Tax on bank deposit interest in Bulgaria

The interest a bank credits to your deposit isn’t pure profit — tax is due on it, withheld automatically by the bank.

What the rate is

Interest income on bank deposits held by individuals is taxed at a flat 10% withholding tax. The bank deducts it automatically when interest is paid out or compounded — you don’t need to file a return or pay it separately.

What exactly it applies to

The tax is on the interest earned, not the principal. The deposit calculator on this site shows gross interest — the amount you actually receive is 10% lower.

Example: if the deposit calculator shows €100 of interest earned, you actually receive €90 after the withheld tax, with €10 going to the state via the bank.

Are there exceptions

Current/checking accounts with no interest obviously generate no tax. Interest income from deposits held outside Bulgaria, or from certain specific financial instruments, can fall under a different tax treatment — if in doubt, consult an accountant, especially if you have foreign income.

Why compare net, not gross, interest

When comparing deposit products across banks, the advertised rate is already an apples-to-apples comparison, since the 10% tax rate is the same for every individual’s deposit. The real difference between products comes from the rate itself, the term, and compounding — not the tax.

Related

Weighing a deposit against paying off a loan early? See the loan calculator and the guide on APR vs. interest rate.