Bulgarian taxes in a glance
Corporate income tax
10%
Personal income tax
up to 24%1
Social protection and health insurance
36.4%2 of the insurance put faitth on between BGN 160 in addition to BGN 1,400.
VAT rates
20% (0% regarding exports; 7% efficient rate for several traveller services).
Withholding tax
7% on:
� rewards and also liquidation quotas distributable to non-residents3,4,
resident men and women as well as non-profit entities;
10% on:
� interest, royalties, complex and also software provider service fees along with many other
incomes payable to non-residents3.
One-off taxations on selected expenses
� 10% on representation expenses, some expenses connected that will usage of
v ehicles pertaining to management purposes, and also on interpersonal expenses
provided in-kind.
Bulgarian taxes at the glance
Local fees and al so fees
Relate for the most part that will real estates, vehicles, donations, inheritance, plus garbage
collection.
Excise duties
Apply to alcohol, tobacco, some powers as well as others.
Customs duties
Due to the customs cost upon importation of goods.
Environmental fees
Include item fees upon waste materials from packaging and also expenses on heavy resource oil.
Specific corporate salary taxes regimes
Apply to help collective investment schemes, accredited investment companies, specia l
purpose purchase companies, casino businesses, and some others.
Taxation regarding business profits
Corporate income tax rate
10% around the taxable profit.
Taxable profit
Statutory accounting profit/loss adjusted intended for tax purposes.
Statutory accounting
Maintained with BGN on accrual basis. IFRS are progressively introduced like a basis
for pr eparing in the economic claims from the companies6.
Adjustments pertaining to tax purposes
Expenses possibly not linked to the business pursuits or even not necessarily appropriately documented, expenses
related that will impairment of assets, provisions for liabilities, revaluation reserve in
certain cases, and others.
Tax residency
Companies are regarded for being taxes resident around Bulgaria as long as they usually are signed up in
Bulgaria.
Permanent establishments associated with non-resident entities in Bulgaria tend to be taxed like
resident companies.
Tax helped depreciation
4% to be able to 50%, depending on any type of the actual asset underneath the particular straight-line
depreciatio n method.
Thin capitalisation
Interest fees may not be absolutely deductible when the debt/equity percentage associated with the
company exceeds 3:1.
Taxation of manage ment and business profits
Carry forward connected with taxes losses
Tax profits / losses could be carried forwards on the pursuing five consecutive years.
Foreign origin losses may perhaps be balanced out solely versus taxable take advantage of this same
source. Relief is actually created with respect to EU form losses, which may always be offset
against other source income around selected circumstances.
Returns
To possibly be sent in annually by way of 31 March of the following year or so (the levy year is actually the
calendar year).
Payment
The tax within your twelve-monthly taxes returning will be due by 31 March belonging to the next year.
Advance payments are due on some sort of groundwork determined by the law.
Taxation with dividends and liquidation quotas
Subject in order to 7% withholding tax whenever allocated to be able to homeowner individuals, resident
non-profit e ntities and non-residents (there is surely an exemption concerning dividends
distributed in the mode involving more explains to you as well as boost on the small benefit of the
current shares).
Dividends given away by a Bulgarian citizen company to your levy homeowner company in a
EU Member condition should definitely not possibly be subject to Bulgarian withholding tax, beneath certain
conditions.
Profits sent out by way of Bulgarian branch for you to it's dad or mum firm abroad will not
be foreclosures Bulgarian withholding taxation.
Generally, rewards handed out to citizen providers may not be considered as
taxable income (except regarding dividends distributed simply by special goal investment
companies).
Withholding taxes � non-residents
Taxable income
� rewards in addition to liquidation quotas (please additionally observe segment Taxation on
c orporate profits);
� interest, royalties, franchising and also factoring;
� technical and management providers fees;
� revenue through consumption associated with removable and immovable property;
� capital acquires coming from copy regarding area real estates;
� money gains from shift of personal characteristics written by simply this State, a
m unicipality and also a local company7.
Withholding tax rate
10% within the taxable earnings (7% with returns and also liquidation quotas, and
exemption with certain cases). The withholding tax rate could be minimized under an
applicable twice duty treaty.
Dividends distributed with a Bulgarian homeowner provider that will an entity � tax resident
in a EU Member state should certainly certainly not be at the mercy of Bulgarian withholding tax, under
c ertain ailments (including keeping with a lot more than 15% in the gives you throughout the
B ulgarian corporation s for a minimum of 2 years).
Payment
When this payer is really a Bulgarian resident thing as well as a exclusive worker and also a permanent
establishment of the non-resident, the tax needs to be remitted for the price range within
three several weeks following the month involving accrual from the income because of the payer (or the particular month
of the decision pertaining to supply of dividends as well as liquidation quotas).
If the payer is actually neither of them of the above, together with inside circumstance with budget acquires coming from transfer
of nearby real estates in addition to monetary assets, your taxes must be paid with the beneficiary
within three months following your thirty days associated with receiving this income8.
Withholding taxations � non-residents
Application with two times taxes treaties
A non-resident may reap the benefits of a new dual tax treaty reduction so lo ng as an
a dvance clearance instrument is obtained with the Bulgarian tax authorities
f ollowing a selected procedure.
Bulgaria possesses more than 60 2 bottle taxes treaties within force, which include with most
E uropean countries, which in turn in general abide by this OECD Model. The Double Tax
Treaty with the USA is definitely closed it is supposed to enter force, while of
1 January 2008.
Taxation of expenses
10% one-off duty is usually thanks on:
� �social� expenditures provided throughout style towards the employees (e.g. fringe b enefits
p rovided to employees), aside from foodstuff vouchers around BGN 40 per
e mployee month to month along with voluntary insurance policies charges (pension, health,
unemployment and/or specialist qualification, a life insurance policy along with life
i nsurance linked to a good purchase fund) as long as BGN 60 every employee
mont hly;
� representative in addition to entertainment expenses;
� some charges related to utilize of cars intended for operations purposes.
Generally, your over expenses along with the tax upon these are tax deductible for the
companies.
Corporate duty incentives
Reduction with the corporate profits tax
The company income tax because of could be reduced:
� by 10% with a number of bought fixed assets (applicable for firms operating
within locations connected with higher unemployment);
� while using compulsory social stability charges paid through the interviewer with
regard for the hired innovative staff inside regions of higher unemployment;
� through 60% - suitable regarding farming manufacturing entities;
� by way of 50% - applicable for sociable safety as well as health insurance funds
established through law, assert schools and universities;
� with additional cases.
Full affording back again in the corporate and business cash flow tax
The corporate revenue levy due will be fully granted backside for assets and
production things to do in high unemployment regions, as well as throughout various other precise cases
determined by law.
Restrictions to get software on the incentives
The application belonging to the incentives posted over might be susceptible to additional
conditions, including point out support admissibility restrictions.
Specific corporate and business earnings tax regimes
Scope
Applicable for:
� exclusive purpose investment companies;
� collective expenditure of money schemes;
� licensed investment decision companies;
� persons involved within marine professional shipping;
� gambling businesses;
� and many others.
Exemption from business enterprise and income tax
Special function investment decision companies, qualified expenditure of money companies
of c lo vertisements e-en ve had kind and also collective expenditure schemes, authorised intended for public
o ffering inside Bulgaria, will not be subject to corporate cash flow tax.
There may also be some other exemptions contingent on law.
Personal profits taxation
Rate
The highest minor taxes rate is 24%, applicable to help total taxable income
exceeding BGN 7,200.
Scope
Generally, taxable salary involves been given fiscal income, �social expenses�
provided throughout money as well as gains in-kind.
Bulgarian taxes people will be taxed on their worldwide income, when non-residents
are taxed on their Bulgarian resource earnings only.
Tax residency
In general, tax residency can be determined about the foundation connected with lasting domicile, more
than 183-day relax in Bulgaria in almost any 365-day time plus centr e of essential interest in
Bulgaria. The center involving vital curiosity is driven intended for your individual�s
personal and also economical jewelry to be able to Bulgaria along with a variety of factors will be c onsidered
in the following respect, for example family, possession with property, the best place where

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