Delchev & Partners

Until now the deadline for withholding and payment of the tax ran from the beginning of the month following the month in which the income was accrued and its duration depended on whether the recipient of the income is a tax resident of a state which is a party to a Convention for avoidance of double taxation concluded with Bulgaria.  In case that a Convention is in place, the time limit was 3 months following the accrual of the income. In the absence of a Convention the time limit for payment of the tax was the end of the month following the month of income accrual.

Following the changes to the Act the tax shall be paid by the payer of the income by the end of the month following the quarter of income accrual, or respectively during which the resolution for dividends distribution has been taken.

Practically, as of 1 January 2013 one and the same time limits for payment of the WHT shall be observed regardless of the presence or absence of a Convention concluded between Bulgaria and respective the state of tax residence of the recipient.  It seems that the changes to the time limits aim at decreasing the administrative burdens for the tax payers.

What is more important, however, the introduction of one applicable time limit for payment of the tax actually shortens the period within which the taxable persons should pay and file a return for the withheld taxes.

(iv) Filing Requirements  

The amended provisions of the PIT Act determine a common filing requirement for submission of a declaration about paid taxes by the payer of the income within the time limits for payment of the respective taxes.  Thus a unified time limit for reporting and payment of the withholding tax is introduced.  Pursuant to the amendments, in force as of 1 January 2013, all payers of incomes subject to withholding tax should declare the withheld and paid tax also by the end of the month following the quarter of income accrual.