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of Legislations > LAW FOR TAXATION OF THE INCOME OF PHYSICAL
PERSONS
LAW FOR TAXATION OF THE INCOME OF PHYSICAL PERSONS
Art. 9. (1) The income from economic activity carried out by a physical
person on the territory of the country shall be considered income from
source in Bulgaria.
(2) It shall be considered that a person carries out economic activity
on the territory of Bulgaria when:
1. he has a place of economic activity or a definite base on the territory
of Bulgaria;
2. assigns or fulfils orders on the territory of Bulgaria personally
or through a procurator, trade proxy or in
another way whatsoever.
(3) Labour remuneration and income from providing services shall be
considered from a source in Bulgaria
when the job is done or the services are provided on the territory of
Bulgaria without respect of the source
of payment of the job or the services.
(4) Regardless of the provisions of para 3, the following income, paid
by a local person or by a place
of economic activity to a foreign person, on the territory of Bulgaria,
shall be considered income
from a source in Bulgaria.
1. remuneration for free lance practitioners, on condition that the
amount of the remuneration is deducted in
calculating the profit or the income of the payer or it would be deducted
if the payer is not exempt from
profit tax or from income tax;
2. remuneration, different from salaries paid to: employee or member
of managing or control body of
Bulgarian corporate body; branch of a foreign person; manager, proxy
or employee in a trade
representation of a foreign person according to the Law for the foreign
investments or to other person,
carrying out identical or similar functions;
3. pensions;
4. dividends and distribution of profit (income) by unpersonified and
personified companies, including
contracts for joint venture;
5. interest;
6. rents, remuneration under contracts for leasing, franchising, factoring
and other similar;
7. authors' and licence remuneration;
8. annuities, different from the payments under item 3;
9. compensations and forfeits;
10. any other taxable income, not included in para 1, 2 and 3, with
the exception of the cases when the
income is paid from a place of economic activity or a definite base,
located outside the territory of
Bulgaria, on condition that this income is deducted in calculation of
the income at the place of the
economic activity or definite base.
(5) Income from agricultural and forest farms, income from using real
estate and positive differences from
sales of real estate on the territory of the country shall be considered
income from sources in Bulgaria.
(6) For the purposes of para 5 "real estate" also includes
possession of ideal part or limited real right on real
estate.
(7) The income from transactions with shares in local companies, as
well as from transactions with
securities under para 8 shall be considered income from source in the
country.
(8) Income from Bulgarian state and municipal securities, issued by
the state, the municipalities and local
corporate bodies shall be considered income from a source in Bulgaria.
(9) (amend., SG 105/00) Income from transfer of enterprise of sole entrepreneur
shall be considered income
from a source in the country, regardless of whether the acquirer is
a local or foreign person.
Chapter four.
TAXABLE AND UNTAXABLE INCOME
Section I. Taxable income
Art. 10. Subject to taxation shall be the income resulting from:
1. labour remuneration and from legal terms of employment equalised
to them;
2. activity as sole entrepreneur, regardless of whether he is registered
under the commercial law;
3. craftsmanship;
4. free lance;
5. providing services by personal labour, except the cases under item
4 and 4;
6. activities in the sphere of the agricultural, forest and water farming;
7. sale and exchange of real estate, road vehicles, aircrafts and vessels;
8. sale of stock, shares and other participations in trade companies,
in unpersonified companies and other
forms of joint venture;
9. transfer of enterprise to sole entrepreneur;
10. rent, annuity and lease;
11. temporary concession of exercising rights under contracts for leasing,
franchising, factoring and
other similar;
12. authors' and licence remuneration;
13. compensations for missed profit and forfeits of such nature;
14. the interest, except in the cases under Art. 12, item 3 and 5;
15. remuneration for personal labour in companies and in cooperations
and production dividends from
cooperations;
16. dividends, income from share holding and bonuses;
17. bonuses and awards from sport events;
18. other income, not determined as untaxable or not exempt from taxation
under a law.
Art. 26. The tax basis is the gross amount of the received income from:
1. temporary ceding of rights, such as rights under contract for leasing,
franchising, factoring, etc.;
2. cash and objective prizes from competitions which have not been provided
by the employer or the
commissioner of the activity;
3. compensations for missed profit and forfeits of such nature;
4. interest, except those under Art. 12, item 3 and 5;
5. production dividends from cooperations;
6. exercising rights of intellectual property pursuant to inheritance;
7. accidental transactions and from all other sources which are not
explicitly stipulated by Art. 12.
8- (New - SG 153/98; suppl. SG 105/00, amend. SG 110/01) voluntary pension
insurance, voluntary health insurance and voluntary insurance for unemployment,
as well as from insurance "Life" and insurance "Life",
if they are connected with an investment fund, except these pointed
out in art. 12, para 1, items 3
and 4.
9. (new, SG I 1 8/02; amend., SG 1 12/03) dividends paid to local individuals
by foreign persons.
10. (new. SG 1 12/03) remuneration for personally carried out activity
on the territory of the country by
foreign individuals - athletes, science, ait and culture figures, including
where the income has been
paid/accrued through a third person.
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