Bulgaria

Taxation of an individual upon receipt of a dividend in an LTD.

I. General provisions:

Each partner in a limited liability company (LLC) in Bulgaria has the right to participate in the distribution of the company’s profit. Each partner has a partnership share of the company’s property, the amount of which is determined according to his share in the capital. The share in the capital determines the property rights of the partners, one of which is the right to part of the profit (dividend right).

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Tax treatment of services provided by a branch of a foreign trader located in another EU member state to Bulgarian branch of this trader

The registration of a branch of a foreign merchant in Bulgaria does not lead to the creation of a new legal entity, but only to a territorially and organizationally separated part of it.

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Deduction of tax credit for expenses for travel and business trips of the managers of a foreign company, incurred in connection with the activity of its branch in Bulgaria

When registering a branch of a foreign trader in Bulgaria, a question arises whether the expenses for travel and business trips of the managers of the foreign trader, which are reported in Bulgaria, are subject to tax credit deduction.

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Place of reporting of expenses for travel and business trips of managers of a foreign company, made in connection with the activity of its branch in Bulgaria

When registering a branch of a foreign merchant in Bulgaria, the question arises in which country should the expenses for travel and business trips of the managers of the foreign merchant be accounted for.

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Tax treatment of the income realized remotely from Bulgaria by a natural person working for a foreign company located in another country

In the conditions of a changeable situation, some of the companies manage to adapt by implementing their commercial activity through remote work of their employees. A situation often arises when a person hired on work abroad has to perform his duties remotely from the territory of another country. Until one moment this person has paid taxes in the country where the company has its registered office, and subsequently, after beginning the remote performance of his duties in another country, the question arises about the tax treatment of the income realized through remote work.

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Branch of a foreign trader in Bulgaria

I. General provisions

In view of the tax advantages that Bulgaria provides for foreign investors, and taking into account the country’s membership in the European Union, one of the often preferred forms of commercial activity in Bulgaria by traders from other countries is the establishment of a branch of a foreign trader.

The registration of a branch of a foreign trader in Bulgaria does not lead to the creation of a new legal entity, but only to a territorially and organizationally separated part of it. The branch has its headquarters, object of activity, a person who manages it, workers, etc. However, the branch does not own separate property other than that of its principal. Continue reading “Branch of a foreign trader in Bulgaria”

Declaring an asset sold by a non-trading company

In the situation of a sale of a company asset (e.g. a car) in a reporting period during which no commercial activity has been carried out in Bulgaria by a company, the question arises whether this company can be defined as a person that has not carried out activity within the meaning of the Law on accounting and whether it should declare the amount of the sale of the asset.

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Insurance of self-insured persons

The obligation for insurance of self-insured persons in Bulgaria arises from the day of commencement or resumption of employment activity and continue until its interruption or termination. Upon commencement, interruption, resumption or termination of any employment activity, the self-insured person submits a declaration according to a sample.

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Tax treatment under the Corporate Income Tax Act in case of transfer of fixed assets to a place of business in Bulgaria

Foreign legal entities that carry out economic activity in Bulgaria through a place of economic activity, dispose of property in such a place of economic activity or receive income from a source in Bulgaria are taxable persons under the Corporate Income Tax Act and should form a tax financial result.

From 01.01.2020 in Bulgaria the rules for tax regulation are applied in case of transfers between a part of one enterprise located in the country and another part of the same enterprise located outside the country, which rules have been introduced in connection with the application of Directive (EU) 2016/1164 of the Council of 12 July 2016 laying down rules against tax avoidance practices which directly affect the functioning of the internal market (Directive 2016/1164).

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Change in the applications for granting extended and permanent residence permits in Bulgaria

A new application form has been introduced for the following types of permits for extended residence in Bulgaria:
– a permit for extended residence and work type “Single permit for residence and work”;
– an extended residence permit for employment as a seasonal worker;
– a permit for extended residence and work type “EU Blue Card” for the purposes of highly qualified employment;
– an extended residence and work permit type “EU Blue Card” for the purposes of highly skilled employment of an EU Blue Card holder, issued by another Member State of the European Union, when the person has been residing in the territory of that Member State for 18 months and of the members of his family;
– a permission for a person transferred during an intra-corporate transfer;
– a mobility permit for an intra-corporate transfer.

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