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The Bulgarian Tax Return Explained

In this article, we help try to explain some important facts regarding as we refer to it the 'tax return'.

The yearly tax return has to be prepared and submitted by Bulgarian companies, where owners and shareholders  have established them for either the sole purpose to buy real estate, or to operate a business.

The tax return is the declaration as of article 92 from the Bulgarian Corporate Tax Law.*

The tax return consists of:

1 - Tax Return Declaration - is submitted to the National Revenue Agency. The deadline for the submission is 31st March of the current year for the activity of the previous financial year, which is the previous calendar year from 01st of January until 31st of December.

2 - Statistic Declaration - is submitted to the National Statistics Institute. The deadline for submitting is 31st March of the current year for the activity of the previous financial year, which is the previous calendar year from 01st of January until 31st of December.

3 - Balance Sheets (or the so called Financial Reports) are submitted to the Company Register. The balance sheets consist of 5 attachments.

The deadline for submitting is 30th June of the current year for the activity of the previous financial year, which is the previous calendar year from 01st of January until 31st of December.

What The Nil Tax Return consists of?

The "Nil" Tax Return consists of:
1 - Tax Return Declaration - submitted to the National Revenue Agency
2 - Statistic Declaration - submitted to the National Statistics Institute (NSI)
3 - Balance Sheets submitted to the Company Register.

Penalties for not submitting the necessary documents, described above:
Item 1 - from 700 BGN to 3,000 BGN
Item 2 - from 1,000 BGN to 2,000 BGN
Item 3 - from 2,000 BGN to 4,000 BGN

Which Companies should submit a tax return?

ALL companies with a registered seat and management office in Bulgaria that have had expenses and or incomes for the calendar tax year.

PLEASE KEEP IN MIND  that expences are  the utility bills such as electricity and water bills you are paying for your property, municipality taxes - such as garbage tax and council tax, receipts and invoices for services, etc. Buying a property on the name of the company is considered as activity as well, as a result, as soon as you buy your real estate- property or land, on the name of your company, your company has to submit a tax return WHICH IS NOT ''NIL''.

Which Companies should submit a"Nil" tax return?

These are the companies WITHOUT ANY expenses or incomes for the year. Even a single receipt (for municipality tax for example) should be accounted for and must enter in the balance sheet for the year. Submitting a "Nil" tax return in that case is a violation of the Bulgarian Accountancy Act and respectively brings fines. The penalty for this is from 700 BGN to 2,000 BGN.

Being a member of the EU, Bulgaria has synchronized and continues to do so with almost all tax laws and regulations, including also the penalty amounts, their procedure and collection. Despite having the lowest tax rates in the EU, the Bulgarian tax system is quite strict and requires the adhering to its rules, with lately organizing and implementing new, fast and effective ways to detect debtors and enforce fines, including with the means of putting injunctions and burdens on real estate, bank accounts and other assets of the companies that failed to oblige the legal requirements.

Article written by www.bulgaria-legal.com