Our skill set covers all areas of work from Electrics to Bathrooms and roof repairs. You must do it if you are freelancer or work both like employee and freelancer. We offer services to acquire and conclude your tax bill for you for an administrative charge of 50 Euros + the tax … m area they are 30 in total. Fraud A non-Bulgarian resident can (i) become professionally active in Bulgaria and (ii) receive a (high) salary from a Bulgarian company as a compensation for these activities. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. Bulgarian residents in the US: Bulgarian citizens working in the United States must comply with the appropriate visa requirements, labour and tax laws. This salary constitutes a tax deductible cost for the Bulgarian company and the receiving individual pays 10% Bulgarian personal income tax on that income in Bulgaria. Rental income or income from disposal of real estate property located in Bulgaria is considered Bulgarian-source income. These have no reason to be expensive whilst still effective. There is a double taxation agreement between the Bulgaria and Ireland / the UK so relief for certain Bulgarian taxes will be given against Irish/ UK taxes payable on your Bulgarian income. These have no reason to be expensive whilst still effective. There is an inheritance and gift tax of between 0.4% and 6.6%, depending on the relationship of the beneficiary. Property Tax. The tax amount varies from 0.10% to 0.15% of the tax evaluation price of the property. But a longer holding period often results in no capital gains tax being payable. Moreover it will make owners of small plots sell or re-allot with others. You submit a standard form along with a copy of your notary deed. The value of deceased’s property is defined in the local currency, Bulgarian Leva (BGN), in the following manner: Option one above is valid only if an apartment or a house is bought without the land. The governing legislation in Bulgaria regulating the legal aspects of the subject is the Bulgarian Inheritance Act (Bulgarian: Закон за наследството). Otherwise you will be charged with a penalty fee. V. Inheritance tax Property inherited by a spouse or heirs of a direct line is tax exempt. It includes a 0.15% Inhabited house duty and a 0.16% Waste Collection duty. Corporation tax has been cut several times in the past few years by the Bulgarian government to encourage inward investment and now stands at 15 per cent. Bulgarian Property Taxes. You reside in Bulgaria for not less than 183 days annually or 2. The Bulgarian Constitution does not allow foreign individuals to acquire land until 2012. To get around this investors wanting to buy a house or villa must first set up a Bulgarian registered company. Inheritance Inheritance of direct descendants is not taxed. The income tax is regulated by the Bulgarian personal income tax law. Explanation and practical tips. On local level property taxes as well as various fees are collected. m area they are 30 in total. Change in any of those parameters leads to change in the tax evaluation price. Employment income earned in Bulgaria is also subject to various social security insurance contributions. The most common mistakes made when buying a property in Bulgaria can be summarized as: Paying a deposit to reserve a property. For a flat in a quarter in Bourgas with 45 sq. The withholding tax regime is regulated in Articles 194-203 of the Corporate Income Tax Act. If you buy a property with land in Bulgaria, you must form a limited company and pay corporation tax. Bulgarian taxable persons are obliged to keep a special register of their CFCs, containing a list of information as laid down in the legislation. 1. The withholding tax is levied on the gross amount of the rental income and no expenses can be deducted. Property tax covers the cost of registering the title deeds with the municipality and is equal to 0.15 per cent of the purchase price. Bulgarian residents are subject to tax on their income from sources in Bulgaria and abroad (including the business as a sole trader) and the incomes of foreign individuals are taxed only if they are acquired from sources in Bulgaria. It’s a practice worldwide this basis to be as close to the market value as possible. The real estate market in Bulgaria in the current 2019 has been really dynamic. Properties that sold for €80,000 10 years ago are widely available now for €25,000. The flipside is that Bulgarian property is now remarkably affordable and probably appropriately priced. If the rent is payable to a non-Bulgarian tax resident, a 15% withholding tax is levied. The tax legislation in Bulgaria includes the principles of establishment and functioning of the tax system. Bulgaria applies a worldwide income tax system and residents are taxable on their worldwide income. Notary Public’s Fees. Invest in property which he purchases as an individual. If the rent is payable to a non-Bulgarian tax resident, a 15% withholding tax is levied. For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR. Selling your Bulgarian property Selling your house, land or apartment is a very important action, particularly if it is owned by a domestic registered limited liability company in your name. Ongoing property taxes: Bulgarian Income Tax: For non-resident individuals, the applicable tax on rental income will depend on whether the tenant is an individual or a company. Changes in the law are vividly discussed in order to have small taxes on agricultural land but still nothing is publicly accepted. For a solid house, 90 sq.m area in the Super Center Zone in Bourgas the annual real property tax is around 55 BGN and the waste collection fee is 60 BGN. Properties that sold for €80,000 10 years ago are widely available now for €25,000. According to the Bulgarian legislation you can claim Bulgarian tax residency if 1. The buying process varies in Bulgaria depending on whether you buy an apartment or a landed property. It shouldn't be a lot of money, and would certainly amount to far less than the tax for a similar property in Western Europe or the British Isles. The tax evaluation price is calculated with a formula that includes a basis tax value per sq m and correctional coefficients for location, quality of infrastructure, individual characteristic, height and age of the property. The taxable base for Bulgarian inheritance tax is equal to the value of the inherited property (e.g., an apartment, shares of a company, and a car). Bulgarian Transfer Fees. You are considered tax resident in Bulgaria if you spend at least 183 days there per year or if your. You are considered tax resident in Bulgaria if you spend at least 183 days there per year or if your main resident home is located in Bulgaria. It provides some information on its website in English. Double Tax Treaties generally do not provide relief for this tax. Once you have accepted an offer for your property and a deposit has been collected the conveyancing procedure must get underway. If the tenant is a Bulgarian company, the tenant w ithholds tax @ 10% from gross rents with no deduction for costs. Property tax covers the cost of registering the title deeds with the municipality and is equal to 0.15 per cent of the purchase price. Most foreigners buying property in Bulgaria must form a limited company to purchase land, so they will be subject to corporation tax. Non-residents are taxed in Bulgaria on income arising from Bulgarian sources only. Done this way, there is no Capital Gains tax to pay. It is not their sole or principal residence. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. If you work as an employee with only a labor contract, you are not required to submit a tax return. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare... 25.10.2016 Bulgaria- one of the most preferable destinations to buy holiday residential property Any subsequent property sold in the same year will attract around 10% tax on any profit made. Transactions with new buildings remain subject to VAT, while transactions with buildings for which the permission to use (also known as Act 16) has been issued prior to 60 months are exempt, unless the seller opts out to treat them as VATable. Selling your Bulgarian property Selling your house, land or apartment is a very important action, particularly if it is owned by a domestic registered limited liability company in your name. This website or its third party tools use cookies, which are necessary to its functioning and required toachieve the purposes illustrated in the cookie policy. Incorporates a company in Bulgaria and the entity owns the property. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. For a house with yard in a village the total payment would be 5-6 BGN per year. The cheap Bulgarian property market attracts many investors from all over the world. Becoming a Bulgaria Tax Resident, you can benefit from the lowest tax rates in the entire European Union. If the tenant is a Bulgarian company, the tenant w ithholds tax @ 10% from gross rents with no deduction for costs. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. Personal Income Tax- 10% (flat rate taxation) Mandatory Social Security Contributions Employer: - 17.4% Employee: - 12.9% Maximum monthly taxable base - BGN 2,000. The property was worth US$250,000 or 250,000 at purchase. Option to pay per Job or time spent. Where a double taxation agreement exists between Bulgaria and your home country, which provides for double taxation relief, then a deduction for tax paid in the foreign country can be offset against tax on the same income in your home country. These laws affected commerce, foreign investments, insurance companies, tax collecting, banking, and more. If you work as an employee with only a labor contract, you are not required to submit a tax return. The property was worth US$250,000 or 250,000 at purchase. Capital Gains: The sale of real estate by nonresidents in Bulgaria is subject to 10% withholding tax on the net gains received. The governing legislation in Bulgaria regulating the legal aspects of the subject is the Bulgarian Inheritance Act (Bulgarian: Закон за наследството). Every owner is liable to pay annual municipal property tax to the government. As we told the income tax rate is 10% and you have to submit an annual tax return. Ongoing property taxes: Any rental income you have from the property is subject to 15% Bulgarian withholding tax. Bulgaria outcompetes other EU member states by offering the best of both worlds and offers fabulous opportunities for both companies and individuals. Any subsequent property sold in the same year will attract around 10% tax on any profit made. Rents earned in a Bulgarian company are taxed at 10% after deduction for costs including loan interest and building depreciation. Transactions with the underlying plots of the buildings are subject to the same rules. The garbage collection tax varies from 0.025 to 0.027 of the tax evaluation price. Specific tax planning advice to your circumstances should be sought. A foreign individual who decides to invest in property in Bulgaria has two options: Obtaining a Bulgarian ID card is a precondition to be granted tax residence of Bulgaria. But a longer holding period often results in no capital gains tax being payable. ... Bulgarian Property Insurance. As part of the Nyama Problemi Ltd group of sites, it was determined a real need for a property repair service covering the smaller repairs. Tax on purchase: This system has the information structured on two sections, depending on its user: an administrative section and one customer section. Bulgaria applies a worldwide income tax system and residents are taxable on their worldwide income. does not allow foreign individuals to acquire land until 2012. This transliterates to danŭk kŭshta. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. Bulgarian Property repair, renovations. The seller insists that a lower price is put on the title deed (tax evasion). There are usually two property taxes to be paid: property tax and garbage collection (which is optional), which are paid at the local municipality. Inheritance law regulates the financial consequences that arise as a result of the death of individuals, as well as the subsequent transfer of their assets. Invest in property which he purchases as an individual. It provides some information on its website in English. The tax year runs from 1 January - 31 December. How to Buy Property in Bulgaria, the Safe Way The most common mistakes when buying real estate in Bulgaria. Bulgarian properties for sale. In total the employee pays 12.9% and the employer contributes what corresponds to 17.9%. Back to Our Services, Non-residents are taxed in Bulgaria on income arising from Bulgarian sources only. Income from sale or exchange of property is not taxable in Bulgaria if: 1) the person who receives the income is ordinary resident for tax purposes in any EU member state; and. Due to the Integrated Information System for Cadastre and Property Registration (IKAR, founded in 2008) all information on Bulgarian properties are publicly available on the website of the Land Registry Agency. Should You Buy Or Build A House In Bulgaria. A notary public charges for preparing the preliminary contract and notary deed and for any checks he makes on a property. For all other beneficiaries, the inheritance tax rates vary, depending on the relationship between the donor and the heir. If the tenant is a Bulgarian company, the tenant withholds tax @ 10% from gross rents with no deduction for costs. The rate on capital gains from securities is equal to one half of the applicable rate as per the national legislations of Bulgaria and Israel. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare annual company tax reports every year. The fine is also very small. Bulgaria’s flat tax framework is undoubtedly exceptional from a EU perspective.Bulgaria is situated in South Eastern Europe and is bordered by Serbia and … We offer services to acquire and conclude your tax bill for you for an administrative charge of 50 Euros + … If you are resident in Ireland or the UK, you will be obliged to declare and file your Bulgarian income in Ireland/ UK also. As part of the Nyama Problemi Ltd group of sites, it was determined a real need for a property repair service covering the smaller repairs. For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR. The last time the basis tax value was recalculated was in 2002.This makes Bulgaria the country with lowest property tax in the whole European Union. If the tenant is an individual, s/he must pay gross rents to the landlord and the landlord must pay income tax @10%, quarterly, to the Bulgarian tax office. Bulgarian inheritance tax is levied on property exceeding BGN 250,000 (approximately EUR 125,000) and amounts to 0.7% for property inherited by brothers, sisters and their descendants, and 5% - for other heirs.] Income tax on individuals is 10%. The law contains specific rules on how the tax result of the CFC is to be calculated, as well as on when and how any tax profits of the CFC are to be attributed to the tax base of the Bulgarian taxpayer. A double taxation agreement exists between Bulgaria and Ireland / UK. For more details see the Data FAQ BULGARIAN PROPERTIES™, BULGARIANPROPERTIES.COM™ and the logos are trade marks of Bulgarian Properties Ltd., registered in Bulgaria under VAT#BG131164582 with address: 22, Zlaten Rog Str., Sofia 1407, Bulgaria. After buying a property in Bulgaria you are liable for annual property taxes. Withholding tax is levied on: Any dividends and shares in a liquidation surplus, as distributed (apportioned) by any resident legal person in favour of: The rule of thumb: sell one property per year tax free. Ongoing property taxes: Bulgarian Income Tax: For non-resident individuals, the applicable tax on rental income will depend on whether the tenant is an individual or a company. Law firm Ruskov & Kollegen ul. use (also known as Act 16) has been issued prior to 60 months are exempt, unless the seller opts out to treat them as VATable. The investors should be aware that the tax evaluation price is times less than the market one. Historically Bulgaria property sales included the common practice of under-declaring the actual value of a property on the title deed in order for both the seller and the buyer to save on property taxes. The flipside is that Bulgarian property is now remarkably affordable and probably appropriately priced. If you want to know more or withdraw your consent toall or some of the cookies, please refer to the Privacy Policy, Buying a quality property preserves the capital, Obligations for Companies without activity in Bulgaria 2018, Bewitched by Bulgaria's Rhodopes mountains. Selling Bulgarian property involves a variety of bureaucratic procedures that must be followed to enable the vendor to legally complete the transfer of the ownership to any new owner. Homestead Exemption is a savings allowed for those property owners who own and live at their primary residence. This must be done in 3 month period after the purchase date. The income tax is regulated by the Bulgarian personal income tax law. Bulgarian Property Taxes. The VAT rate in Bulgaria is 20%. The request for issuing this paper could be submitted only by the owner of the property or his legal attorney. It sounds back to front, but this applies to a lot of things in Bulgaria. The tenant pays this tax over to the Bulgarian Authorities, quarterly, on your behalf. The transfer of Bulgarian real estate is subject to a transfer tax @2% plus a State Entry fee of 0.1% of the purchase price (Notary Deed price). Professionals in Bulgarian Property Sales for Irish and British Investors We have been successfully representing Irish and British investors to Buy, Sell and Manage their properties in Bulgaria for over twelve years. These assumptions are critical. If the real estate and/or the movable property are owned by more than one person, the income is divided in proportion to the participation in the ownership. To obtain Bulgarian tax residency you are not required to stay for 183 days in Bulgaria. Brief information on taxation is provided within the Living in Bulgaria guide. Bulgarian Property repair, renovations. The exact percentage depends on the local Municipality. Once the local Tax services have the property declaration they can calculate your annual taxes and waste collection fees. The agency was founded in 2002 by Bulgarian property experts Nic Stoyanov and Orlin Orestov. Heirs at law or by will are required to pay inheritance tax except from the surviving spouse and heirs in direct line. However, the foreign individual can purchase the land via a Bulgarian registered company. A new VAT Act was published in 2007. Historically Bulgaria property sales included the common practice of under-declaring the actual value of a property on the title deed in order for both the seller and the buyer to save on property taxes. You reside in Bulgaria for not less than 183 days annually or 2. Option to pay per Job or time spent. Transfer tax – Transfer tax is imposed on the sale or exchange of immovable property and motor vehicles, at rates ranging from 0.1% to 3%, determined by the municipality. This system has the information structured on two sections, depending on its user: an administrative section and one customer section. If you sell a property in Bulgaria and you have a switched-on agent, it should be declared as your single and sole Bulgarian residence. The VAT rate in Bulgaria is 20%. However, the foreign individual can purchase the, 2) during the Bulgarian tax year the person sells not more than one residential property regardless of the date of its, 3) during the Bulgarian tax year the person sells not more than two properties, if they have been owned for more. Heirs at law or by will are required to pay inheritance tax except from the surviving spouse and heirs in direct line. Bulgarian Capital Gains Tax : For non-residents, withholding tax of 10% is deducted from Income derived from the sale or exchange of property – this is determined as 90% of the difference (if positive) between the selling price and the acquisition cost. As we told the income tax rate is 10% and you have to submit an annual tax return. A notary public charges for preparing the preliminary contract and notary deed and for any checks he makes on a property. Personal income tax rates. Bulgaria Tax Residency. Local Property Tax (Rates): are payable quarterly and vary per region / Municipality. Verila 5 1463 Sofia, Bulgarien Tel: (+359) 2 868 45 99 E-Mail: office@ruskov-law.eu Certain exemptions apply, among them that profits of CFCs with substantive economic activity will not be subject to Bulgarian tax. An annual return is due by 31 March following the relevant tax year end. Inheritance law regulates the financial consequences that arise as a result of the death of individuals, as well as the subsequent transfer of their assets. Bulgarian VAT Property Tax. Several European countries apply an attractive corporate tax regime but tend to neglect the personal income tax aspect. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare annual company tax reports every year. If a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. According to officials taxes on farm land will revitalize the market for this type of estates. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare... 25.10.2016 Bulgaria- one of the most preferable destinations to buy holiday residential property Transactions with the underlying plots of the buildings are subject to the same rules. These taxes are due by March each year with liability for the previous year. 2) during the Bulgarian tax year the person sells not more than one residential property regardless of the date of its acquisition; 3) during the Bulgarian tax year the person sells not more than two properties, if they have been owned for more than 5 years. Law firm Ruskov & Kollegen ul. Nevertheless, the WHT rate may not … The Bulgarian tax authority is the National Revenue Agency. In many countries a holding period of less than 5 years results in capital gains being taxable. Due to the Integrated Information System for Cadastre and Property Registration (IKAR, founded in 2008) all information on Bulgarian properties are publicly available on the website of the Land Registry Agency. Once you purchase a property in Bulgaria you have to declare it in the local Tax services. The transfer of Bulgarian real estate is subject to a transfer tax @2% plus a State Entry fee of 0.1% of the purchase price (Notary Deed price). You will also be obliged to file a tax return detailing your worldwide income in your home (tax resident) country. 20% of the income is regarded as non-taxable. Scope of taxation. However in Bulgaria property prices show growth of more than 20% every year. Some rural properties are billed as little as 15 Euros / year, other regular size Sofia apartments will typically be 150 Euros / year. If the real estate and/or the movable property are owned by more than one person, the income is divided in proportion to the participation in the ownership. For a flat in a quarter in Bourgas with 45 sq. 20% of the income is regarded as non-taxable. It is not their sole or principal residence. Currently foreign ownership of land is not possible in Bulgaria although this is set to change in 2014. For a solid house, 90 sq.m area in the Super Center Zone in Bourgas the annual real property tax is around 55 BGN and the waste collection fee is 60 BGN. Properties in Bulgarian capital Sofia have attracted lots of attention which pushed the building of many new apartment developments in the city. Verila 5 1463 Sofia, Bulgarien Tel: (+359) 2 868 45 99 E-Mail: office@ruskov-law.eu A foreign domiciled person is subject to inheritance tax only on property … In many countries a holding period of less than 5 years results in capital gains being taxable. According to the Bulgarian legislation you can claim Bulgarian tax residency if 1. Fraud Brief information on taxation is provided within the Living in Bulgaria guide. Every owner of a building or a plot is obliged to pay annual property tax. The rule of thumb: sell one property per year tax free. This means that if you sell your property, any gain you’ve made on it will count as a profit for your limited company and wil… These assumptions are critical. To get around this investors wanting to buy a house or villa must first set up a Bulgarian registered company. Law firm Ruskov & Kollegen ul. Done this way, there is no Capital Gains tax to pay. Homestead Exemption is a savings allowed for those property owners who own and live at their primary residence. Income tax on individuals. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. Currently foreign ownership of land is not possible in Bulgaria although this is set to change in 2014. Bulgarian companies are required to withhold tax on payments of dividends and liquidation proceeds; interest (including that incurred under finance lease agreements and on bank deposits); royalties; fees for technical services; payments for the use of properties; payments made under operating leasing, franchising, and factoring agreements; and management fees payable to non-residents. The Bulgarian tax authority is the National Revenue Agency. The basis tax value deserves special attention. The rates vary between 3.3% and 6.6% for all other beneficiaries. A flat tax rate of 10% applies to all personal income, with some exceptions. Bulgaria also levies the lowest flat personal income tax rate of 10%. All income earned in Bulgaria is taxed on a flat rate of 10%. These are different in value and depend on the size of populated area and its situation in the country, the neighborhood, the sq. The buying process varies in Bulgaria depending on whether you buy an apartment or a landed property. Agricultural land is exempt from all local taxes. Bulgarian Corporate Tax Professionals in Bulgarian Property Sales for Irish and British Investors We have been successfully representing Irish and British investors to Buy, Sell and Manage their properties in Bulgaria for over twelve years. A foreign domiciled person is subject to inheritance tax only on property … 1. Every owner is liable to pay annual municipal property tax to the government. You must do it if you are freelancer or work both like employee and freelancer. Bulgarian Income Tax : For non-resident individuals, the applicable tax on rental income will depend on whether the tenant is an individual or a company. Our skill set covers all areas of work from Electrics to Bathrooms and roof repairs. Additionally, in 1997 the government of Bulgaria began paying closer attention to the transactions of foreign companies who were doing business within Bulgaria. Annual company accounts and tax returns for Bulgarian Ltd. 27.03.2017. Such value is calculated on the date when the inheritance is disclosed. The corporate tax in Bulgaria is only 10% flat rate compared to 33.9%+ in Belgium, 33.3%+ in France and 25%+ in Austria. If 1 the cheap Bulgarian property is located this system has the information structured on sections! Bulgaria for not less than 5 years results in no capital gains: the sale of real market. S a practice worldwide this basis to be expensive whilst still effective or Build a house in guide. Calculate your annual taxes and waste collection duty ) for a house with yard in a quarter Bourgas! Have no reason to be as close to the same rules at law or by will are required submit... Up a Bulgarian registered company ago are widely available now for €25,000 until 2012 is.... 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