Annual Tax and duties:
Corporations: 10% on profit; 5% dividend tax.
Ordinary Tax Base, World-wide, Local:
Persons, including corporations, partnerships and bodies of persons carrying on any business, trade or profession in Bulgaria are subject to tax on profit. The sale of capital assets is subject to tax. Bulgarian companies which derive profit from foreign transactions are not exempt from the requirement to provide information on these transactions and pay the tax thereon.
Dividends are taxed after distributing dividends among the partners.
Exemption from VAT:
Value Added Tax (20%) is returned for consumer goods and services purchased on the company’s account, when they are used for the company’s activities – such as computers, laptops, production
chines, utilities etc.
Withholding tax on interest:
No withholding tax on interest.
Tax on dividends:
5% Dividend tax is paid to the state just before the payment of dividends.
Tax residence certificate:
“Certificate for local entity” is issued to the entity to confirm its local status and to be presented before other jurisdictions for the purposes of tax relief.
Period of Taxation:
Calendar year, from 1st January to 31stDecember of the same year.
Deadline for payment of corporate tax:
The deadline for payment of corporate tax is one month after the deadline for filing the Annual Return.
Advance Corporate Tax payments may be made by companies whose annual turnover exceeded 300 000 Lev (150 000 EUR) during the previous year, and by companies in the year of their incorporation.
The current (2016) VAT rate is 20% for all economic activities, except hotel services, gambling, education and healthcare-related services, and any activity for which a Tax Credit has been used in another jurisdiction.
Double Taxation Treaties
Double taxation relief is available for 68 territories with which the Republic of Bulgaria has signed treaties for the avoidance of double taxation.