Tax advice

Delchev & Partners’ lawyers provide competent and professional advice on any tax issue including:

Corporate income tax

Bulgarian corporate income tax is calculated on the basis on the company’s accounting result adjusted for tax purposes. International accounting standards are mandatory for all Bulgarian companies. Bulgarian Corporate Income Tax Act is aligned with the EU rules of Parent-Subsidiary Directive, Interest and Royalties Directive, Mergers Directive and EU legislation on state aid.

Withholding tax

Bulgarian withholding taxation arises upon payment of certain cross-border income by a Bulgarian company to a foreign beneficiary including payment of dividends, royalties, interest, technical services fees, capital gains, etc. Bulgaria has developed a broad network of double tax treaties under which domestic withholding tax could be minimized or eliminated. The withholding tax in Bulgaria is often overlooked by investors, which may create serious taxation issues.

Local taxes and fees

Local taxes are payable on ownership or transfer of ownership of real estate and vehicles or upon donation. Among the most important local fees for businesses is the local waste disposal fee.

VAT

Bulgaria introduced VAT in 1994. Presently VAT is based on the Value Added Tax Act in effect from 1 January 2007 which transposed the rules of Sixth VAT Directive (now recast under EC Directive 112/2006).

Personal income tax

The modern Bulgarian personal income taxation was introduced by the Personal Income Tax Act effective from 1 January 2007. Bulgaria has also recently adopted a flat personal income tax rate of 10%.

Excise duties

Bulgarian excise legislation is harmonized with EU rules regarding production, holding and movement of alcohol, tobacco and energy products, including in terms of excise-duty suspension arrangements. The Bulgarian excise duties on coffee and motor vehicles have been recently abolished.

Social security

Social security and health insurance contributions are payable on remuneration of employed and self-employed persons. Bulgarian social security legislation is harmonized with EU provisions on coordination of social security schemes.

Tax advice for M&A

Mergers & Acquisitions are practically the most difficult of all transactions in terms of taxation as they usually “conceal” in an intricate way very complex tax issues scarcely regulated by the Bulgarian domestic law yet. On the other hand, Mergers & Acquisitions present real opportunities for tax planning. Trust our expertise and you will see the tax implications of your merger in a different way.

Tax advice for real estate transactions

Our expertise in real estate and taxation practice areas inBulgaria and the joined efforts of our real estate and taxation lawyers makes us unique when planning our clients’ real estate transactions. We seek to provide advice and assistance in all taxation aspects of a real estate transaction in Bulgaria and support our clients in all stages of the deal.