As non-resident individual in Bulgaria, do I need to file a Bulgarian tax return?
According Bulgarian tax legislation,
non-residents property owners shall file a withholding Bulgarian income tax
return. There are two scenarios available:
- Where tenant is a company; In
this case the tenant (company) is obliged to file a Bulgarian income tax return
on your behalf and pay any taxes due. Any taxes falling due are typically
deducted form rents received.
-
Where tenant is an individual; tenant
(individual) has an obligation to file a Bulgarian income tax return.
Do I have to apply for a Bulgarian tax number if I own a property in Bulgaria?
Non-resident property owners who
do not have Bulgarian Personal Identification Number (PIN) or Bulgarian Personal Foreigner's Number (PFN)are obliged to register in the BULSTAT Register to get an Identification code within 7 days of
purchasing the property. Individuals are issued a Registration certificate.
Are there any restrictions for purchase of property in Bulgaria?
Non-resident individuals can not purchase land in Bulgaria. Only the purchase of
buildings by non-residents is permissible under Bulgarian law. To purchase Bulgarian
land, non-residents must establish a Bulgarian company through which the land
is purchased.
Do I have to set up a Bulgarian company to purchase property?
A
Bulgarian company is required to purchase land but not buildings; you can own
an apartment in your own name but you would be required to purchase a
free-standing property with land through a company as non-residents are not
legally eligible to purchase land.
What Bulgarian taxes do I have to pay when purchasing a property in Bulgaria?
There are several
Bulgarian transfer taxes and fees, you need to pay when purchasing property in Bulgaria:
- Bulgarian local
tax / transfer tax – 2% of the purchase price
- Bulgarian state
entry fee – 0.1% of the purchase price
- Bulgarian VAT
– calculated at 20% of the purchase price. Bulgarian VAT applies when you purchase a property from a company that is
registered for VAT.
What are the rates of Bulgarian local property taxes?
Bulgarian local
property taxes vary per location. Inhabited house duty
is calculated @ 0.16% of the Tax evaluation of the property (defined each year)
and a Waste Collection Duty applies; it differs from municipality and property
location. In general it varies from 0.20% to 0.80% of the property’s tax
evaluation value.
Are there tax deductions in Bulgaria?
No, there are no tax
deductions allowable against Bulgarian rental income. Bulgarian income tax is
calculated on gross income.
What is the deadline for Bulgarian income tax filing?
The Bulgarian income
tax return are filed on quarterly basis. The deadline is the 15th of
the month, following relevant quarter. No annual tax return required.
Am I obligated to file Bulgarian tax return after a sale of Bulgarian property?
When
you sell your property, Bulgarian Capital Gains Tax (CGT) at 10% is payable on
any increase in value since acquisition. Bulgarian CGT is calculated on the difference between the sales price and the
higher of the tax estimation and the price of acquisition (per Notary Deeds), corrected
by the inflation index.
Am I obligated to declare my Bulgarian income in my resident tax return?
In general you are obliged to declare your
worldwide income in your annual resident return. If resident in the UK or Ireland you have an obligation to
declare any worldwide income in your resident tax return. There is a double
taxation agreement between Bulgaria,
Ireland and the UK so
double taxation relief applies in some cases.
If I pay tax in Bulgaria will I also have to pay tax in my resident country?
If a double tax treaty exists between Bulgaria and
your home country you may get a credit for taxes paid in one country against
what taxes are due in your home country on the same income. Ultimately you
should not end up paying tax twice on the same income. There is a double
taxation agreement between Bulgaria,
Ireland and the UK so
double taxation relief applies in respect of income tax and CGT.
