With corporate profits tax in Bulgaria are levied on corporate entities in the exercise of their business. The tax base for determining the corporate profit tax is the tax that is determined by Bulgarian CIT Act as a positive financial result.
Corporate tax is declared by filing an annual tax statement by taxpayers or their representatives authorized by the competent territorial directorate of the National Revenue Agency (NRA).
The model declaration is approved by the Minister of Finance and published in Bulgarian State Gazette.
ANNUAL STATEMENT FOR CORPORATE TAX shall be filed at that the National Revenue Agency, to which the taxpayer is registered.
Persons liable for income tax are:
- Local entities – companies;
- Local unincorporated companies and insurance funds established pursuant to Art. 8 CSR Act;
- Foreign legal entities when conducting business in the country through a permanent establishment;
- Unincorporated foreign companies when doing business in the country through a permanent establishment
Corporate tax is not paid by those subject to alternative tax for the activity mentioned explicitly in the CIT.
These are the organizers of gambling and those operating from ships operation.
Taxable persons who are subject to corporate tax, and accordingly submit an annual tax declaration are local entities and foreign entities doing business in Bulgaria through a permanent establishment.
To these two categories should be added and unincorporated associations and insurance funds, which art. 2, para. 2 CIT creates a legal fiction, they are treated as legal persons, although they are not separate entities.
The provisions of CITA are defined and the concepts of local and foreign persons. According to Art. 3 CITA, local entities are:
- Legal entities established under Bulgarian law, ie registered in Bulgaria;
- Companies incorporated under Council Regulation (EC) ? 2157/2001 of the Council concerning the European companies created under the regulation, and cooperatives established under Regulation (EC) ? 1435/2003 of the Council, where their headquarters is in the country and entered in the Bulgarian register.
Foreign legal persons of the opposite argument are those who are not local.
The importance of the division, as well as other tax laws related to the fact that local entities are subject to an annual tax on the profits from all sources in Bulgaria and abroad – ie they act the principle of taxing worldwide income, while foreign entities are taxed only on profits earned through a permanent establishment in Bulgaria.
The tax period for determining the corporate income tax, according to Art. 21 CIT is the calendar year, and for newly established taxable persons, the tax period covers the period from the date of their establishment until the end of the year.
Rate of corporation tax is 10 percent according to Art. 20 CIT. The specific amount determined by multiplying the tax base the tax rate.
The declaration shall be filed:
- In the office of the NRA for registration;
- By registered mail;
- Electronically via electronic signature
Taxpayers under CITA submit their statement within the order CITA along with necessary documents.
When these obligations, they are administrative prosecution. A person who fails to state or misstates any particulars or circumstances in the tax return, do not submit or not submit it on time, and these circumstances lead to the determination of tax due to a smaller size or exemption, suffer a penalty. It is double the amount for repeated breaches of legal rules. Administrative and criminal responsibility of the person who does not submit an annual declaration to the application.