The licence tax regime is regulated in Articles 61h-61o of Local Taxes and Fees Law (LTFL).
Scope of taxation
An annual licence tax shall be levied on any activity specified in Annex 4 to the Law:
- Supplementary tourist accommodations of not more than 20 rooms;
- Mass-catering and entertainment establishments (restaurants, cafes and patisseries, bars, etc.);
- Retail trade on a net selling space of the establishment not exceeding 100 square meters;
- Services (carpenter, tailor, cobbler, hairdresser, typing, cosmetic, watchmaker, upholsterer, car repair, glazier, etc.);
- Retail of newspapers, magazines, etc.;
- Amusement or sports games (pinball, table tennis, darts, etc.);
- Pawn brokers;
- Vacation services (pleasure boats, jeep-drawn mini-trains, merry-go-rounds);
- Motor vehicle driving instruction;
- Paid parking facilities;
An annual licence tax shall be levied on any natural person, including a sole trader, who carries out any activity specified in Annex 4, in respect of the income accruing from any such activity, provided that:
- the turnover of the person for the last preceding year does not exceed BGN 50,000, and
- the person is not registered under the Value Added Tax Law, with the exception of registration for intra-Community acquisition under Article 99 and Article 100 (2) of the said Law.
Amount of tax
The Municipal Council shall determine the amount of the licence tax within the ranges according to Annex 4 to the Law depending on the location of the establishment within the territory of the relevant municipality.
The taxable persons who are subject to levy of a licence tax may enjoy tax relief in the following sequence:
- any natural persons, including any sole traders, who have lost 50 per cent and more than 50 per cent of the working capacity thereof, which loss has been determined by an effective decision of a competent authority, shall enjoy a rate rebate of 50 per cent of the licence tax as determined if they carry out the activity in person and do not hire workers for the said activity throughout the tax year;
- any natural persons, including any sole traders, who carry out two or three types of any licence activity of those specified in Items 1 to 36 of Annex 4 to the Law through work done in person throughout the tax year, shall pay the licence tax solely for the activity for which the tax determined is of the largest amount; this relief shall not apply to carrying out more than three activities;
- any natural persons, including any sole traders, who are pensioners and carry out a licence activity specified in Items 5, 6, 8 to 15, 18 to 20, 25, 27 to 29 and 31 of Annex 4 to the Law, shall pay 50 per cent of the licence tax as determined if they carry out the activity in person and do not hire workers for the said activity throughout the tax year;
- any persons who use the workplace for training of apprentices within the meaning given by the Skilled Crafts Law and who carry out a licence activity of the ones specified in Items 10, 12 and 13 of Annex 4 to the Law, shall pay 50 per cent of the licence tax as determined for the relevant workplace.
Declaring the tax
Not later than the 31st day of January of the current year, the persons subject to levy of a licence tax shall submit a tax return completed in a standard form, declaring thereby, the circumstances pertaining to the assessment of the tax. In the cases of commencement of activity after the said date, the tax return shall be submitted immediately before commencement of activity.
The tax returns shall be submitted in the municipality within the territory whereof the establishment whereat the licence activity is carried out is located, and where the licence activity is not carried out at an establishment or is not carried out from a fixed location, the said returns shall be submitted in the municipality where the natural person, including the sole trader, has his or her permanent address.
Deadlines for tax payment
The licence tax shall be remitted in four equal payments, as follows:
- for the first quarter: on or before the 31st day of January;
- for the second quarter: on or before the 30th day of April;
- for the third quarter: on or before the 31st day of July;
- for the fourth quarter: on or before the 31st day of October.
Any person, who submits the tax return on or before the 31st day of January of the current year and pays the full amount of the licence tax, as determined according to the circumstances as declared, on or before the same date, shall enjoy a rate rebate of 5 per cent.
The licence tax shall be assessed, secured and collected by municipal administration officers according to the procedure established by the Tax and Social-Insurance Procedure Code.
Within the meaning of §1, item 24 of the Supplementary Provisions of LTFL "Establishment", for the purposes of levy of a licence tax, shall be any place, premise and/or facility, including such in the open air, where an activity covered under Annex 4 is carried out, including:
collective tourist accommodation establishments and supplementary tourist accommodations;
(b) mass-catering and entertainment establishments;
(c) retail shops, open-air stalls, tables at markets, on pavements and in street roadways;
(d) studios, workshops and other premises, regardless of whether serving for other purposes as well or being part of an immovable property.
In accordance with the provisions of Article 4 (2) of the Local Taxes and Fees Law, any delinquent taxes shall be collected with interest under the Interest on Taxes, Fees and Other Such State Receivables Law.
Under the provision of Article 126а(1) of LTFL any person, who fails to submit a tax return under Article 61m or who submits any such return past the due date, shall be liable to a fine not exceeding BGN 500, unless subject to a severer sanction.
Under the provision of Article 126а(2) of LTFL any person, who fails to state or who misstates any particulars or circumstances under Article 61m a, return leading to underassessment of a licence tax or to exemption from a licence tax, shall be liable to a fine not exceeding BGN 1,000, unless subject to a severer sanction.
Under the provision of Article 127(2) of LTFL default on payment of any taxes and fees under this Law shall not be treated as an administrative infraction.
According to the provision of Article 128 of the Local Taxes and Fees Law, the written statements ascertaining the violations are drawn up by the municipal administration officers, and the penalty decrees are issued by the municipality mayor or by officials authorized by the mayor. 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.