This article explains how business expenses are reimbursed in Bulgaria, what documentation is required, and when reimbursements qualify as non‑taxable.
1. Mileage Reimbursement in Bulgaria
Bulgaria uses a state‑regulated mileage rate when an employee uses a personal vehicle for business purposes.
Standard Mileage Rate
0.25 BGN per km (approx.)
Mileage reimbursement must be supported by:
A mileage log (date, route, kilometres, business purpose)
A valid travel order (see Section 3)
Parking & Tolls
Reimbursed separately
Receipts required
Business purpose must be clearly indicated
2. General Travel Requirements
Travel costs are reimbursable when they are:
Business-related
Pre-approved
Documented with a valid travel order
(“Командировъчна заповед”) for:Domestic travel
International travel
There is no statutory km cap, but mileage must reflect actual business travel.
3. Transportation Expense Rules
Air Travel
Economy class is standard
Higher classes allowed if permitted by company policy and justified
Train / Tram / Bus
Reimbursable with official tickets or receipts
Taxi
Reimbursable with a receipt
Must indicate business purpose
Rental Cars
Allowed when justified
Requires:
Rental contract
Invoice
Fuel receipts (if company vehicle is used)
Fuel Receipts
Not required for mileage reimbursement based on the state rate
Required only when using a company vehicle
4. Documentation Requirements (Tax-Free Eligibility)
To keep expenses non‑taxable and deductible, all claims must be supported by original invoices or receipts containing:
Supplier’s name
Supplier’s EIK/BULSTAT (Bulgarian tax ID)
Date
Amount
VAT (if applicable)
Description of goods/services
Employee name is not required, but:
The invoice should preferably list the employer’s legal entity:
Pondway Bulgaria Ltd (Пондуей България)
Documentation is essential, insufficient records may lead to amounts being treated as taxable income for the employee.
5. Tax-Free Reimbursable Business Expenses
The following can typically be reimbursed tax‑free when properly documented:
Business meals (with receipt)
Taxi, bus, train, tolls, parking (with receipts)
Accommodation (hotel invoice)
Mileage up to the state-approved 0.25 BGN/km
Client entertainment (with documentation)
Conferences, seminars, and training costs
Work-related phone/internet (pro-rated)
6. Per Diems in Bulgaria
Per diems must follow state-approved limits to remain non‑taxable.
Domestic Travel
20 BGN per day (standard non‑taxable amount)
International Travel
Rates vary by country
Typically 35–50 EUR per day for EU destinations
Set by the Bulgarian Council of Ministers
Rules for Per Diems
Per diems are tax-free if:
Within official limits
Supported by a travel order
Amounts above the statutory limits are taxable
Travel Order Requirements
Before the trip:
Employee must fill out a travel order specifying exact departure and return times
After the trip:
All invoices and receipts must be submitted
Employer calculates final per diem amounts based on actual travel time
7. Entertainment, Gifts & Events
Business Entertainment
Allowed if the business purpose is clear
Must be supported by receipts
Gifts
Client gifts under 100 BGN may be tax‑free
Higher-value gifts may become:
Taxable employee benefits, or
Subject to corporate tax adjustments
Team Events
Reimbursable if business-related and documented
Personal or non-business activities may be taxable benefits
8. Non‑Reimbursable or Taxable Personal Benefits
Unless required by law or directly tied to job duties, these are generally taxable benefits:
Gym memberships
Sports, fitness, yoga, swimming
Therapy or wellness services
Personal expenses unrelated to business needs
9. VAT Rules in Bulgaria
VAT applies to most goods and services:
20% standard VAT
10% reduced rate for some categories (e.g., hotels)
The employer can reclaim VAT if:
The invoice is addressed to Pondway Bulgaria Ltd (or applicable legal entity)
The expense is business-related
The entity is VAT-registered
If the invoice is incorrectly addressed or incomplete, VAT may not be reclaimable.