At the end of each calendar year, parents of children under 18 in Bulgaria have the opportunity to take advantage of tax reliefs. These reliefs are regulated by the Bulgarian Income Taxes on Individuals Act and apply to the taxable income of the parents. Parents can choose how to claim their tax relief – either by submitting an annual tax return or through their main employer, who is current as of December 31, 2024. Generally, each relief can be used by only one parent (foster parent, close relative, or kin). If the amount of the relief exceeds the annual tax base of one parent, the difference may be claimed by the other parent.

Detailed information about the relief amounts and conditions for use can be found below:

I. Tax Relief Amounts for Children (2024)

• For one child – the annual tax base is reduced by BGN 6,000, meaning the tax relief is up to BGN 600.
• For two children – the annual tax base is reduced by BGN 12,000, meaning the tax relief is up to BGN 1,200.
• For three or more children – the annual tax base is reduced by BGN 18,000, meaning the tax relief is up to BGN 1,800.
• Children with disabilities – for each child with a 50% or more permanent disability, the annual tax base is reduced by BGN 12,000, meaning the tax relief is up to BGN 1,200.

If the relevant conditions and circumstances are met, parents of a child with disabilities can simultaneously use both the tax relief for a child and the tax relief for a child with disabilities. The reliefs can be used by one parent alone or split between both parents, with one parent claiming the relief for a child and the other for a child with disabilities.

The specified amounts are the maximum each individual can receive, as those with lower salaries and insufficient income will receive part of this amount based on their annual taxable income. The amount of the tax reliefs is deducted from the total tax owed by the company to the National Revenue Agency (NRA), meaning the company’s total tax liability is reduced by the total amount of all tax reliefs. If the total corporate tax due in December is lower than the total amount of the tax reliefs, the difference will be deducted in subsequent months of 2025, meaning the company will recover the paid-out funds for tax reliefs from its future obligations to Bulgarian tax authorities.

II. Conditions for Use

• Child’s Age – The child must be under 18 years of age. The tax reliefs are also applicable in cases where the child is born or turns 18 within the tax year, i.e., between January 1, 2024, and December 31, 2024.
• Residency Status – The reliefs apply to children who are residents of Bulgaria.
• Applicant – The relief can be used by one parent or split between both parents if both have income.
• Documentation – The relief can be claimed before the annual tax recalculation for each individual, i.e., in December each year, through an NRA form.
• Documents proving the parent-child relationship and the child’s status are required (e.g., birth certificate or disability certificate, if applicable).
• Individuals who have had multiple employers throughout the year must provide their current employer as of December 31 with all tax certificates under Article 45 of the Income Taxes on Individuals Act from their previous employers for income earned after January 1, 2024.

III. Individuals who cannot use the tax relief:

• Outstanding public debts to the Bulgarian tax authorities – Individuals with unpaid public debts to Bulgarian tax authorities are not entitled to the tax relief.
• Individuals on maternity leave – Individuals who were on maternity leave for the entire year or received other non-taxable income cannot use the tax relief, as they did not earn taxable income and therefore do not have an annual tax base to apply the tax relief.