No. Bulgarian legislation does not provide for a minimum threshold for which no taxes are due and you do not need to file a tax return. Whether the NRA employees will ever find out about this income and even find out whether they will take the time and effort to deal with you is a separate question. Everyone has to answer it for themselves. When assessing the risk of not filing a tax return, keep in mind that the fine is up to BGN 500 for the first violation and up to BGN 1,000 for the next.
Do you owe taxes if you have not withdrawn from your account and reinvested everything?
Yes. Tax is due on the realized profit, regardless of whether and for what it was used. You can make an analogy with your salary. Your tax is deducted whether you spend it or not. If you leave it in the account, you pay the same tax as if you spend it. To estimate tax refund and profits you can make use of the tax calculator there now.
In the same way you pay tax on interest on deposits or bank accounts. If you only deposit into a bank account or deposit without withdrawing, you pay tax. Although you do not declare them, these taxes are withheld at the time the interest is transferred to the account and are visible in the account statements.
The tax exception
The only exception to the previous question is on the product. At least you don’t know any others. The reason is that it is a structured investment product in which you do not buy loans directly, they do not mature and you do not receive interest directly in your investor account. Until you withdraw money from the investment in Go & Grow to your investor account, you do not owe taxes on the shown return.
The closest analogy is with a term deposit, the interest on which is accrued at the time of its closure. In a similar way, for example, you see the amount of interest accrued on your current account, but it is transferred to me at the end of the year and only then is tax charged.
We can make an analogy with stocks. When you buy stocks, even though their value may increase, you owe nothing until you sell them. Selling them is the moment you make your profit. It doesn’t matter if you buy other shares with it or spend it – you owe tax on it.
This specificity of the taxation makes it very attractive for long-term investment, because despite the fact that it is not paid into the investor’s account and is not subject to taxation, the interest is actually accrued and reinvested. This allows you to take full advantage of the complex interest rate and realize a better return on long-term investment, actually receiving income from money that you would pay for taxes.