How Bulgaria’s Low Taxes Benefit the Rich
In recent years, European countries have been actively competing to attract wealthy individuals by offering a variety of tax breaks. Bulgaria stands out from other European countries due to its low taxes, which makes it particularly attractive to wealthy foreigners and investors. The corporate tax rate here is only 10%, the second lowest in the EU. This tax policy allows wealthy individuals to minimize their tax payments by creating holding companies, according to BGNES.
Competition for the Rich: A Look at European Tax Regimes
Many European countries are eager to attract foreign investment and retain wealthy individuals. According to the EU Tax Observatory, top income tax rates in Europe have not been reduced since the 2008 financial crisis. However, to encourage capital inflow, governments are increasingly introducing tax breaks aimed at foreign nationals.
European tax regimes vary, with each country offering its own unique conditions. For example, countries such as Switzerland, Italy, and Portugal have their own tax breaks for wealthy migrants.
Examples of tax breaks in other countries
Italy
Italy is known not only for its culture and mild climate, but also for its special tax regimes for foreigners. One of the most popular is the flat tax regime, which allows you to pay a fixed amount on foreign income, regardless of its size. This amount was recently increased to 200,000 euros per year. The regime is valid for 15 years, and can only be used by those who have not been a tax resident in Italy for the last 9 out of 10 years.
Switzerland
Switzerland offers a lump sum tax scheme that is of interest to the super-rich. Here, the tax is calculated not based on income, but on the taxpayer’s expenses. However, the minimum rate is around 455,000 euros, making this regime accessible only to truly wealthy individuals.
Portugal
Tax incentives have also become a topic of discussion in Portugal, especially in the context of rising housing prices due to the influx of foreign investors. Although the NHR regime, valid for up to 10 years, allowed for tax exemption on foreign income, Portugal recently amended its tax legislation. Now, tax incentives only apply to certain types of income, and pension payments and capital gains are excluded from this system.
Bulgaria: Unique Opportunities for the Rich
Bulgaria remains one of the leaders in the EU in terms of attractiveness for wealthy individuals. A preferential corporate tax rate of 10% and low personal income taxes allow for effective optimization of tax expenses. The example of Bulgaria shows that tax planning should take into account not only the amount of taxes, but also a whole range of factors, such as social security taxes, capital gains, inheritance and property taxes.
Conclusion
Tax planning for high net worth individuals is becoming an increasingly hot topic in Europe. Countries offering preferential tax regimes, such as Bulgaria, Italy and Switzerland, create favorable conditions for attracting capital. However, it is important to remember that there is no universal tax haven, and the choice of country of residence must take into account many factors, including the size of the income and the nature of the assets.
