Important tax advises for people who plan to register a company in Bulgaria

Like in every other country in the world, registering a company in Bulgaria and making business here, also means paying taxes. The taxes in the country are dealt with by the National Revenue Agency. The tax system includes direct and indirect taxation, custom duties and local taxation. All companies which are registered in Bulgaria are obliged to pay corporation tax to the amount of 10 %. This tax is also applied to foreign entities that trade in the country. The companies who are not registered in Bulgaria and do not operate in the country pay just a tax on the earnings that are generated here. Corporation tax should also be paid by legal persons on profits made from rental of immovable or movable property.

The indirect taxation or the so called VAT is applied on various spheres – supply of goods and services, vehicles imported in the country, etc. When the trade is between members of the European Union, then the terms used are intra-community acquisition and intra-community supply. The VAT basic rate is 20 per cent, but it can change for certain supplies. Then come the Custom duties, which are arranged by the Excise and Bonded Warehouses Law in Bulgaria. They are applied on alcohol and tobacco products, on coffee, on electricity and cars. The date of registration under the VAT requirements is the date of the registration certificate. When a foreign entity that is not registered as a company in Bulgaria wants to enter the market, then this entity shall register under the VAT requirements. The local taxation are those taxes that are collected by the municipalities. These include the property taxes, which concern those investors that plan to buy an office in Sofia or any other country in Bulgaria, the vehicle taxes which concern the companies that plan to use cars here, charges for domestic waste, administrative and technical service, pavements, markets, child care facilities, etc. The local taxes are collected by the local authorities and differ for each region.

Companies which are registered in Bulgaria and own an office in Sofia for example, plots of land, buildings and other immovable property shall pay an annual property tax. Persons who are required to pay VAT tax include the owners of such properties, but also concessionaires. When a new property is acquired, the persons who are required to pay a tax shall also complete a declaration according to article 14 of the Law for Local Taxes and Charges. This declaration shall be presented within two months of acquisition. The companies which have been registered most probably will acquire vehicles and naturally they have to pay taxes on these vehicles. The vehicles that have to be paid taxes on are vehicles which are registered to be used on the road system of Bulgaria, as well as vessels that are registered at the Bulgarian ports and airplanes with registration at the Aircraft State Register. The vehicles bought should also be declared within a period of two months after the purchase. The vehicles taxes are established by the municipal councils and they depend on the engine and year of manufacturing.