Tax Benefits in Bulgaria based on loans in India

Member since 03 December 2024

surya kumar_2605Member03 December 2024 14:37:41

Hi,

I have heard from one of my colleagues who is staying in Sweden and he is originally from India having a home and car loan. He is in IT services and is taxed around 33% in Sweden . However he declared to the tax department in Sweden regarding his home and car loan that he pays in India. Based on his declaration, the tax department give a certain % tax exemption from the 33% tax that is deducted. Do we have any such benefits in Bulgaria? Thanks.

Warm regards

Surya.

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gwynj Bulgaria Expert

Member since 30 June 2020

gwynjBulgaria Expert04 December 2024 07:20:47

2558

@surya kumar_2605

Bulgaria has a 10% flat tax, with few allowances. There is a possible mortgage interest allowance, but I don't know if you (or an Indian mortgage) would qualify. Car loans and other consumer loans would definitely be excluded. It's for the interest on 50k euros of mortgage, so it's not going to have a huge impact anyway. e,g. 50k annual interest around 2.5k, deduct that from your 50k income and you'd pay tax of 4,750 euros instead of 5,000. :-)

If you have a Bulgarian company (some consider it has tax advantages over self-employment) then interest payments are considered business expenses, reducing the business net income. But this would only be if it's a company car loan (or lease), or a company mortgage.

Even with no allowances, you'd be far better off with a Bulgarian 10% tax rate than a Swedish 33%. And your cost of living and property would also be far lower here.