According to Art. 218, Par. 2, for all the remaining activities, except for those that must be levied with the alternative tax, the taxable persons must be levied with corporate tax.

Who is entitled to pay alternative tax on the activity from ships operation?

This tax is paid by the persons performing marine commercial navigation if they comply with all the following conditions:

1. They are companies registered under the Commercial Act or are permanent establishments of a company, which is established for taxation purposes in another European Union-member state or European Economic Area-member state in accordance with the respective tax legislation, and, based on a Tax Treaty concluded with a third state, is not considered as established for taxation purposes in another state outside the EU or the EEA;

2. They operate with owned or rented ships, and also rent out ships;

3. They do not refuse to train trainees on board of the ships, except for the cases when the number of the trainees for a period of one year exceeds the ratio 1 trainee per 15 officers navigating the ships;

4. They recruit their crews with Bulgarian citizens or citizens of another EU or EEA-member states;

5. At least 60 per cent of the net tonnage of the operated ships belong to ships that are being navigated under Bulgarian flag or the flag of another EU or EEA-member states.

6. They operate according to the requirements of international conventions and the EU legislation regarding ships navigation safety and security, the environmental protection from ships navigation, and the living and working conditions on board.

Tax on the activity from ships operation is also due by the persons performing marine commercial navigation when they are administering ships based on management contracts, and at the same time are complying with the following conditions:

- they meet the criteria mentioned above in Items 1, 5 and 6;
- more than half of the administrative staff ashore or the crew consists of Bulgarian citizens or citizens of other EU member states or EEA member states;
- at least two thirds of the tonnage of the ships managed are administered by companies that are residents for tax purposes of an EU member state or another EEA member state.

Restrictions to the scope of the tax

The taxable persons are not entitled to apply the procedure for levying the activity from ships operation for:

1. Sea ships with net tonnage below 100 tons;
2. Fishing ships;
3. Entertainment ships, except for passenger ships;
4. Ships which the taxable persons have consigned for management or under a bareboat charter contract, except for the cases when the ships are consigned to the state;
5. Installations for extraction of ores and minerals, oil platforms and ships performing dredging, towing and dragging activities.

Legislation

The activity from ships operation is levied with alternative tax pursuant to the Corporate Income Tax Act.

Terms for declaring and paying

§ By 31 December of the previous calendar year – filing a declaration for exercising the right to choose under Art. 259, Par. 1;
§ By the end of each month – paying the tax for the previous month;
§ By 31 March of the next calendar year – filing an annual tax return for the previous calendar year.

Declaring the tax on the net tonnage of ships for the operation days of the ship:

The annual tax return is submitted to the National Revenue Agency’s territorial directorate, where the taxpayer is registered.

Pursuant to Art. 259, Par. 3 of CITA, when submitting the tax return the taxpayer shall also submit an annual statement of operations. Pursuant to § 1, Item 56 of CITA’s Supplementary Provisions, the annual statement of operations shall be the one under Art. 20, Par. 4 of the Statistics Act.

Download forms:

Template of the declaration under Art.259, Par.1 of CITA.

Annual Tax Return under Art. 259, Par. 2 of CITA for the tax due on the activity from ships operation.

Returns are submitted to:

§ The National Revenue Agency office, where the taxpayer is registered, or
§ By mail with confirmation of receipt

Tax due is paid:

§ Via banks

To state budget accounts of NRA’s territorial directorate, where the taxpayer is registered.

Payment can be made from every bank by filling in a payment order (deposit slip) forpayment to the budget.

! Usually the banks deduct a fee for the transfers. The lowest fee is deducted by the bank where the account of the respective NRA territorial directorate (office) is opened.

§ Via Internet

Payment via Internet requires a debit card and registration on the websites of E-pay and NRA

§ With postal order for tax payment.

The postal order shall specify the address and name of the respective territorial directorate (office) of NRA, the postal code, as well as the amount due.

Sanctions

Pursuant to Art. 261, Par. 1 of CITA, a taxable person that fails to submit the tax return under this law, or fails to submit it in due time, or fails to state data or circumstances, or states false data or circumstances resulting in either a lower amount of the tax or ungrounded abatement, or assignment, or exemption from tax, shall be penalized with a property sanction to the amount of BGN 500 to BGN 3,000. In case of a repeated (§ 1, Item 44 of the Supplementary Provisions) violation under Par. 1 the property sanction shall be to the amount of BGN 1,000 to BGN 6,000 (Art. 261, Par. 2 of CITA).

Pursuant to Art. 277 of CITA the persons who have applied the procedure for levying the activity from ships operation and do not comply with the conditions that entitle them to choose shall be penalized with property sanction to the amount from BGN 20,000 to 30,000, and in case of a repeated violation – to the amount from BGN 40,000 to 60,000. These persons shall not be entitled to apply the procedure for levying the activity from ships operation for the period of 5 years (Art. 277, Par. 2 of CITA).

A taxable person who fails to perform his/her obligations under Art. 259, Par. 3 (to submit an annual statement of operations), shall be penalized with a property sanction to the amount of BGN 500 to BGN 2,000, and in case of a repeated violation – to the amount of BGN 1,500 to BGN 5,000 (Art. 276 of CITA).

The statements for establishing the administrative offences shall be drafted by the National Revenue Agency authorities, and the penal rulings shall be issued by the Executive Director of the National Revenues Agency or an official authorized by him/her (Art. 278, Par. 1 of CITA).

Pursuant to Art. 278, Par. 2 of CITA the establishing of offences, issuing, appealing and execution of penal rulings shall be done under the procedure of the Administrative Offences and Sanctions Act.

BulgariCo today introduced several products that in combination represent a complete outsourcing solution for our Romanian customers. It becomes apparent that many Romanian businesses consider if not relocating to Bulgaria to have a parallel Bulgarian operation that helps them optimise their taxes within the boundaries allowed by the law.

BulgariCo professionals pay regular visits and conducts sessions with potential customers both in Rousse and Bucharest.

Should you request a face to face meeting regarding this or our other products please feel free to contacts us at office@bulgarico.com

BulgariCo is launching three new products to address the needs of our Hellenic clients arising from:

- the ongoing financial crisis in the country and
- the reactions of the fiscal authorities there.

The products are specifically targeted at addressing recently introduced normative regulations some of which are breaching the EU law and are expected to be challenged at EU level. Notwithstanding this, interim conditions need to be handled appropriately.

As a result of the fiscal clamp Greek business are now not only relocating their headquarters to Sofia, but moving jobs North of the boarder to Bulgaria.

Our products are in the areas of:

- Cross-border asset relocation
- Cross-border business set-up and outsourcing
- Individual (personal) relocation to Bulgaria

With corporate tax level of 10% and personal tax rate of 10% Bulgaria is turning into second homeland to Hellenic people with whom historical, cultural and economic relations abound.

Give us a call at +359 899 966 958 or write us to hellenico@bulgarico.com.

NB: English is the main language of our office but we can arrange for interpreters as well.
NB: Seminars and working sessions are organized in Petrici. You can book a time slot in advance. Free half an hour advice is rendered.

Here you can download the Convention for Avoidance of Double Taxation signed between USA and Bulgaria.

Our comments and discussion will follow shortly.

InvestBulgaria Agency (IBA) – the government investment promotion agency under the Ministry of Economy, Energy and Tourism has released a brochure investment climate and business opportunities in Bulgaria.

You can download the brochure here.

It seems that Greece, which is currently coping with serious economic challenges, has seen an investment heaven in Bulgaria. Over the first three months of 2010, Greek companies have invested in Bulgaria a total of 37.5 million euro, against only half a million euro for the same period of last year.

According to a publication in the Greek newspaper Impersia, this investment boom means that the Greek businessmen are seeking a secure place for their money and Bulgaria appears more attractive to them than their home market. According to Greece’s statistical watchdog, the volume of the trade exchange between Bulgaria and Greece hit 414.1 million euro in the first trimester of 2010.

20 September 2010

Bulgaria has established double tax agreements with more than 65 countries, including all major economies all around the globe.
These have been proved in time, as most of them have been signed 20+ years ago and yet more are about to be established.
Bulgarian Government is also planning to include even more articles which will easen the tax policies between the countries. For the complete list please visit the site of the Bulgarian Revenue Agency here.

16 September 2010

In the past couple of years, the HR business is flourishing due to the big interest of foreign employers to open their offices here. Low costs and high percent-age of well-educated people are the main incentives for the investors from all around the globe.

08 September 2010

Bulgaria Unlikely to Increase Personal and Corporate Tax Rates in the Next Five Years

Stable currency board system and low inflation are the main contributors for the good news.

Apart from that the Bulgarian Government has introduced actions for regulation of the income from VAT and excise duty.