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Corporate tax

Tax rate for resident companies


Tax rate on long-term capital gains Capital gains tax rate is 15%.
System governing groups of companies and dividends paid by subsidiaries to their parent companies Unless otherwise specified in a fiscal agreement, dividends are generally withheld at a rate of 15%.
Tax rate on branches Branches and subsidiaries are taxed at the same income tax rate as Bulgarian corporations: 15%.

Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year
Income tax rate Tax Schedule 2003 (in levas):
0 to 1,320 BGL0%
1,320 to 1,800 BGL 15%
1,800 to 3,000 BGL 22%
3,000 to 7,200 BGL 26%
Beyond 7,200 BGL 29%
Tax deductions or other allowances There are several types of reductions or dejections applying in Bulgaria, For example, donations are deductible up to 5%,

VAT rates

Standard rates 20%
Reduced rates A 7% rate applies for exported goods and services.

Other important taxes

Name of tax
Tax on welfare expenditures  
Tax on representation expenses, donations and sponsoring  
Land taxes  
A basic tax of 1,5%  



Accounting as in all former soviet countries, arises from the Ministry of Finance and undergoes a big influence on behalf of the government.

General accounting principles
The balance sheet is presented into accounts with liabilities composed of constant capital and debts, because there is a distinction between long and short-term debts.
The profit and loss account gives priority to the repository of the global production and leave the choice of the costs classification either by nature or by function.

Obligations and publications
Companies have to publish a balance sheet, a profit and loss account and an appendix.

Certification and auditing
The external control of accounts must be confided to a body of experts (auditors) chosen by the company.

Professionals and representative organizations
Accountants associations have some difficulties to get organized, because of the importance of the State in the accounting system.

Useful links
For further information, please check the "Business Legislation" chapter of the Bulgarian Foreign Investment Agency.

Last modified in 2006 - ongoing update
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