Bulgaria doesn't use a "tax-free gift" model at all, and it's worth being direct about that up front. There's no equivalent of a per-employee annual allowance like Poland's ZFŚS rule or Italy's €1,000 fringe benefit threshold. Instead, Bulgaria runs a genuinely different mechanic: certain in-kind employer benefits are taxed at a flat 10% rate, but the tax is paid by the employer, as a final settlement, instead of being added to the employee's personal income tax and social security base. This is called "данък върху разходите" (tax on expenses), set out in Articles 204–217 of the Corporate Income Tax Act (ЗКПО). It's a fundamentally different structure from most of the countries in this series, so treat every comparison to a simple exemption amount with caution.
How the 10% expense tax works
Under ЗКПО Articles 204–217, when an employer provides certain benefits in kind to staff, the company (not the employee) settles a flat 10% tax on the value of those benefits. This replaces, rather than adds to, ordinary payroll taxation of that value: the benefit isn't run through the employee's personal income tax return, and it isn't added to the social security contribution base. The company pays 10% of the expense once, and that's the end of the tax treatment for that item.
Two conditions matter enormously here, and missing either one changes the outcome completely.
The benefit has to be given equally to all staff. The 10% regime only applies to benefits provided on an equal, company-wide basis, a Christmas gift for every employee, a food voucher scheme open to the whole team, a shared social benefit. The moment a gift becomes selective or individually chosen (a bigger bonus for one manager, a hand-picked gift for a top performer), it falls out of the expense-tax regime entirely and reverts to ordinary taxable remuneration for that individual: full personal income tax and social security contributions, exactly as if it were salary.
Cash never qualifies, under any circumstances. This is the point most likely to trip up an employer coming from a country with a cash-friendly allowance. Cash gifts and cash bonuses are always treated as ordinary labor remuneration in Bulgaria, regardless of whether they're given equally to every employee on the payroll. Cash simply never accesses the 10% employer-tax regime; it's fully subject to personal income tax and social security contributions in every case. Only non-cash, in-kind benefits can potentially qualify for the 10% treatment, and only when distributed equally.
The two specific carve-outs: insurance and food vouchers
Within the in-kind benefits that are eligible for the 10% regime, Bulgarian tax law carves out two specific categories where a monthly ceiling applies before the 10% tax even kicks in. Outside of these two categories, no equivalent monthly exemption has been identified (more on that below).
Voluntary pension, health, and life insurance contributions. Employers can contribute up to €30.68 per employee, per month, toward voluntary pension, health, or life insurance without triggering any tax on that portion at all. Anything the employer contributes above that monthly ceiling is taxed at 10% under ЗКПО Art. 208. The €30.68 figure is the EUR-converted value of the original BGN threshold, calculated at Bulgaria's fixed euro adoption rate following its 1 January 2026 changeover.
Food vouchers. Employers can provide food vouchers, whether paper or electronic, issued through a licensed voucher operator, up to €102.26 per employee, per month, free of the 10% tax. Any amount issued above that monthly ceiling is taxed at 10% under ЗКПО Art. 209а. As with the insurance figure, €102.26 is the converted value of the statutory BGN ceiling.
These two carve-outs are narrow and specific: they apply to insurance contributions and food vouchers only, and both are capped on a monthly, per-employee basis rather than as a single annual lump sum.
12 gift ideas
Here's the honest part: general or occasion-based gifts, Christmas presents, holiday gift vouchers, physical items handed out as a seasonal thank-you, are not covered by either of the two specific carve-outs above. No specific exempt threshold could be confirmed for this category in Bulgarian tax law. That means the practical, defensible assumption is that the full value of this kind of gift remains subject to the 10% employer expense tax, not that it's free of any tax at all. The 10% rate on the full value is still considerably lighter than running the same gift through payroll as personal income, which is exactly why Bulgarian employers use the in-kind, equally-distributed route in the first place, but it isn't a "tax-free" outcome. With that framing in mind, here are 12 branded merchandise options at a range of price points. For a longer list, see our roundup of 20 corporate gift ideas for teams in Bulgaria.
1. A5 Notebook
An A5 hardcover with elastic closure and ribbon marker, a modest, practical item that's easy to distribute across an entire team.
- Material: FSC-certified paper, PU cover.
- Branding: debossing or print on the cover.
- Order: MOQ 100 · from €4.58/unit.
2. Sports Socks
Sunday's most-ordered item, a small, unexpected gift that always lands well and stays firmly modest in value.
- Material: 80% cotton, 17% polyamide, 3% elastane.
- Branding: knitted-in logo zones.
- Order: MOQ 100 · from €4.00/unit.
3. Premium Tote Bag
A heavyweight cotton tote with a premium feel, everyday enough to actually get used.
- Material: 270gsm cotton.
- Branding: print or custom straps.
- Order: MOQ 100 · from €6.44/unit.
4. Knitted Scarf
A higher perceived-value item, well suited to a winter or year-end round of gifting distributed equally across staff.
- Material: 80% viscose, 20% polyester.
- Branding: woven label.
- Order: MOQ 100 · from €7.66/unit.
5. Baseball Cap
An affordable, highly visible accessory that works all year round and distributes easily across a whole team.
- Material: 100% cotton.
- Branding: embroidery.
- Order: MOQ 100 · from €8.34/unit.
6. Espresso Mug
A compact espresso-sized mug, a small everyday object that sits on the desk without drawing attention.
- Material: ceramic.
- Branding: print.
- Order: MOQ 108 · from €8.44/unit.
7. Recycled Steel Bottle
Vacuum insulation in recycled stainless steel, a gift that gets used and seen every day.
- Material: recycled stainless steel.
- Branding: laser engraving or print.
- Order: MOQ 50 · from €11.00/unit.
View the Recycled Steel Bottle →
8. Bamboo Tea Bottle
A bamboo exterior over a durable stainless steel interior, a warmer-looking alternative to an all-metal bottle.
- Material: stainless steel, bamboo.
- Branding: laser engraving or print.
- Order: MOQ 50 · from €18.70/unit.
9. Hoodie – The Rex
A heavyweight hoodie with a premium fit, the kind of higher-value item worth reserving for a smaller, whole-team occasion rather than an individually chosen reward.
- Material: heavyweight cotton-blend fleece.
- Branding: print or embroidery.
- Order: MOQ 100 · from €40.09/unit.
10. RollTop Backpack
A water-resistant backpack with a laptop compartment that quickly becomes someone's everyday bag.
- Material: GRS-certified recycled PU, water-resistant.
- Branding: print or embroidery.
- Order: MOQ 25 · from €24.57/unit.
11. Noise-Cancelling Headphones
A genuinely premium tech gift, well suited to a company-wide milestone rather than a selective, individually-chosen reward.
- Material: recycled ABS plastic, foam ear cushions.
- Branding: pad print or laser engraving.
- Order: MOQ 50 · from €24.46/unit.
12. Wireless Powerbank
A practical everyday tech item, useful without tipping into standout, individually-selected gift territory.
- Material: recycled ABS plastic.
- Branding: pad print or laser engraving.
- Order: MOQ 50 · from €18.39/unit.
What about client gifts?
Gifts to clients and business partners follow a different split again, and the distinction that matters most is whether your own branding is on the item.
Branded promotional items. Pens, mugs, calendars, samples, or any item carrying your own company logo count as "разходи за реклама" (advertising expense). These are fully deductible for corporate tax purposes, they don't fall under the 10% expense tax at all, and there's no value threshold to worry about for the corporate tax side of the analysis.
Unbranded gifts. Wine, hampers, or any other gift to a client or partner that doesn't carry your branding is classified as "представителни разходи" (representative expenses). These are subject to the same 10% expense tax that applies to employee benefits, on the full amount, with no threshold. On top of that, input VAT on unbranded representative gifts is not deductible.
The VAT small-value rule. Separately from the above, Bulgarian VAT law includes a de-minimis rule: gifts with a market value below approximately €15.34 (30 BGN), given away free of charge for promotional purposes, are not treated as a taxable supply, meaning no output VAT applies. Input VAT stays deductible in this case, and that holds even for samples of any value, not just those under the €15.34 mark.
Common mistakes
- Assuming employee gifts are simply "tax-free" up to some amount. Bulgaria's system doesn't work that way at all: there's no personal exemption to check a gift against. Instead, the employer either pays a 10% expense tax on qualifying in-kind benefits, or the gift is treated as ordinary taxable remuneration. Looking for a single "safe" euro figure, the way you might for Belgium's €40 rule or France's URSSAF threshold, will lead you to the wrong conclusion here.
- Giving a selective or individually-chosen gift and losing access to the 10% regime. The moment a benefit stops being distributed equally across all staff, it defaults straight back to full personal income tax and social security contributions on that individual's payslip, exactly like ordinary salary. Equal distribution across the company isn't a nice-to-have; it's the condition that makes the entire 10% regime available in the first place.
- Giving an unbranded client gift and assuming it's treated like a branded promotional item. A branded pen and an unbranded bottle of wine look similar on an expense report, but they sit in completely different tax categories: one is a fully deductible advertising expense outside the 10% regime, the other is a representative expense that pays the same 10% tax as employee benefits and loses input VAT deductibility.
Note: this article is a general explainer, not tax advice. Bulgaria's expense-tax mechanic under ЗКПО Articles 204–217 involves several conditions (equal distribution, cash exclusion, the two specific carve-outs) that interact differently depending on how a gifting programme is structured, so confirm treatment with your accountant before relying on it, particularly for anything beyond the two carved-out categories.
Order gifts for your team
Every product above is fully customisable with your branding and available in business order quantities. Browse the full range in the Sunday catalogue to put together an equally-distributed gifting programme for your Bulgarian team, or see our full list of 20 corporate gift ideas for teams in Bulgaria for more options.
