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Main Bulgarian Tax Acts

The Bulgarian tax regime can be presented in two main categories:

Direct Taxation:

and Indirect Taxation:

Note: Presented in this page Acts are shown just for general information and does not pretend for any accuracy, exactness or completeness. Printing mistakes are possible.

If you want to have some more popular information about the above Acts you can also visit the web site of our Ministry of Finance or the site of Bulgarian National Revenue Agency.

Corporate Income Tax Act (CITA)

According to (CITA) all companies and partnerships, carrying out business in Bulgaria, are liable to CITA. Foreign entities are taxed on their Bulgarian-source income.

Annual profit must be declared till 31 March at the latest of the year following the taxable year. The taxable profit is determined in accordance with the provisions of CITA, Chapter ІІ.

Annual depreciation norms in Bulgaria are fixed in the following categories:

Cat.	Assets Description	Norms in %
I	solid buildings, including investment properties, plant, transmission facilities, electric power carriers, communication lines;	4
II	machinery, process equipment, apparatus;	30
III	means of transport excluding automobiles; surfacing of roads and runways;	10
IV	computers, computer peripheral equipment, software, and right to use software;	50
V	vehicles;	25
VІ	tax tangible and intangible fixed assets whereof the period of use is restricted according to contractual relationships or a legal obligation	100/years of legal restriction. The annual rate may not exceed 33 1/3
VII	all other depreciable assets;	15

Personal Income taxation

For the annual levying and declaring of income received during the year, the regulations of the new Law on taxes on the income of natural persons, effective from 01.01.2008, are applied.

Tax on the total annual tax base is levied on the income of natural persons, including sole traders, received from:

Labor relations;
Other commercial activity;
Rent or other provision of rights or property to be used against consideration;
Transfer of rights or property;
Income from other sources.

The amount of the tax on the total annual tax base is determined to be 10%.

Under the Law on taxes on the income of natural persons, tax liable persons are individuals – resident and non-resident of Republic of Bulgaria, and sole-trader corporate entities. Resident are considered individuals who reside in Bulgaria longer than 183 days in any twelve-month period.

Foreigners shall be liable to taxes in respect of any income acquired thereby, only from sources inside the Republic of Bulgaria.

Terms for declaring and paying the tax:

The term for submitting the annual tax return under Art. 50 of the Law on taxes on the income of natural persons is until 30 April;
The term for payment of the tax amount declared in the annual tax return is also until 30 April.

Local Taxes and Fees Act (LTFA)

Local taxes are paid in cash at the cash departments of the municipal administration, or by non-cash payment, by means of crediting the relevant bank accounts. Local taxes cover the following main items:

real estate tax;
inheritance tax;
gift tax;
tax on onerous acquisition of property;
transport vehicle tax;
any other local taxes as determined by statute.

The Bulgarian Municipalities are collecting the following local fees:

for disposal of household waste;
for use of retail markets, wholesale markets, fairs, sidewalks, squares and street roadways;
for attendance at creches, provision of cooked take-away meals from baby-food kitchens, attendance at kindergartens, residence at public care homes, camps, dormitories, and use of other forms of municipal social services;
for quarrying;
for technical services;
for administrative services;
for lease of grave plots;
visitor (tourist) fee;
for dog ownership;
other local fees as determined by statute.

Value Added Tax Act (VATA)

Any taxable person having a taxable turnover of BGN 50,000 or more, for a period not exceeding 12 consecutive months last preceding the current month, is obligated to submit an application for registration under VATA. Any taxable person in Bulgaria has also the right to apply for Optional Registration under the conditions of this Act, (if doesn't have a turnover of BGN 50,000 or more for example).

“Credit for input tax” is the amount of tax which a registered person under this Act has the right to deduct from its liabilities. The credit for input tax becomes deductible when the tax subject to deduction becomes chargeable.

Law on Excises and Tax Warehouses (LETW)

Subject to levying with excise duty in Bulgaria are:

alcohol and alcoholic beverages;
tobacco products;
energy products;
coffee and coffee extracts;
vehicles.

Some excise goods are subject of exempt from payment of excise duty, and in some cases the paid already duty could be restored according to the provisions LETW.

Law for the Customs

Bulgarian Customs Act is generally based on the EU Customs Code. The same procedure and regimes as those of the EU are applied: release for import, transit, customs warehousing, inward processing, processing under customs control, temporary admission, outward processing, export, temporary export, etc.

A customs agent can represent importers and exporters before the customs bodies for carrying out the customs procedures. No Customs duties are charged for exported goods.

Bulgaria is a member of the World Trade Organization (WT) and follows its rules related to the determination of origin of goods.

If you want to have some more information about the customs regime in Bulgaria you can also visit the web site of Bulgarian Customs Agency.

But if you have any special interest in the above subjects, or you want to have a serious and long lasting business in Bulgaria, and you are looking for somebody to take care of these subjects and to assist you with them, please do not hesitate to contact us. Our team will be glad to help you.