A situation is possible in which a company registered in Bulgaria under the Value Added Tax Act (VAT Act) has no activity, but plans to purchase an apartment under construction with payments in several stages, which will be recorded as its asset. If the company intends to acquire the apartment in order to provide services of providing overnight stays and accommodation in the apartment for a fee (taxable supplies within the meaning of the VAT Act), the following questions arise:
Receiving a salary only from an additional employer – obligation to declare
When a person is employed under an employment relationship by two separate employers, it is possible for the same person to work only with the additional employer and to receive a monthly salary only by him, on which tax and mandatory social security contributions should be withheld.
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Taxable income of an individual upon sale of a car purchased from abroad
A common situation is the purchase by an individual of a car from abroad, which is subsequently imported into Bulgaria for the purpose of being sold.
In this situation, it is important to be correctly determined: what is the date of acquisition of the car; what is included in the sale price in case the purchased car is sold; should the acquisition price include in addition to its invoiced value the paid transportation costs, duties, fees and value added tax (VAT) upon its import.
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Acquisition of shares by employees of a joint-stock company for achieved results through a donation agreement with the majority shareholder
One of the possible ways for employees of a joint-stock company to acquire shares is through a donation contract concluded between the relevant employees and the majority shareholder – a commercial company. Under the donation contract, the majority shareholder transfers, free of charge, from the block of shares held by him in the joint-stock company a corresponding number of shares to certain employees. The employer company (the joint-stock company) is not a party to the aforementioned contracts, as the donation of shares for the benefit of employees is carried out by the majority shareholder at his expense and for achieved results.
Restriction on cash payment upon dividend distribution
How should the concepts of “distributed dividend” and “paid dividend” be distinguished, and more specifically, does a decision of the General Meeting to pay a dividend in the amount of over 1000 BGN /or its equivalent in euros/ and a paid dividend in the amount of less than 1000 BGN /or its equivalent in euros/ contradict the provisions of the Cash Payments Restriction Act?
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Right to deduct a tax credit for supplies with a place of performance outside the territory of the country
The conditions and procedure for exercising the right to deduct a tax credit are regulated in the Value Added Tax Act (VAT Act).
A registered person is entitled to a tax credit for the tax due from him for: goods or services received by him under a taxable supply; a payment made by him before the occurrence of a taxable event for a taxable supply; an import made by him; the tax due from him as a payer.
Place of business activity of a Bulgarian company in another country
In view of the territorial scope of Bulgarian legislation, when examining the presence of a place of business activity outside the territory of Bulgaria, it is necessary to be taken into account the definition of this concept, which is contained in the agreements for the avoidance of double taxation between Bulgaria and the relevant country.
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Tax treatment in Bulgaria of a Bulgarian company operating in another EU member state
It often happens that a Bulgarian company with a VAT registration in Bulgaria also operates in another EU member state and has a VAT number from that country. If the company pays a value added tax (VAT) and a corporate tax in this country, a number of questions arise related to its tax treatment in Bulgaria:
– should invoices issued by the foreign VAT number be reflected in the financial statements under Bulgarian accounting legislation?
– should income and expenses related to activities in another EU member state be reflected in the annual tax return for corporate tax due?
Tax treatment of supplies related to land and independent units in buildings under the Value Added Tax Act
In the case of supplies related to land or independent objects in buildings, the question arises of their taxability under the Value Added Tax Act (VAT Act).
Tax treatment of shares transferred by donation in Ltd.
A situation is possible where company shares of the capital of a limited liability company (LLC, Ltd.) have been transferred from one partner to another not with the usual purchase and sale contract, but with a donation contract. Accordingly, in this situation, the question arises whether the company shares as an object of donation are subject to taxation according to the Bulgarian legislation.
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