Bulgaria and Cryptocurrency

Bulgaria Cryptocurrency Law
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

Is cryptocurrency legal in Bulgaria?

The Financial Supervision Commission (‘FSC’) in Bulgaria has not issued explicit legal guidance.

Monitoring strategy

In Civil Case No. 984/2015,
In C 264/14,

Under Council Directive 2006/112/EC, linked here in the Official Journal of the European Union, a turnover tax applies with respect to the following:

  • certain supplies of goods; and
  • certain services provided by a taxable person

provide, through a company, services consisting of the exchange of traditional currency for the ‘bitcoin’ virtual currency and vice versa.

11      According to the order for reference the ‘bitcoin’ virtual currency is used, principally, for payments made between private individuals via the internet and in certain online shops that accept the currency. The virtual currency does not have a single issuer and instead is created directly in a network by a special algorithm. The system for the ‘bitcoin’ virtual currency allows anonymous ownership and the transfer of ‘bitcoin’ amounts within the network by users who have ‘bitcoin’ addresses. A ‘bitcoin’ address may be compared to a bank account number.

Article 2 of the VAT Directive provides:

‘1.      The following transactions shall be subject to VAT:

(a)      the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;

(c)      the supply of services for consideration within the territory of a Member State by a taxable person acting as such;


 Article 135 of the VAT Directive provides:

‘(1)      Member States shall exempt the following transactions:

(d)      transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection;

(e)      transactions, including negotiation, concerning currency, bank notes and coins used as legal tender, with the exception of collectors’ items, that is to say, gold, silver or other metal coins or bank notes which are not normally used as legal tender or coins of numismatic interest;

(f)      transactions, including negotiation but not management or safekeeping, in shares, interests in companies or associations, debentures and other securities, but excluding documents establishing title to goods, and the rights or securities referred to in Article 15(2);


The Bulgarian National Revenue Agency,

In letter no. 24-34-50 of 2014, the Bulgarian National Revenue Agency

In statements No 24-34-40 and No 24-34-39 of 2014, the Bulgarian National Revenue Agency :

  • The income from the sale of Bitcoins is to be interpreted as income from the sale of financial assets.
  • According to Art. 33 (3) of the People’s Income Tax Act, the taxable income from the sale or exchange of financial assets represents the sum of the profits generated in the year, calculated for each individual business, and reduced by the amount of losses incurred in each year for each individual business.
  • The taxable income in accordance with Art. 33 para. 3 of the People’s Income Tax Act are taxed on the basis of the annual tax base and must be stated in the annual income tax return.

On February 14, 2018, the National Bank of Bulgaria announced that it joins the position of the European supervisory authorities on the risks inherent in buying virtual currencies. The Bank noted that such currencies show extreme price volatility and signs of a pricing bubble.[154] According to the Bank, consumers buying virtual currencies should be aware that there is a high risk that they will lose a large amount, or even all, of the money invested.[155]

Bulgarian tax authorities reportedly issued rulings in 2014 requiring individuals to pay taxes on gains from selling cryptocurrencies, similar to the sale of financial assets.[156]

In 2015 a Bulgarian court reportedly concluded that activities associated with buying, selling, and paying with cryptocurrencies are not subject to licensing requirements.[157]

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency.  The globe below provides links to country-by-country summaries:

The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance.  Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.

[154] Press Release, National Bank of Bulgaria, European Supervisors Warn Consumers About the Risks of Buying Virtual Currencies (Feb. 14, 2018), (in Bulgarian), archived at

[156] Marin Marinov, Legal and Tax Treatment of Bitcoin in Bulgaria, Ruskov & Colleagues (Nov. 20, 2017),, archived at

[157] Id.

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