Bulgaria Personal Income Tax : minfin.bg

Organization : Ministry of Finance
Facility : Personal Income Tax
Country : Bulgaria
Website : https://www.minfin.bg/en/827

What is Personal Income Tax?

The regime of taxation of the income of natural persons, including sole traders, is governed by the provisions of the Personal Income Tax Act (PITA). The income of resident natural persons from sources in the Republic of Bulgaria and abroad and the income of non-resident natural persons from sources in the Republic of Bulgaria.

Related / Similar Facility : Bulgaria Value Added Tax

Eligibility of Personal Income Tax

Taxable persons:
** the resident and non-resident natural persons, bearers of the obligation to pay taxes according to the law;
** the resident and non-resident persons obliged to withhold and remit taxes according to the law;
** legal representatives of the named persons.

А resident natural person, irrespective of citizenship, is a person:
** who has a permanent address in Bulgaria, or
** who resides on the territory of Bulgaria for more than 183 days in each 12-month period, or
** whose center of vital interests is located in Bulgaria;

Note:
A person with a permanent address in Bulgaria is not a resident natural person if his center of vital interests is not located in the country. A non-resident natural person is a person who is not designated as a resident.

Tax Period of Personal Income Taxation

The tax period for personal income taxation is the calendar year, with the exception of income taxed subject to a final tax.

Taxable income:
Income from all sources acquired by the taxable person during the tax year, except for income which is not taxable by law. In determining the amount of taxable income from the relevant source, the expenses provided for bylaw shall be deducted, in cases where the law has provided for the deduction of expenses.

Non-taxable income:
When not acquired in the source of business activity as a trader within the meaning of the Commercial Law or of an activity taxed as a sole trader’s (ST) business activity, the following shall be considered non-taxable:

the income acquired during the tax year from the sale or exchange of:
** one immovable residential property, if more than three years have passed between the date of acquisition and the date of sale or exchange;
** up to two immovable properties, as well as agricultural and forestry properties, irrespective of their number, if more than 5 years have passed between the date of acquisition and the date of sale or exchange.
** income from the sale or exchange of movable property, with the exception of:
** road, aircraft and water vehicles, if the period between the date of acquisition and the date of sale or exchange is less than one year;
** works of art, collectibles and antiques;
** stocks, shares, compensatory instruments, investment bonds and other financial assets, as well as income from foreign currency trading;
** income from disposal of financial instruments;
** profit or other source of equity capital in commercial companies distributed in the form of new stocks and shares, as well as profit or other source of equity capital distributed in the form of increases in the nominal value of existing stocks and shares;
** the income of the persons compensated in accordance with the legal act from the sale or exchange of compensatory instruments and investment bonds received as compensation;
** income from compulsory insurance in Bulgaria or abroad;
** income from supplementary voluntary insurance received after acquiring the right to an additional pension; income from investments of technical reserves received under insurance contracts; the income from investments of the assets of the supplementary pension insurance funds, allocated to individual accounts of the insured persons;
** interest income on deposits established in a member state of the European Union or in another state party to the Agreement on the European Economic Area:
** banks;
** bank branches.
** interest and discounts on Bulgarian state, municipal and corporate bonds, as well as on similar bonds issued under the legislation of another member state of the European Union, or of a state party to the Agreement on the European Economic Area;
** interest on non-taxable claims and awards of legal costs;
** compensations and other payments in case of moderate and grievous bodily injury, occupational disease or death;
** compensations for compulsory expropriation of property for state and municipal needs;
** compensations for pecuniary and non-pecuniary damages, excluding compensations for lost profits;
** the insurance compensations when an insured event has occurred;
** social assistance benefits and supplements received on the basis of the Persons with Disabilities Act, the Child Protection Act, the Family Allowances for Children Act or another legal act, as well as allowances and unemployment benefits received on the basis of a legal act;
** aid from organizations with social activity, established by law, and from non-profit legal entities registered to carry out socially beneficial activity;
** amounts received under the Family Child Allowances Act, as well as maintenance amounts received by persons entitled under the provisions of the Family Code;
** the scholarships received by individuals for their studies at home and abroad;
** sums of money and gifts received on the basis of a legal act from donors of blood, blood components and biological products for humanitarian purposes;
** monetary and material winnings obtained from participation in gambling games organized with a license issued under the Gambling Act or under the legislation of another Member state of the European Union or a party to the Agreement on the European Economic Area;

Income is deemed to be earned on the date of:
** payment – in case of payment in cash;
** the verification of the account of the recipient of the income or receipt of the check – in case of non-cash payment;
** receiving the benefit – for non-monetary income;
** the transfer of rights or property – for income from the sale, exchange or other transfer of rights or property for consideration;
** any other event specified by law.