We will continue our previous post about the withholding taxes and application of double tax treaty relief in Bulgaria. If you have missed the first part please read it here first…
Fiscal base for the withholding tax in Bulgaria:
– for tax assessment of the income from dividends is the gross amount of the dividends distributed
– for assessing the tax on the income from liquidation quotas is the difference between the market price of the sum that the respective shareholder or partner must receive, and the documentary proved price for acquiring its stocks or shares
– for assessing the withholding tax on income from interests under financial leasing contracts in cases when the contract does not stipulate the interest rate, is the market interest
– for assessing the withholding tax on income of foreign persons from financial assets disposal is the positive difference between assets’ sale price and their documentary proved price of acquiring
– for assessing the withholding tax on income of foreign persons from real estate disposal is the positive difference between the sale price and the documentary proved price of acquiring this real estate
– for assessing the withholding tax on income of foreign persons in all other cases is the gross amount of the income.
Tax rates:
– of the income tax under Art. 194 of the CITA (dividends and liquidation quotas) is 5%
– of income tax under Art. 195 of the CITA is 10%.
Declaring the tax
The persons who have deducted and paid the withholding tax and the persons who have accrued the income under Art. 12, para 3 to para 8 from the CITA, declare this circumstances before the territorial directorate of the National Revenue Agency where the person paying the income is registered or must be registered. This information is declared using a standard return. The return is filed timely for each quarter by the end of the month which follows the quarter when the tax was paid. If the payer of the income is a person, who is liable to withhold and pay the tax, the return is filed by income recipient. Upon the request of the interested person for the tax paid on income of foreign legal entities a certificate is issued based on a standard form. This certificate is issued by the territorial directorate of the National Revenue Agency where the tax must be paid.
Paying the tax
The persons who withhold the withholding tax for income on dividends and liquidation quotas must pay the taxes due as follows:
– within three months from the beginning of the month which follows the month when a decision was taken to distribute dividends or liquidation quotas – in the cases when the income recipient is a resident of a state which has concluded with the Republic of Bulgaria an enforced Double Taxation Treaty;
– by the end of the month, which follows the month when decision was taken to distribute dividends or liquidation quotas – in all other cases.
The persons, who withhold the withholding tax on all other income of foreign persons, must pay the taxes due as follows:
– within three months from the beginning of the month, which follows the month when income was accrued – in the cases when the recipient of the income is a resident of a state which has concluded with the Republic of Bulgaria a Double Taxation Treaty;
– by the end of the month which follows the month when income was accrued – in all other cases.
