Information

Taxes

Tax is paid on all property except on forests and agricultural land. The property owners in two month term from the date of the purchase / transfer of the ownership rights or the completion of the construction – are obliged to declare the property with the tax authorities. The declaration includes a detailed description of the property: year of construction, construction materials, specific construction elements, area, floor, purchase price, etc.

The tax base for legal entities represents the book value, for an individual – the price of the property assessed by the relevant tax authorities. The tax rate is the same for both legal entities and individuals and represents 0,15%. For instance – on a real estate with tax value of 30 000 BGN. The tax assessed will be: 30 000:100x0,15=45 BGN. The tax on the main residence of an individual is deducted by 50%. The main residence is the property where the owner and the members of his family reside the greater part of the year. The tax is paid in 4 equal instalments by March 31, June 30, September 30 and November 30. Companies and individuals who have paid the full tax by March 31 benefit a discount of 5% of the tax amount.

Household waste fee (tax)

It is determined by the local authorities.
On residential – proportionately on the book value or according to the waste quantity. On other property – depending on the type and quantity of the of the containers for the waste. In case that for each separate building is impossible to determine the type and the number of the containers, the fee shall be determined proportionately on the book value of the property. It is paid together with the property tax. The fee is equal for both legal entities and individuals. The fee base for an individual property is calculated on the value determined for the property tax.
By the end of each January the owner shall receive notification from the tax authorities on the amounts of the property tax and the household waste fee due. The notification include data and amount assessments that can be verified by each owner.

The amount of the fee for some major cities:

Varna - 0,20%
Plovdiv - 0,21%
Burgas - 0,17%
Sofia - 0,245%+5 BGN

Payment of a maintenance and service fee

In new-built resorts there is a fee for maintenance and service, which includes security, cleaning, maintenance of the green areas and pool areas, etc.

Other taxes and fees

VAT (value added tax)

Rate – 20%. Companies with turnover more than 50 000 BGN for the last 12 months are obliged to pay and to be registered by the tax authorities under the Law on VAT.

Profit tax

Companies that do not pay patent law are obliged to pay to the republican budget 10% rate on their profit.

The taxis paid in advance feach month by the 15^th and amount ot 1/12 from the profit for the previous year. At the end of the year corrections are performed according to the actual financial result:

if the profit surpasses the one from the previous year – the balance shall be paid;
if the the profit is less than the previous year, the amounts deposited more than due, shall be deducted from future payments with interest accrued determined by the National Bank.

Newly registered companies or companies with losses for the previous year, pay monthly based of the actual profit from the previous month. This is an estimated amount at some extent, that is why at the end of the year it is corrected. 1/12 is also corrected according to the inflation.

Duties and fees

Duties are paid on goods and service that are produced in the country in accordance with a list and on some imported goods. The producers and importers of such goods are obliged in 14-days term from the the beginning of their activity to be registered by the tax authorities.

The indirect tax is paid two times monthly: by the 28^th the amount of the duty due for the first half of the month, and by the 14^th next month – the remaining amount for the previous month. The duty for some of the goods and service is: alcohol - 0,05 BGN/degree, - beer - 0,055 - 0,085 BGN/l., - coffee and tea - 30%, - imported vehicles with engine power from 120 to 150 kwt – 35 BGN/kwt, more than 150 kwt - 50 BGN/kwt - fuel - 400 - 600 BGN/ton depending on the octan number.

Motor Vehicle Tax

With thistax are levied:
1. vehicles registered for movement on the road network of the Republic of Bulgaria;
2. the ships entered into the registers of the Bulgarian ports;
3. the aviation means entered into the state register of the Republic of Bulgaria for civil aviation means.

The tax is paid by the owners of the vehicles.

The amount of the tax depends on the horsepower of the engines and the year of manufacture:

up to 50 h.p. - 0,25 BGN per 1 h.p.
50 - 75 h.p. - 0,30 BGN per 1 h.p.
75 - 100 h.p. - 0,40 BGN per 1 h.p.
100 - 150 h.p. - 0,80 BGN per 1 h.p.
above 150 h.p. - 0,90 BGN per 1 h.p.

The resultant amount is multiplied by a factor:

manufactured before 31.12.1988 г. - 1
manufactured from 01.01.1989 to 31.12.1994 г. - 1,5
manufactured from 01.01.1995 г. - 2,8.

The vehicles with engine power less than 100 h.p. and with catalysator the tax is deducted by 50%.

For buses and trucks with “eco-engines” complying with the standards "Euro - II" и "Euro - III" the tax is deducted with 50%.

For instance: motor vehicle with engine power 80 h.p. manufactured in 1997 and with catalysator. The tax will be 0,40x80x2,8x0,5=44,80 BGN. The tax is paid in two equal instalments as follows: first - by 31 March, second - by 30 September. If the tax is paid in one amount within the first period the tax is deducted by 5%.

Social and Health Insurance

For normal labor conditions the rate for the social insurance are as follows: pension fund, temporary incapacity for work, maternity, working accident and unemployment - 36,7% for the born before 31.12.1959 г., 33,7% for born before 01.01.1960 г. For the latter the 3% difference goes to a universal pension fund; health fund - 6%. Overall - 42,7%. The payment is borne both from the employee and the employer in the following proportions:

2002 75:25
2003 75:25
2004 75:25
2005 70:30
2006 65:35
2007 60:40

The self-insured (owners of companies, entrepreneurs) are obliged to pay from their salary an amount not less than 200 BGN. For all other employed categories there is an established minimum base salary to assess the insurance instalments. It depends from the companies’ activity.
For instance, for hotels and restaurants the minimum base salary is: for unqualified worker - 130 BGN, specialists - 170 BGN, managers - 210 BGN. In commerce: sellers - 150 BGN, specialists - 265 BGN, managers - 435 BGN.

The actual paid salary could be as well lower than the base.

Foreigners when buying property in Bulgaria should in 7-day term from the signing of the title to register the property under BULSTAT. Without its registration it is not possible to declare the purchase to the tax authorities which would lead to sanctions and fines. The registration could be performed in person by the foreigner or by a third person with power of attorney. It is advisable to prepare and certify the power of attorney earlier, for instance together with the signing of the title deed in front of the notary.

For the first time with the payment of fees and taxes due to the state treasury you will confront at the stage of the transfer of the ownership rights.

Upon the signing of the deal, as a rule of thumb, two figures are present – the tax valuation of the property (if the seller is a individual) or the book value (if the seller is a legal entity), meaning the price indicated in the purchase documents, and the actual price that is paid.
The price in the title deed is regarded as a base for the property tax, the household waste fee and the notary fee. The registration fee amounts to 2%, the payment of the notary services related to the purchase and registration - 0,2%.

Please note: If you would like to re-sell the property the seller is obliged to pay income tax of 10% from the price indicated in the title deed.