Cryptocurrencies are not defined as financial instruments or electronic money, so no license is required to do business with them.
In Bulgaria, as in the EU, they are treated in the same way as income from the sale of financial assets - they are taxable.
To determine the taxable income, the sum of the profits realized during the year for each specific transaction is taken and reduced by the sum of the respective losses.
The realized profit or loss is determined by reducing the selling price by the acquisition price of the financial asset. Finally, the income, which has been thus calculated, is declared with the Annual tax return.
Although the virtual currency isn’t an official one, most jurisdictions require you to pay taxes on income, sales, salaries, and capital gains on anything of value, including Bitcoins. Everyone has a responsibility to ensure that they comply with tax and other laws or regulations issued by the government and/or local municipalities concerned.
If cryptocurrency trading is done professionally, the tax base is determined by virtue of the application procedure for corporate income taxation. In this case, the applicable income tax rate is 15%.
Included in the annual personal income tax return.
Taxable Events in Crypto in Bulgaria
- Transfer (exchange) If against one virtual currency is purchased another and income has been realized from this exchange, this income is taxable.
The income from such transactions is declared in the Annual tax return. Taxable income is present when a profit is realized.
Payment received in cryptocurrency (for example, for a service or product)
When the payment of a certain type of income subject to taxation is in cryptocurrency, the taxation is again in accordance with the current tax rules for the respective income.
Purchases made with cryptocurrency
If you purchased a virtual currency some time ago, its value has increased and then you have purchased an asset directly with it, then the difference between the purchase price and the value of the asset is not taxed or declared.
Mining of cryptocurrency
The NRA accepts that the mining of cryptocurrency is not a separate type of income. The general rules apply to taxation.
Disclaimer: This is not a legal, tax, accounting or investment advice. It is general information which should only be used for introduction purposes. You should consult with a tax/legal specialist.