--- title: "Bulgaria: what expenses NAP actually accepts | FreeMe.bg" canonical: "https://freeme.bg/en/blog/deductible-expenses-bulgaria" language: en date: 2026-06-17 --- Blog # What can you run through your Bulgarian company? What NAP actually accepts A laptop is the easy case. A car, a home office, and client dinners are not. Here is what really counts as a deductible expense in Bulgaria, and what invites a tax review. [← Blog](https://freeme.bg/en/blog) · 17 June 2026 **In short** NAP accepts an expense when two conditions are met at the same time: it is connected to the business and properly documented, with an invoice made out to the company and its EIK (Article 10 of ZKPO). Laptops and software go through easily. Cars and representative expenses carry their own 10% tax under Article 204 of ZKPO, and a home office is risky and hard to prove. ## The core rule: two boxes, both must be checked If you have run a business anywhere else, "business expense" is a familiar idea. Bulgaria uses the same concept, but the paperwork bar is higher than in most Western countries, and getting it wrong is one of the most common reasons small companies get flagged in a NAP review (NAP is the National Revenue Agency, Bulgaria's tax authority). Two conditions have to be true at the same time. First, the expense has to be **connected to the business activity**: it serves the company, not your personal life. Second, it has to be **properly documented**: an invoice made out to the company, carrying its EIK (the unique company registration number assigned at incorporation, roughly Bulgaria's equivalent of a tax ID). A generic shop receipt is not enough on its own: it does not identify the buyer. This documentary standard is written directly into law: Article 10 of ZKPO (the Corporate Income Tax Act) says an expense is recognized for tax purposes only when backed by a primary accounting document that truthfully reflects the transaction. One detail that surprises expats used to lighter-touch systems: if your company is VAT-registered, that same invoice also carries your VAT deduction right, separate from whether the expense reduces taxable profit. Two different benefits, one document, the same strict formatting rules for both. ## Laptops, phones, software: the easy cases Hardware is the simplest category. A laptop, a phone, a second monitor, software subscriptions, these go through the company without much friction, as long as they serve the business. Nobody expects you to prove you never check personal email on the work laptop. Software subscriptions (design tools, accounting software, invoicing platforms) work the same way: a monthly invoice made out to the company, filed, done. Home office costs are trickier. In theory you can allocate a share of rent, electricity, and internet proportional to the floor space you use for work, but you need a defensible basis for that proportion, and ideally something in writing about which part of the home counts as "office." In practice, many small business owners in Bulgaria choose not to claim this at all, because proving it holds up under a review is hard. If you want to use it, run it by your accountant before you book it, not after. ## The car: the strictest rule of all This is where the confusion peaks, and it is worth flagging early if you are used to simpler rules back home. A company car is a legitimate business expense, but Bulgaria specifically taxes personal use of company assets. If the car is also used privately (the school run, weekend errands, holidays), that personal use creates a so-called **in-kind expense**, subject to its own 10% tax under Article 204 and following of ZKPO, on top of your regular corporate tax. There are two common approaches: keep a mileage log and split costs between business and personal mileage, or have the company opt into the flat 10% in-kind expense tax on personal use instead of tracking every trip. Which is cheaper depends on your mileage, the car's value, and how much personal use actually happens. **Being straightforward here: this is an area where the exact rates, thresholds, and conditions shift and get interpreted case by case, so confirm the current numbers with your accountant before deciding anything.** If you are buying a car through the company, get advice before the purchase. Of all expense categories, this is the one most likely to cause trouble in a review if it is not set up correctly from day one. ## Meals, client dinners, courses, and books A lunch with a client, coffee with a partner, dinner at a business meeting: these are what Bulgarian law calls **representative expenses** (essentially client entertainment). They are recognized in the books, but taxed specifically: a 10% tax on the expense itself (again Article 204 of ZKPO), separate from corporate tax. In other words, they are not forbidden, but they carry their own tax cost, unlike an ordinary supplier invoice. A dinner for yourself alone, with no client and no business purpose, is not a representative expense. It is a personal expense paid with company money, and that exact combination is what draws attention in a review. Courses, books, and conferences go through easily as long as they relate to what the company actually does. A marketing course for a company that sells services makes sense. A yoga course for an accounting firm is harder to justify, unless it sits inside a documented employee wellness policy. ## Business trips: per diems and travel rules Travel for work, a client meeting in another city, a conference, a supplier visit, follows its own rules under Bulgaria's ordinance on business trips. Transport, accommodation, and a **per diem** (a fixed daily allowance for meals and incidentals) are all deductible, but the per diem has a statutory reference amount (around EUR 22 per day with an overnight stay, less for a single-day trip, under the rates in effect from 2026), and any amount paid above that reference becomes taxable income for the traveler unless a different arrangement applies. A trip also needs minimal paperwork: a travel order stating the purpose, destination, and dates. Without it, "a business trip" looks a lot like a personal holiday paid for by the company, and that is exactly the pattern a review looks for. **The exact per diem figures are updated periodically, so check the current rate at the time of travel.** ## The opposite temptation: running everything through the company The mirror-image mistake is just as costly as being too cautious: an owner decides that since the company is paying, everything counts: a gym membership, a family holiday, a birthday gift. The problem is that a review does not look at your intent, it looks at the same two conditions from the start: connection to the business, and documentation. An expense that fails either one gets reclassified, and the company owes the tax back, sometimes with interest and penalties on top. The formula we use for every expense before it goes through the company is simple: **an invoice made out to the company, a real link to the business, and common sense.** If you would struggle to explain the expense to an inspector in one sentence, it is probably not worth the risk. Useful next reads: [How automatic expense booking works with FreeMe.bg](https://freeme.bg/en/expenses) [How VAT and tax filing will work with FreeMe.bg](https://freeme.bg/en/vat-filings) [When you need an expert, and what's included](https://freeme.bg/en/experts) This is exactly why we built FreeMe.bg's expense feature the way we did: photograph a receipt or forward an invoice by email, and our team books it correctly and flags anything borderline, instead of leaving the judgment call entirely to you. ## Don't guess which expense counts. Let us check it Log in with your Google account and start logging expenses: photograph a receipt, we book it correctly, and we tell you if something is borderline. [Get started](https://app.freeme.bg/)