How to Legally Transfer Money from Your Bulgarian Company to Your Personal Account?
Transferring money from a company account to a personal one is a common necessity. To avoid penalties and issues with the Bulgarian tax authorities (NRA), you must use legal methods approved by national tax legislation.
What Are the Legal Ways to Transfer Money?
There are four main methods recognized by Bulgarian laws and institutions:
1. Salary – a Stable and Transparent Method
Pay yourself a salary as a manager or employee:
- Register yourself with the NRA as a manager or staff member
- Deduct applicable taxes: 10% income tax + social security contributions
- Transfer the net amount to your personal bank account
Advantage: You receive a regular income with full accounting justification.
2. Dividends – an Efficient Way to Distribute Profits
If the company has made a profit and paid corporate tax:
- Distribute dividends after paying the 10% corporate tax
- Deduct 5% dividend tax
- Transfer the remaining amount to your personal account
Example: For a BGN 10,000 dividend, you pay BGN 500 tax and receive BGN 9,500.
3. Loan from the Manager – Short-Term Financial Support
It is permitted to withdraw funds temporarily in the form of a loan:
- Sign a loan agreement between the company and yourself
- Repay the amount within the agreed timeframe to avoid tax consequences
- Use only for short-term needs
Important: A loan is not a long-term solution and may be reviewed during audits.
4. Reimbursement of Expenses – For Business Expenses Paid Personally
If you paid a business-related expense with personal funds:
- Keep all receipts and invoices
- Approve the reimbursement with your accountant
- Transfer the amount without incurring additional taxes
Example: Business trip or equipment purchased with personal money.
How to Avoid Mistakes When Transferring Company Funds?
Using illegal methods such as “hidden withdrawals” can result in:
- Fines from the NRA
- Additional tax assessments
- Potential criminal liability
Compliance with accounting and tax regulations is essential.
Need Help Managing Your Business Finances in Bulgaria?
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If you’re looking for professional support, T&G Consulting offers expert assistance on all VAT-related matters. Contact us today to receive personalized advice tailored to your needs and activities.
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