It's been a while since my last article - a few months filled with health challenges, in fact. But I'm back, (kind of) healthy, and ready to share again.

A New Adventure

As mentioned in the title, I will move to Bulgaria in the coming weeks.If you care about the reasons, stick around :)

Why Bulgaria?

The Tax Situation

In Germany, taxes can significantly erode your income. Germany's tax burden includes up to 45% income tax and another 20.4% towards social security and health care if you're an employee. Otherwise, it escalates to 40.8%, capped at approximately 5,000€ per year.

Let's break it down using a realistic scenario, say, a 50k/year income:

• Gross Income/Month: 4,167€
• Net Income/Month: 2,634.64€
• Income Tax: 636.58€
• Church Tax: 50.92€
• Health Care: 325.03€
• Statutory Pension: 387.53€
• Unemployment Insurance: 54.17€

This means a good 37% (~1.5k) of your original income is gone even at a moderate income level.

Now, what if you made some successful investments in stocks and had a return of 3k? The first 1k is exempt as a savers-tax-free amount, so you pay taxes on anything above that.

• Taxable returns: 2,000€
• Tax amount: 559.90€
• Percentage: ~28%

And that's just on the income side. Germany also imposes a host of consumption taxes, such as:

• VAT: 19%
• Energy tax: 52.9%
• Alcohol tax: 37.7% (non-luxury brands)
• Coffee tax: 8.3%
• Car tax: ~300€/year (2000m³, 2023 model)
• Inheritance Tax: up to 50% (most pay around 11% for Tax Bracket I up to 300k inheritance)
• Gift Tax: as with inheritance tax, applies to any gift with monetary value
• Tobacco tax: 67%
• GEZ: "public" television, touting its adfree anbiased program for ~20€/month - compare it to a netflix account that is actually unbiased, has more documentaries and in general better movies and series for a lower monthly price while available via Internet instead of antiquated technology

... and more.

The Tax Climate in Bulgaria

Bulgaria, on the other hand, has a far more favorable tax situation.

• Income of any kind: 10%
• Social Security, Health Care, retirement, etc: 17%
• Inheritance Tax: 0.4-6.6%
• Gift Tax: 3.3-6.6%
• Real Estate Tax: 0.01-0.45%
• VAT: 20%

So, in the worst-case scenario, I'll pay 27% in taxes and deductibles, which is still lower than the 28% capital gains tax in Germany while being employed. Plus, the highest inheritance bracket in Bulgaria is lower than Germany's lowest. The trade-off is an additional 1% on VAT, but without the slew of special consumer taxes.

Cost of Living: Germany vs. Bulgaria

I currently live on the outskirts of a moderately large German city, Würzburg, in a 60m² apartment. Here's a typical monthly breakdown:

• Rent: 740€ (includes gas, unfurnished)
• Electricity: 80€
• GEZ: ~20€
• Internet: 20€ (basic plan with spotty reliability)
• Food: ~150€ (excluding dining out, just groceries)
• Cats: ~50€ (litter and food, excluding pet care)

Now, let's examine the cost of living in Bulgaria, specifically in Varna, the country's third-largest city located by the beach:

• Rent: ~200€ for a similar-sized apartment, or ~400€+ for a luxury 100m² apartment in a good location, fully furnished, with AC
• Utilities (Electricity, water, gas, etc): ~100€
• Food: ~150€ (with delivery)
• Cats: ~50€ (with delivery)

Quality of Life

Interestingly, food costs can be significantly lower, but for simplicity, I've chosen to keep them constant in this comparison. So, if I were to opt for a luxurious 100m² apartment, complete with three bedrooms, a kitchen, a bath, and a living room, costing about 450€, the overall monthly cost would come up to about 750€.

This includes having all my groceries delivered and access to faster and more reliable internet than I had in Germany. So, for the same amount I used to pay for a smaller, unfurnished apartment in a smaller city without a beach, and where I had to get my groceries myself, I now have a larger, luxurious home near the beach with groceries delivered to my doorstep.

An Upgrade Indeed

• Taxes: From ~37% to ~27% (the difference grows with income)
• Investment Taxes: From ~28% to 10%
• Living Space: From ~60m² to 100m²
• Rent: From 740€ to 450€
• Utilities: From 120€ to 100€
• Access to Beach: No to Yes
• Groceries: From DIY to delivery
• Internet: From unreliable to fast and reliable optic fiber for less €

Moreover, for an extra 30€/week, I could hire a professional cleaner from a company to handle all housework. Going private might yield even more savings given that the average income in Bulgaria is 753€ (the actual majority earns 400-500€/Month for a 40-hour week).

It's clear that Bulgaria offers an enticing package of lower taxes, reduced cost of living, and a better quality of life.

If you are curious about how the actual move is done and what pitfalls I encounter or even what is worse than in germany look forward to my future updates on this experiment :)