Tax on The Public-Financed Enterprises’ Income

The taxation regime for public-financed enterprises is regulated in Articles 248-253 of the Corporate Income Tax Law.

Scope of taxation

Any income accruing to any public-financed enterprise from any transactions covered under Article 1 of the Commerce Law, as well as from rent of movable and immovable property, shall be subject to a tax on income.

Taxable Persons

The taxable persons are public-financed enterprises.

Within the meaning of § 1, item 1 of the Supplementary Provisions of the Accountancy Law "budgetary enterprises" shall mean all persons that apply budgets, accounts for European Union Funds, and accounts for external funds pursuant to the Public Finance Act, including the National Statistical Institute, the National Health Insurance Fund, public institutions of higher education, the Bulgarian Academy of Sciences, the Bulgarian National Television, the Bulgarian National Radio, the Bulgarian News Agency, as well as all other persons that are budget organisations within the meaning of § 1(5) of the Public Finance Act § 1(5) of the Public Finance Law. 

Taxable Amount

The taxable amount for assessment of the tax on income shall be annual and shall be the income accruing to the public-financed enterprise from any transactions covered under Article 1 of the Commerce Law, as well as from rent or movable and immovable property charged during the relevant year.

Tax Rates

The income tax rate accruing to the municipalities shall be 2 per cent.

The income tax rate for the remaining public-funded enterprises shall be 3 per cent.

Declaring the tax

Any public-financed enterprises subject to levy of a tax on income for the relevant year shall file an annual tax return in a standard form on or before the 31st day of March of the next succeeding year with the territorial office of the National Revenue Agency based on their place of registration.

The annual activity report shall be submitted together with the annual tax return. In accordance with § 1, point 56 of the Additional Provisions of the Corporate Income Tax Law, this is the report under Article 20, paragraph 4 of the Statistics Law.

Tax Remittance

The tax on income assessed on the annual taxable amount shall be remitted by 31 March of the next succeeding year.

Sanctions

In accordance with Article 9 of the Corporate Income Tax Law, interest according to the Interest on Taxes, Fees and Other State Receivables Law shall be due on any taxes which are not remitted when due.

In accordance with the provisions of Article 261 of the Corporate Income Tax Law, any taxable person, which fails to submit a tax return under this Law, which fails to submit any such return when due, or which fails to state or misstates any particulars or circumstances leading to underassessment of the tax due or to undue reduction, retention of or exemption from tax, shall be liable to a pecuniary penalty varying between BGN 500 and BGN 3,000. Any repeated violation shall be punishable by a pecuniary penalty varying between BGN 1,000 and BGN 6,000.

Under the provision of Article 276 of CITL any taxable person, which fails to fulfil the obligations thereof under Article 259 (3) of the Law (to submit annual activity report), shall be liable to a pecuniary penalty of BGN 500 or exceeding this amount but not exceeding BGN 2,000 and, upon a repeated commission of the violation, to a pecuniary penalty of BGN 1,500 or exceeding this amount but not exceeding BGN 5,000.

In accordance with the provisions of Article 278 of the Corporate Income Tax Law, the written statements ascertaining the violations shall be drawn up by the authorities of the National Revenue Agency, and the penalty decrees shall be issued by the Executive Director of the National Revenue Agency or by an official authorized thereby. The ascertainment of violations, the issuing, appeal against and enforcement of the penalty decrees follows the procedure established by the Administrative Violations and Sanctions Act.

For further information: http://www.nap.bg/