Taxes
Income tax on enterprises – in the past, the rate of income tax was diverse according to the income of the enterprise. Entities with taxed income below 50.000 BGN were the subjects to lower rates. Bulgaria has consequently leveled and lowered the rates of income tax on enterprises. A uniform income tax rate was introduced in 2002. The CIT tax rate was decreased to the level of 10% in 2007 – it is the lowest rate in Europe.
Dividends - paid to Bulgarian private persons in the amount of 5% (reduction from 7%).
Capital profits – these are the income of the enterprise and are liable to income tax as other incomes.
Tax allowances - Bulgaria offers a number of investment inducements such as income tax allowances. These allowances encourage the investors to invest in municipalities of high unemployment rates. They include a possibility of a 100% income tax exemption and income tax exemption in the amount of 10% of the investment value.
Transfer Taxes – real estate transfer tax is paid from each real estate which is acquired by donation, as well as on any rights acquired real estates thereto,. The tax shall be paid by the transfee of the property of by the transferor in case the transfee is abroad. The tax rate is determined by the Municipal Council within 2 and 4 per cent of the assessed value of the transferred property.
Yearly real estate tax - – the real estate owners are obliged to pay the real estate tax each year in the amount of the 0.15% to 0,3% of the real estate value. The tax is determined by The Municipal Council. The tax should be paid each year to 30.04.
Tax on natural persons - From 1.1.2008 Bulgaria has a new 10% flat tax rate for individuals, replacing the 10%-24% tax rates in 2007.
It is a curiosity that some branches of small scale business activity are taxed with a lump-sum tax. Its amount is often related to the value of owned assets. For example, for hotels and motels it is a sum ‘per bed’, and for facilities offering food and / or entertainment – ‘per place’. The amount of tax on commercial activity is established on the basis of the area, type of activity and location.
The Vat tax– there are two rate of the Vat tax – a 0% rate for export [and for imported goods for re-export] and 20% rate for taxable goods and services, included those imported.]