General Income Tax/Tax on the Aggregate Annual Taxable Amount

Information about what counts as annual taxable income in Bulgaria...

The aggregate annual taxable amount is determined by the sum of all the annual taxable amounts for all the incomes, acquired during the tax year, such as income from employment, income from other economic activity specified in the Income Tax on Natural Persons Act, income from rent, from transfer of rights of property and so on, without the incomes pointed in the law, which sum shall be reduced with the provided tax reliefs. And every annual taxable amount of these incomes is determined by specific rules under the provisions of the law.

The aggregate annual taxable amount is 10 percent.

Capital gains tax

According to the Bulgarian legislation there is no separate tax equivalent to the capital gains tax, existing in Anglo-Saxon tax law. The profit, made by resident individuals from sale, exchange or other transfers against payment of shares, compensation instruments, other investment assets is subject to tax but as part of the aggregate annual taxable amount.

This kind of profit is included in the aggregate annual taxable amount, and subject to 10 percent tax.

Final tax/Withholding tax

Some of the incomes from a source of Bulgaria, paid to non-resident individuals, which shall be taxed with a final tax are the following:

  • compensations for lost profit and damages of such nature
  • scholarships for study in Bulgaria and abroad
  • interest payments
  • income from rent or from other payments, received against providing a property for use
  • technical assistance fees
  • income from management and control, from participation in management and supervisory bodies of enterprises
  • income from sale, exchange of immovable properties
  • income from sale, exchange or other transfers against payment of shares
  • compensation instruments, other investment assets

The tax rate for that kind of income is 10 percent. The tax shall be withheld and paid by the enterprises which are payers of the income and this kind of tax is called as withholding tax.

Subject to final tax are also the incomes from dividends and liquidation shares, paid to a resident individual from source inside or outside Bulgaria or paid to a non-resident individual and which is from source inside Bulgaria.

The tax rate for that kind of income is 5 percent. The tax is withheld and paid by the payers of the income and this kind of taxation is called withholding tax.

Tax on Other Incomes

There are other incomes such as income from economic activity as a Sole proprietor, income from other economic activity, income of resident natural persons from rent or from other payments, received against providing a property for use, income of resident natural persons from transfer of property rights, etc. For each of these incomes there is a special regime of taxation, defined in the Income Tax on Natural Persons Act.

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