Brief overview of Taxation in Bulgaria

•  Corporate Income Tax Rate – 10%.

•  Capital Gains Tax Rate – 10%

•  Capital gains derived from sale of shares through the Bulgarian Stock market or a regulated market in an EU/EEA member state – 0%

•  Tax on Dividends – 5%

•  Dividends paid to legal entities which are tax residents in an EU/EEA member state – 0%

•  Interest and Royalties – 10%

•  VAT – 20% * Refund period is 2 months under certain conditions. If your annual company turnover is less than EUR 25,000 VAT registration in Bulgaria is not mandatory

•  Personal Income Tax – 10%

•  Mandatory Social Security
  Employer: – 17.4%
  Employee: – 12.9%

•  Maximum monthly taxable base – BGN 2,600 (approx. EUR 1,350)

Bulgarian law offers one of the most liberal procedures for obtaining cargo and passenger transport license. The authority that issues the licenses is Executive Agency “Automobile Administration”. The benefits of getting a Bulgarian cargo or passenger transport license is that it is issued relatively quick (within 20 days) and almost no initial checks are done. This means that you can register a new company and get the license easily. The state & legal fees to register a company in Bulgaria and to be granted a transport license are relatively low.

Steps to obtain EU Transport license issued by the Bulgarian Automobile Administration:

1. Incorporate a Bulgarian company – using our services your company will be registered in few days only;
2. Professional Competency certificate – your company should hire a person who passed the state exam for transport company management. We can assist you to find & employ a person who holds this certificate;
3. Satisfy the financial stability requirement – your company needs to be in a good financial condition. The requirement is easily satisfied by showing in the company financial sheets possession of at least 9,000 € if you apply for one vehicle license and + 5,000 € for every other vehicle you apply for. This amount can also be available through bank guarantee or borrowed from a third party. We can advise you on the best possible way to meet the financial requirements;
4. Apply for the license;
5. Accounting services for a transport company in Bulgaria.

Our team of professionals will be glad to assist you through the entire process of obtaining an EU Transport license. The Bulgarian Transport license is valid in all other European Union member countries based on the free movement of goods and services directive.

Benefits of receiving a Bulgarian Transport license

• You pay only 10% flat rate on corporate & personal income;
• You pay only 5% dividends tax;
• Low start up fees and maintenance fees;
• Low cost Bookkeeping and Payroll service in Bulgaria;
• Validity of the transport license in all other European Union member states;
• Lowest salary on professional drivers in the EU.

Our EU Transport License package includes the following:

1. Registration of a Bulgarian EOOD company;
2. Garage Lease Agreement;
3. Maintenance Center – Car Service Station Agreement;
4. Office Lease Agreement;
5. Agreement for renting a motor vehicle (the motor vehicle must be registered with the Bulgarian authorities and not registered in another company, or it must be own vehicle;
6. A certificate of Financial Stability of the Company.

Our fee to assist you through the entire process of obtaining a EU Transport license in Bulgaria is only 3,500 €. Our fee includes the employment of a person who holds a professional competency certificate.

 

THE MOST IMPORTANT GROUNDS FOR NOT CHARGING VAT IN INVOICE

Art. 113, para. 9 of the VAT Act - the person is not registered under the VAT Act

Art. 84 and Art. 17 of the VAT Act – the place of supply of goods is outside the territory of Bulgaria in EU

Art. 21 of the VAT Act - the place of supply of the service is outside the territory of Bulgaria. The tax is payable by the recipient - service to the EU

Art. 69 para.2 and Art. 21 para 2 of the VAT Act – the place of supply of the service is outside the territory of Bulgaria. The tax is payable by the recipient - service to a third party

Art. 28 and Art. 86 - the place of supply of goods is outside the territory of Bulgaria. The tax is payable by the recipient - service to a third party

Art. 22 of the VAT Act – the place of supply of transport service is outside the territory of Bulgaria in EU

Art. 30. (1) Supply liable to tax at the zero rate is transport of goods (the transport service) to a third party

Art. 163a of the VAT Act - supply of waste; the tax is executable by the recipient

Art. 28с(Е)(3) 77/388/ЕЕС – the person is intermediary in tripartite operation; the tax is executable by the recipient

Art. 86, para. 1 of the Rules on Implementation of the VAT Act - supply of general tourist service

 

Examples of texts

The supply is not subject to VAT taxation in Bulgaria in accordance to Art. .... , para. .... and in connection with Art. .... , para. .....

VAT is payable by the recipient of the service (good)