|
- All forms of tax relief relate to the income of an individual in Bulgaria.
- The following amounts are subject to the definitions and limits in Bulgarian law.
| Personal Tax Relief |
Comments |
| Compulsory social security payments |
Up to 10% of taxable income. |
| Voluntary payments for a pension and medical insurance |
Up to 10% of taxable income. |
| Donations |
Up to 10% of taxable income. |
BUSINESS DEDUCTIONS
In addition to the reductions/credits specified above, reductions and business expenses may be claimed in Bulgaria as follows:
- Offset of losses - a loss may be offset up to 5 years forward. Bank losses may be offset for 10 years.
- Consolidated statements - it is not possible in Bulgaria to offset a loss in one company in a group against the profit of another company in the group.
- Financing costs - interest on credit is allowable for tax, nevertheless the interest may not exceed 75% of the profit, exclusive of interest
- Donations - donations to government institutions are recognized up to 10% of the donor's total income.
An employer's contributions to pension and health funds that are not legally compulsory are allowable to a limit of BGL 40 a month for each employee.
Depreciation of Fixed Assets
- The customary method of depreciation in Bulgaria is the straight line method.
- An asset that cost less than BGL500 is not defined as a fixed asset.
- A table of rates of depreciation according to the straight line method is as follows:
| Type of Asset |
Depreciation Percentage |
| Buildings |
4% |
| Machinery and equipment |
30% |
| Infrastructure, roads and transport vehicles |
10% |
| Computers and software |
50% |
| Vehicles |
25% |
| Other fixed assets |
15% |
|
