Which Business Expenses Are Tax-Deductible in Bulgaria?
Recognized expenses reduce the company’s taxable profit. They must be directly related to the business activity.
Common Deductible Expenses:
| Category | Examples |
|---|---|
| Rent and Utilities | Office rent, electricity, internet |
| Salaries and Social Security | Gross salary, health and social contributions |
| Professional Services | Fees to accountants, lawyers, consultants |
| Marketing and Advertising | Google Ads, website, business cards, banners |
| Business Travel | Fuel, airline tickets, accommodation during business trips |
| Depreciation of Assets | Computers, machinery, company vehicles |
Optimize your expenses – know which categories you can legally deduct.
What Documents Are Required for Expense Recognition?
Without documentation, expenses cannot be recognized. Each expense must be properly documented. Mandatory documents include:
- Invoices with company details – Always request complete invoices, even for small amounts
- Bank statements – Use bank transfers for traceability
- Contracts – Required when working with freelancers or external providers
- Expense logs – Maintain an internal system for regular tracking
Tip: Every expense must have a purpose, proper documentation, and a clear connection to your business activity.
How Are Business Expenses Declared?
Expenses are recorded in the accounting system and reflected in the annual corporate tax return.
Steps for Correct Declaration:
- Enter each expense in the accounting system – Using the correct expense category
- Submit the annual tax return – By June 30 (for LTDs/SOLE traders)
- Report VAT if registered – Some expenses allow VAT credit
Be punctual with reporting deadlines – late filing = penalties.
What Are the Most Common Mistakes When Declaring Expenses?
- Personal expenses reported as business – e.g. personal lunch not related to work
- Missing invoices – Receipts without legal elements are not accepted
- Late filing – The tax office applies interest and fines
Avoid risks – document everything strictly and on time.
Why Use Professional Accounting Services?
Professional accountants ensure accuracy, compliance, and tax savings.
Benefits of working with a firm like T&G Consulting:
- Precise expense classification
- Maximum use of allowable deductions
- Full audit preparedness
- Saved time and reduced administrative burden
Contact T&G Consulting today – optimize your expenses with experts!
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❗ This content provides general information and does not constitute tax, accounting, or legal advice. Each situation is different and should be reviewed individually.