Is Investment Gold Taxable for Individuals or Not?
Is Investment Gold Taxable for Individuals or Not?
💰 Capital Gains Tax
💰 VAT
1️⃣ First and foremost: we're primarily talking about sales.
❓Why?
⏩️ Answer: Because when calculating our profit from a transaction or activity, we're interested in realized gains. Unrealized gains, as a rule, are not taxable in Bulgaria—neither for businesses nor for individuals. Of course, there are some exceptions, typically applying to financial institutions.
▶️ Capital Gains Tax
We only tax the profit (i.e. all revenue minus documented acquisition costs—meaning, keep your purchase receipt forever or at least 10 years after the sale).
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But I read somewhere that it’s not taxable, and now you're saying it is... Which is correct?
Here’s my answer:
Gold is not specifically regulated under the Personal Income Tax Act (ЗДДФЛ), so the general rules of the law apply. If anyone disagrees (which is fine), they can open ЗДДФЛ on lex.bg and search the law for the keyword “gold.” The results are exactly zero.
✅ Here’s the general regulation:
Types of income are listed in Article 10. Gold sales fall under:
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Point 5: income from transfer of rights or property,
or, if we’ve been trading actively, -
Point 2: income from business activity as a sole trader.
✅ When do we acquire the income?
💰 See Article 11: upon cash payment, receiving a bank transfer, etc.
This tells us the date of the taxable event—simply put, it’s the day we sell the gold and receive payment.
✅ Then, in Article 12, we are told:
“Taxable income
(1) Income from all sources acquired during the tax year is taxable, except for those expressly exempted by law.
(2) Where the law allows deduction of expenses, these are taken into account when determining taxable income.”
⚠️ Translation: Absolutely all income is taxable, regardless of source, place, or type. ‼️
❓Still, is there a chance to avoid taxing gold?
Let’s analyze Article 13 of ЗДДФЛ titled “Non-taxable income”.
⚠️ Translation: All income is taxable unless it is explicitly exempted.
So we read the law from top to bottom again.
In it, it says:
“Not taxable:” … (e.g., real estate in para. 1, point 1), and in points 2 and 3, a list follows, but includes exceptions...
⚠️ Translation: Even among the non-taxable income types, there are exceptions… and those exceptions are taxable. Congratulations!‼️
▶️ The exceptions are:
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(v): shares, equity, compensatory instruments, investment vouchers, and other ⚠️financial assets, as well as income from foreign exchange trading.
⚠️ Important confusion alert:
▶️ In the next point 3, some specific financial assets are listed as non-taxable!
These include:
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shares,
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collective investment schemes (CIS),
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government securities (G-Secs),
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and subscription rights to public companies and CIS.
But none of the other assets considered financial assets are exempt!
❗Now for the climax❗
❌ If we assume investment gold is personal property (not a financial asset or foreign exchange), we could play dumb and skip declaring the profit. The real question is—will the tax office catch you?
✅ If we treat investment gold as a financial asset (which is my opinion), the profit is taxable.
What’s next once we agree it’s taxable income?
We need to determine how it’s taxed:
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Is it at 10% or 15%,
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And is it subject to social security contributions?
1️⃣0️⃣ vs. 1️⃣5️⃣ percent rate ❓
▶️ Short answer:
If I invest my savings in gold and make occasional purchases and sales, it’s not a business activity.
Then I fall under Article 33 of ЗДДФЛ and pay tax on the difference between sale and purchase price.
If there’s a gain, I can deduct 10% statutory expenses from it. If there’s a loss, I can offset it against gains from other financial instruments in the same year.
But:
If I’ve been trading frequently—say, every month—and my yearly sales total, for example, over 10,000 BGN (note: this threshold is not in the law, but is based on audit and court practice), then I’ll be considered a trader.
▶️ In that case:
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I’ll be taxed as a sole trader,
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The tax rate becomes 15%,
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The income may be subject to social security contributions,
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The one upside is that past losses can offset future profits, and that applies to all activities, not just financial assets.
About VAT and the difference between investment and jewelry gold?
➡️ I’m too lazy to write more now. This will be in Part Two 🙂
Or simply put:
To be continued...
