income

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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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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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?

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Tax treatment of the funds received for the performance of a contract for management and maintenance of property

When executing a contract for property management and maintenance in Bulgaria, a question arises for the tax treatment of the funds received by the company which manages and maintains the property in connection with the contract.

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Invoicing period of company income and expenses

A situation is possible in which the activities of a Bulgarian company have been actually carried out in a previous month or accounting period, but due to the established reporting organization, invoicing has been carried out in the following month. In this case, the question arises to which period the invoiced company income and expenses refer. Continue reading “Invoicing period of company income and expenses”

Taxation of an individual upon receipt of a liquidation share in an LTD.

I. General provisions:

Each partner in a limited liability company (LLC) in Bulgaria is entitled to a liquidation share. 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 a liquidation share.

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Declaration of income received under a civil contract

When concluding a civil contract in Bulgaria, the question arises as to what tax the income received under it is taxed.

Taxable under the Personal Income Tax Act (PITА) is the income from all sources acquired by a taxable person during the tax year, except for income that is exempt from tax by law.

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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 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”