Tax residency in Bulgaria for persons under temporary protection

Given the extended stay of Ukrainian citizens in Bulgaria on the basis of temporary protection status (временна закрила), the question of determining their tax status is becoming increasingly relevant. Does tax residency arise automatically, which income must be declared, how should relations with the National Revenue Agency (NAP) be properly settled and how can double taxation with the State Tax Service of Ukraine be prevented?

How is the tax residency of persons under temporary protection determined?

Temporary protection status is a migration (humanitarian) institution and does not in itself automatically determine an individual’s tax status. In determining tax residency, the National Revenue Agency of Bulgaria (NAP) applies the general criteria set out in Art. 4 of the Personal Income Tax Act (ЗДДФЛ).

An individual is recognised as a Bulgarian tax resident (местно данъчно лице) if they meet at least one of the following criteria:

• The 183-day rule: Physical presence on Bulgarian territory for more than 183 days within any 12-month period. In this case the person becomes a tax resident in the calendar year in which that threshold is exceeded (exception: days of stay solely for the purpose of study or medical treatment are not counted).
• Centre of vital interests: The centre of personal and economic interests is located in Bulgaria. NAP assesses this criterion as a whole: the presence of family (spouse, minor children), owned or rented housing, the main place of work or the conduct of business, children’s education at local schools.
• Permanent address: The existence of a permanent address in Bulgaria, provided that the centre of vital interests is demonstrably not located in another country.

The official position of NAP: Citizens with temporary protection status fall under the general rules of Art. 4 of the ЗДДФЛ. If a person resides in Bulgaria for more than 183 days or has moved their centre of vital interests here, they acquire the status of a Bulgarian tax resident with all the tax obligations that follow.

Which taxes must be paid and on which income?

The key consequence of acquiring Bulgarian tax resident status is the transition to the principle of unlimited tax liability (Worldwide Income). This means that a tax resident is obliged to declare and pay tax in Bulgaria on ALL income received both within the country and from any foreign sources.

Declaring foreign assets (ГДД under Art. 50 of the ЗДДФЛ)

Bulgarian tax residents are obliged to file an Annual Tax Return (ГДД under Art. 50 of the ЗДДФЛ) each year by 30 April of the year following the reporting year. This return must state not only foreign income but also any foreign assets held:

• Open accounts with foreign banks;
• Shares, holdings in foreign companies and investment assets;
• Immovable property outside Bulgaria;
• Monetary loans granted or received.

Do you need to obtain the Certificate «За местно данъчно лице» from the National Revenue Agency (NAP)?

Yes, obtaining this document is an absolute necessity for settling tax matters with Ukraine. The Удостоверение за местно данъчно лице (Certificate of Tax Residence) is an official document issued by NAP confirming the fact of Bulgarian tax residency in a particular tax year.

Procedure for obtaining and using the certificate:

• Filing the application with NAP: An Искане за издаване на удостоверение за местно лице (Form No. ОКд-273) is filed with the territorial directorate of NAP at the place of residence. The application can be submitted in person, by post or online through the NAP portal (using a ПИК НАП or a qualified electronic signature).
• Providing evidence: Documents confirming actual stay of >183 days or the centre of vital interests are attached to the application (lease agreement, utility receipts, temporary protection registration, statements from a local bank).
• Timeframe and cost: The document is issued within 7–14 days; no state fee is charged for its issuance.
• Legalisation for Ukraine: The original certificate must be stamped with an Apostille at the Bulgarian Ministry of Foreign Affairs and accompanied by a notarised translation into Ukrainian for subsequent submission to the State Tax Service of Ukraine.

Avoidance of double taxation (Bulgaria — Ukraine DTT)

An intergovernmental Convention for the Avoidance of Double Taxation (DTT) is in force between Bulgaria and Ukraine. If both countries simultaneously claim an individual as their tax resident (Ukraine — on the basis of citizenship/having a sole proprietorship, Bulgaria — under the 183-day rule), the so-called tie-breaker rules under Art. 4 of the Convention apply:

• 1. Permanent home: Tax residency is attributed to the country where the person has a permanent home available to them (owned or rented property).
• 2. Centre of vital interests: If there is a home in both countries, priority is given to the country with closer personal and economic ties.
• 3. Habitual abode: If the centre of interests cannot be determined, it is assessed in which country the person spends more time.
• 4. Nationality: If the previous criteria coincide, the status is determined by citizenship.

Tax credit mechanism: On the basis of an official apostilled Certificate from NAP, the tax paid in Bulgaria (for example, 10%) is credited when calculating tax liabilities in Ukraine. If the tax rate in Ukraine is higher, only the difference is payable, which protects the taxpayer from paying tax twice on the same income.

Conclusion and recommendation: If you reside in Bulgaria for more than 183 days a year, you need to structure your tax obligations in good time, obtain a Certificate of Tax Residence from NAP, have it apostilled and declare your worldwide income by 30 April, in order to ensure full legal security both in Bulgaria and in Ukraine.