Tax Returns and Compliance
Tax returns should be filed by 15th April following the tax year in question. Taxes are payable within 30 days of filing the Return.
Capital Gains Tax
Capital gains are usually taxed as income, however the following assets are exempt:
а) one immovable housing property, regardless of the date of acquisition of the
property;
b) up to two pieces of immovable property, or agricultural property and forest land plots
regardless of the number thereof, providing that the time elapsed between the date of
acquisition and the date of sale or purchase is more than 5 years,.
The income as described above is subject to a final tax amounting to 10% and it is
payable in Bulgaria.
Wealth Tax
There are no wealth taxes in Bulgaria.
Real Estate Tax
Owners of real estate in Bulgaria are liable to pay an annual tax on the value of the real estate. The rate varies depending on whether the real estate is used for residential or commercial purposes. The rate for residential property is fixed by the local authorities. For commercial buildings, the rate is 0.15%. The tax is payable at the beginning of each year. These taxes are usually up to the equivalent of €150 per year, and are lower in rural areas.
VAT
VAT is chargeable on the sale of real estate in Bulgaria at a rate of 20%. This is usually included in the purchase price of the property.
Restrictions on Foreign Ownership of Real Estate in Bulgaria
A foreign investor can invest in property in Bulgaria either directly or through a Bulgarian company. Only individuals resident in Bulgaria can acquire title to land.
Foreign residents may be required to obtain permission from the Council of Ministers in Bulgaria to buy real estate in border areas or in high security zones, as defined by the Government.
Corporate Tax
The companies are liable for this tax on their income. Since 01.01.2007, standard
corporate tax in Bulgaria is 10%
Inheritance and Gifts Tax
There are no Inheritance and Gifts Tax in Bulgaria
Social Security and Healthcare Contributions
Employees are liable to pay social security contributions at a rate of 13% and employment fund contributions at a rate of 2%. In addition, healthcare contributions are payable at a rate of 2,4%. Contributions are payable monthly and are calculated on employment income only, up to a limit of around BGN 2000 per month.
