid on the difference between purchase and sale.

  • Documents: exchange statements, bank transfers, etc.

⚠️ If you do not declare your income:

Corrections can be made until September.

If the National Revenue Agency receives information and you do not submit a declaration → risk of audit.

Conclusion

Cryptocurrencies in Bulgaria are not illegal, but are subject to taxation. Most commonly:

  • 10% for regular investors,

  • 15% for systematic traders and miners.

📌 Advice: Keep your documentation and save statements to prove transactions and expenses.


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