- 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
|Compulsory social security payments
|Voluntary payments for a pension and medical insurance
||Up to 10% of taxable income.
||Up to 65% of taxable income.
||BGL 6,000 per one child
Bulgaria Business Deductions
In addition to the reductions/credits specified above, reductions and business expenses may be claimed in Bulgaria as follows:
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.
- Offset of losses - a loss may be offset up to 5 years forward.
- 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, if not exceeding the 3:1 debt to equity ratio,up to 30% of the company income before EBITDA. Non deductible interest can be carried forward, subject to certain terms.
- Rental income - There is a 10% deduction for rental income.
- Agriculture Income - There is a 60% deduction.
- Royalties Income - There is a 40% deduction.
Bulgaria 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
|Machinery and equipment
|Infrastructure, roads and transport vehicles
|Computers and software
|Other fixed assets