The Tax System In Bulgaria – Brief Description – Part I
The Tax System In Bulgaria – Brief Description – Part II

Under the regulation of this law are individuals – resident or non-residents, local or foreign citizens. The following incomes are not under the regulation by this law:
• Dividends received from shares or as shareholders;
• Interest received from bank deposits and loans given to companies;
• Profit of selling 1 property no matter of the moment of acquisition;
• Profit of selling 2 properties (lands or buildings) if the they were owned for more than 5 years;
• Profit of selling transport machines (cars, busses, air planes, yachts) if they were bought more that 1 year before the sale;
• Pensions and all other state social payments;
• Profit of trade with shares;
• Incomes from business trips;
• Incomes from agriculture activity, also renting agriculture land
The rest of the incomes are under this law. The tax rate is again flat – 10%
The individuals are obliged to submit annual declaration till 30th of April for the incomes received in the previous year. The declaration is not needed to be submitted if the person has no incomes, or has only incomes from labor contracts, or has incomes stated as free of taxation.
Object of the municipality taxation are companies and individuals who own properties, who are trading with properties or other activities related with properties situated at the regions of the municipalities. For the purposes of the municipal taxation each property has evaluation (called “tax evaluation”) based on which the taxes are defined. The evaluation is done by the rules of each municipality and is not related to the market price of the property. Such taxes are:
• “Garbage” tax – flat rate of between 0.03% and 0.10 % of the “tax evaluation”. Paid annually.
• “Property tax” – flat rate of between 0.02% and 0.05% of the “tax evaluation”. Paid annually.
• “State tax” – flat rate of 2% of the tax evaluation. Paid in case of acquiring property. Paid at the notary. From 1st of January 2008 each municipality is defining its own percentage.
• Fees – municipalities charge issuing variety of documents. Such as: building permit, permission of use, other building certificates, documents related with properties – “tax evaluations”, certificates for ownership etc.