Bulgaria: Tax Update 2018

27. February 2018

Amendments to the Tax Insurance Procedure Code (TIPC) – Country-by-Country Report

In particular those amendments of the TIPC which were made public in August 2017 create new rules regarding the automatic exchange of information between countries in which the multinational companies (MNE) are active. This information includes data for the classification of incomes, profits, assets and the taxes paid in each country. Basically the Country-by-Country Report is to be submitted in the state of that company which prepares the the consolidated financial statements of the group. This report is subsequently to be exchanged with those countries in which the group has its affiliate companies. The reporting obligation affects those companies whose turnover in the fiscal year exceeds EUR 50 million or EUR 750 million respectively, if the parent company is not located in Bulgaria.

The company located in Bulgaria has to notify the NRA of its status as ultimate parent company, substitute of the ultimate parent company and/or group company, as well as to provide information about the entity that is submitting the Country-by-Country Report, including the tax jurisdiction in which that entity is located. The notification to the tax authorities has to be made no later than the last day of the MNE’s fiscal year. The notification for 2016 has, however, to be filed no later than 31.12.2017

New deadline for compulsory VAT registration

The deadline for compulsory VAT registration on the basis of taxable turnover of BGN 50,000 or higher has been reduced from 14 to 7 days. This time frame begins at the end of the tax period in which the threshold was exceeded. If this threshold value has already been reached after less than 2 months, then the VAT registration is necessary within 7 days of reaching the threshold value. If no registration takes place within the specified time frame, the tax payer is nevertheless liable for the VAT on the turnover that exceeds this threshold value. This applies also for supplies subject to reverse charge in Bulgaria. Consortiums are obliged to register for VAT within 7 days of legally establishing the partnership, providing that at least one of the partners is registered for VAT.

New simplified procedure for initial VAT registration

The amended VAT Act provides the tax payers with the possibility of registering for VAT voluntarily upon initial registration in the Trade Register. The option will be available for online registrations. Additionally the online system will be improved so that the necessary documents for the registration can be attached online. The option shall be available as of 01.01.2019.

Corporate Income Tax Act

As of 01.01.2018 the only option for filing corporate tax returns will be electronically (i.e. online). In addition, tax payers who do not practise any business activity during the fiscal year are released from the obligation to file an annual tax return.

Minimum salary and maximum social insurance base

As of 01.01.2018 the minimum monthly salary will be BGN 510 (EUR 261). The maximum social insurance base remains unchanged at BGN 2,600 (EUR 1,329) monthly.

bulgaria tax, tax rate bulgaria, tax bulgaria 2018

TPA offers an overview of the most important tax innovations in the following CEE and SEE countries in which we operate: Austria, Albania, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia. Investing in CEE/SEE

TPA Newsletter 3/2018: Investing In
Contact our experts