The Law Office “Ruskov and Colleagues” specializes in Bulgarian and international tax law and together with our tax advisors we can offer our clients comprehensive services in tax matters and in cases involving double taxation treaties.
Our consultations on questions of Bulgarian tax law are focused on the main types of tax obligations that apply both to persons who are resident in Bulgaria for tax purposes of the legislation and to persons who, although not within the scope of the tax residents, for tax purposes in Bulgaria, operate a business in the country through a trading company, or are active as freelancers and self-employed.
Our services in the field of tax law in Bulgaria include:
- Consultation on Bulgarian and international tax issues - on tax obligations, their amount, the possibilities of tax relief, the use of tax credits, etc.
- Representation before the tax administration;
- Contestation against tax assessments in administrative and judicial proceedings.
Together with our tax consultants, we assist our clients in all tax issues and procedures as well as in the resulting obligations.
Here is some information on the most important taxes in Bulgaria:
Value Added Tax - A 20% turnover tax is used to tax all supplies of goods and services at the place of performance in the territory of the country, with the exception of deliveries exempt from taxation. The turnover tax is introduced as an indirect consumer tax, which taxes the personal costs and indirectly the income through the taxation of the consumption. From a tax and technical point of view, VAT is a tax-exempt tax where the determination, collection and payment of tax debts are placed directly in the hands of third parties who make the exchange and who the VAT Act defines as the taxable persons. Taxable persons are persons who carry out an independent economic activity within the meaning of Article 3, Paragraph 2 of the Value-Added-Tax Act, but in order to be in control mechanism, these persons should be registered for the purposes of the VAT-Act. The turnover tax is credited several times over the total taxed value of the taxed items, whereby the tax credit mechanism only taxes the newly created value added at the respective stage of its realization. A once-off tax is included in the final price of the product.
Corporate Tax - "Corporate Tax" refers to the taxation of company profits and incomes. All companies are subject to corporation tax, which is 10%, except for those who are taxed with alternative taxes. In relation to the objects of taxation-they are derived from Article 1 in connection with Article 5 -these are the profits of companies, including the seat of economic activity of a foreign person on the territory of the country, income from Bulgaria by local and foreign legal entities expressly specified in the legislation, etc. For income from sources in the country, foreign business profits, income from transactions in financial assets, income from dividends and liquidation shares are held. The corporation tax on dividends and liquidation shares paid to legal entities is 5%, well below the tax rates of other countries.
Income tax on natural persons - these are income from wages and non-work pay and the income of sole traders. The order is in Article 12 of the Income Tax Act, which introduces the general principle. Article 10 defines the types of sources of income. The law includes income in six categories - income from employment; income from business as an individual merchant; income from other business activities; rental income or other income for the giving use rights regarding rights or property; income from the transfer of rights or property; other income expressly included in the Act as taxable income for individuals. For these categories, the tax amount is 10%, with the exception of dividends paid by commercial companies to natural persons, the tax of which is 5%. According to the origin of the income, the persons to whom the law assigns duties for the administration of the tax - its estimation, deduction and payment are regulated.