Income Taxes on Natural Persons Act
Promulgated, State Gazette No. 95/24.11.2006, effective 1.01.2007


PART ONE
GENERAL PROVISIONS
Chapter One
SUBJECT MATTER, SCOPE OF TAXATION AND TAXABLE PERSONS
Subject Matter of Act
Article 1. This Act regulates taxation of income accruing to natural persons, including income from activity in a
sole-trader capacity.
Scope of Taxation
Article 2. Taxation under this Act shall apply to income accruing to resident and non-resident natural persons.
Taxable Persons
Article 3. Taxable persons under this Act shall be:
1. any resident and non-resident natural persons, who are liable to taxes under this Act;
2. any resident and non-resident persons, who are obligated to withhold and remit taxes under this Act.
Resident Natural Persons
Article 4. (1) "Resident natural person," regardless of nationality, shall be any person:
1. who has a permanent address in Bulgaria, or
2. who is present within the territory of Bulgaria for a period exceeding 183 days in any twelve-month period, or
3. who is sent abroad by the Bulgarian State, by bodies and/or organizations thereof, by Bulgarian enterprises, and the
members of the family of any such person, or
4. whose centre of vital interests is situated in Bulgaria.
(2) For the purposes of Item 2 of Paragraph (1), a person shall be deemed to be a resident during the year
wherewithin the presence thereof [in Bulgaria] exceeds 183 days. The day of exit from and the day of entry into the country
shall be treated separately as days of presence in the country.
(3) For the purposes of Item 2 of Paragraph (1), the period of residence in Bulgaria for the sole purpose of study or
medical treatment shall not be deemed to be a presence in Bulgaria.
(4) For the purposes of Item 4 of Paragraph (1), the centre of vital interests shall be situated in Bulgaria where the
interests of the person are closely related to the country. Upon determination of such interests, consideration may be given
to family, property, the place from which the person carries out a labour, professional or economic activity, and the place
from which the person manages the property thereof.
(5) Any person, who has a permanent address in Bulgaria but whose centre of vital interests is not situated in the
country, shall not be a resident natural person.
Non-resident Natural Persons
Article 5. "Non-resident natural person" shall be any person who is not a resident person within the meaning given by
Article 4 herein.
Liability for Tax of Resident Natural Persons
Article 6. (1) Any resident natural person shall be liable to taxes in respect of any income acquired thereby from
sources inside and outside the Republic of Bulgaria.
Liability for Tax of Non-resident Natural Persons
Article 7. Any non-resident natural person shall be liable to taxes in respect of any income acquired thereby from
sources inside the Republic of Bulgaria.
Sources of Income inside Republic of Bulgaria
Article 8. (1) Any income derived from economic activity carried out through a fixed base within the territory of the
Republic of Bulgaria or from disposition of the property of any such fixed base shall have its source inside the Republic of
Bulgaria.
(2) Any income derived from work performed within the territory of the Republic of Bulgaria, or from services
performed within the territory of the Republic of Bulgaria, shall have its source inside the Republic of Bulgaria.
(3) Any dividends and share in any liquidation surplus, arising from participating interests in resident legal persons and
unincorporated associations, including agreements on joint activity, shall have their source inside the Republic of Bulgaria.
(4) Any income derived from transfer of the enterprise of a sole trader registered in the Republic of Bulgaria shall have
its source inside the Republic of Bulgaria, regardless of whether the transferor is a resident person.
(5) Any remunerations for activity performed within the territory of the country by non-resident natural persons who
are athletes, public figures, scientists, artists and cultural figures, including where the income has been paid/charged through
a third party, such as a performer-management agency, a production company and other intermediaries, shall have its
source inside the country.
(6) The following income, charged/paid by resident persons, by representative offices, as well as by a permanent
establishment or a fixed base in the Republic of Bulgaria, shall likewise have its source inside the Republic of Bulgaria:
1. any damages and indemnities accruing in lieu of or together with another income from a source inside the Republic
of Bulgaria;
2. any cash prizes and merchandise awards awarded at games, competitions and contests which are not provided by
an employer or a commissioning entity;
3. any remunerations other than remunerations under an employment relationship, paid to: an employee or a member
of a management or supervisory body of a Bulgarian legal person, of a subsidiary wholly owned by a non-resident person,
an employee of a representative office of a non-resident person, or to any other person who performs identical or similar
functions;
4. any interest payments, including interest within payments under a lease contract;
5. any income from rent or other provision for use of movable or immovable property;
6. any payments received under franchising agreements and factoring contracts;
7. any copyright and licence royalties;
8. any technical assistance fees;
9. any compensations under management contracts.
(7) Any income covered under Paragraph (6), which is charged by resident legal persons or by resident sole traders
through a permanent establishment or a fixed base outside the country or which are paid by resident natural persons through
a fixed base outside the country, shall not have its source inside the country if there is an effective convention for the
avoidance of double taxation between the Republic of Bulgaria and the State in which the permanent establishment or the
fixed base is situated.
(8) Any income derived from shares, interests, compensation instruments, investment vouchers and other financial
assets, issued by the [Bulgarian] State, the municipalities, resident legal persons, unincorporated associations and other
forms of joint activity, as well as from any transactions therein, shall have its source inside Bulgaria.
(9) Any income derived from agriculture, forestry, hunting ground management and fisheries within the territory of the
country shall have its source inside the country.
(10) Any income derived from use, sale, exchange or other transfer of immovable property, including any such transfer
of an undivided interest in or a limited right in rem to any such property situated within the territory of the country, shall have
its source inside the country.
(11) Upon determination of the source of income under this Article, the place of payment of the income shall be
ignored.
Documenting and Accounting for Income
Article 9. (1) The taxable persons shall be obligated to register and account for any sale of goods and services as
effected by means of issuing a fiscal cash receipt according to a procedure established by an ordinance of the Minister of
Finance, except where payment is effected by bank transfer or through an offset.
(2) Any taxable persons, who are not obligated to issue a fiscal cash receipt printed by a fiscal device according to
Paragraph (1), shall issue a document on the income acquired thereby from sources referred to in Items 3 and 4 of Article
10 (1) herein, containing the essential elements covered under Article 7 (1) of the Accountancy Act .
(3) The provisions of Paragraph (2) shall not apply to any income in respect of which, upon the acquisition thereof, the
payer of the income issues a Statement of Amounts Paid or where a final tax has been levied on the income according to the
procedure established by Chapter Six herein.
Chapter Two
INCOME AND TAXES
Types of Income
Article 10. (1) Depending on the source, there shall be the following types of income under this Act:
1. income from employment relationships;
2. income from economic activity in a sole-trader capacity;
3. income from other economic activity;
4. income from rent or from other onerous provision for use of rights or property;
5. income from transfer of rights or property;
6. income from sources referred to in Article 36 herein, as well as income whereon final taxes are leviable under this
Act.
(2) Depending on the form of payment, income may be cash and non-cash.
(3) Any income derived in a foreign currency shall be translated into Bulgarian lev terms along the exchange rate of the
Bulgarian National Bank as applicable at the date of acquisition.
(4) The non-cash income shall be translated into Bulgarian lev terms at market price at the date of acquisition.
Acquisition of Income
Article 11. (1) Save as otherwise provided for by this Act, any income shall be deemed to be acquired on the date of:
1. payment: in the case of cash payment;
2. crediting the account of the recipient of the income or receipt of the cheque: in the case of non-cash payment;
3. receipt of the consideration: in the case of non-cash income.
(2) In the cases of sale, exchange or other onerous transfer of rights or property covered under Article 33 (3) herein,
the income shall be deemed to be acquired as at the date of the transfer.
(3) Income shall furthermore be deemed to be acquired by a natural person where the payment or consideration is
received by a third party on the order of the said natural person or under an agreement between the said natural person and
the payer. For determination of the date of acquisition, Paragraphs (1) and (2) shall apply.
(4) Any income referred to in Article 33 (10) herein shall be deemed to be acquired on the date of the judgment of
court on the transfer with deletion of the sole trader.
Taxable Income
Article 12. (1) Taxability under this Act shall apply to income derived from all sources acquired by a taxable person
during the tax year, with the exception of the income which is non-taxable by virtue of a law.
(2) Where deduction of expenses is provided for in this Act, the expenses determined under this Act shall be taken
into consideration upon determination of the taxable income from the relevant source.
Non-Taxable Income
Article 13. (1) Taxability shall not apply to:
1. any income acquired during the tax year from the sale or exchange of:
(a) one residential immovable property, regardless of the date of acquisition of the said property;
(b) up to two immovable properties, as well as any number of agricultural and forest properties, provided that more
than five years have elapsed between the date of acquisition and the date of sale or exchange;
2. any income accruing from the sale or exchange of movable property, with the exception of:
(a) means of transport by road, air and water, provided that the period from the date of acquisition to the date of sale
or exchange is less than one year;
(b) works of art, collectors' items and antiques;
(c) shares, interests, compensation instruments, investment vouchers and other financial assets, as well as the income
accruing from trade in foreign exchange;
(d) movable property delivered to persons who have the right to carry out collection, transport, recovery or disposal
of waste in accordance with the Waste Management Act ;
3. any income accruing from transactions in shares in public companies, negotiable rights attaching to shares in public
companies and units of collective investment schemes, effected on the regulated Bulgarian securities market;
4. any profit or another source of owners' equity distributed in the form of new interests and shares in commercial
corporations, as well as any profit or another source of owners' equity distributed in the form of an increase of the nominal
value of the previously issued interests and shares;
5. any income accruing to persons indemnified according to the procedure of a statutory instrument from the sale or
exchange of compensation instruments and investment vouchers received as indemnity;
6. any income accruing from compulsory social insurance in Bulgaria or abroad;
7. any income accruing from supplementary voluntary social insurance received after attainment of entitlement to
supplementary pension; any income accruing from investment of the technical provisions received under contracts of
insurance; and income accruing from investments of the assets of the supplementary retirement insurance funds, apportioned
to the individual accounts of the insured persons;
8. any interest paid on accounts and deposits with any domestic commercial bank, branch of a foreign bank and with
domestic mutual aid funds;
9. any interest paid and discounts made on Bulgarian government, municipal and corporate bonds;
10. any interest on claims established by a court of law, which are not subject to taxation, and any indemnities
awarded for court costs;
11. any compensations and other such payments awarded for medium and grievous bodily harm, occupational disease
or death;
12. any compensations for property taken by eminent domain for state and municipal needs;
13. any compensations for damage to property and personal injury, with the exception of the compensations for lost
profit;
14. any insurance benefits, when an insured event has incurred;
15. any social assistance allowances and benefits received in pursuance of the Integration of Persons with Disabilities
Act , the Child Protection Act , the Family Allowances Act or of another statutory instrument, as well as any unemployment
benefits and allowances received in pursuance of a statutory instrument;
16. any assistance from organizations with social activity, established by a law, and from not-for-profit legal entities
registered for pursuit of public benefit activities;
17. any amounts received in pursuance of the Family Allowances Act , as well as any alimony and child support
payments received by entitlees according to the provisions of the Family Code ;
18. any scholarships in favour of natural persons for the study thereof in Bulgaria and abroad;
19. any sums of money and merchandise awards received in pursuance of a statutory instrument by donors of blood,
blood components and biological products for human purposes;
20. any winnings and merchandise awards received through participation in games of chance within the meaning given
by the Gambling Act ;
21. any winnings and merchandise awards received through participation in games which are not games of chance
within the meaning given by Article 3 of the Gambling Act , or in other games in which the winnings are determined by
chance;
22. any government and national awards granted to creative artists in the field of culture and to athletes, as well as any
prizes of laureates of competitions under projects and programmes financed in whole or in part by the Culture National
Fund;
23. any sums received under non-employment relationships for travel and accommodation expenses, where for the
account of the commissioning entity and where documented according to the procedure established by effective legislation,
as well as the per diem expenses, but not more than their double amount fixed for persons under employment relationships;
24. any income derived from ground rent, rent charge or from other onerous provision for use of agricultural land;
25. any remunerations drawn by: the members of the staff of diplomatic missions in accordance with the Vienna
Convention on Diplomatic Relations ; the members of consulates in accordance with the Vienna Convention on Consular
Relations ; the employees of inter-state and inter-governmental organizations according to the international treaty concluded
with the respective organization, and the members of the family of any such persons, insofar as this is provided for in the
relevant international treaty;
26. any income accruing from the sale or exchange of any property acquired by legal or testamentary succession, as
well as of any property restituted according to the procedure established by a statutory instrument;
27. any consumer dividends distributed by cooperatives established under the Cooperatives Act .
(2) The following shall not be treated as income:
1. any property devolved by legal or testamentary succession or acquired by gift, as well as any property received
through restitution according to the procedure established by a statutory instrument;
2. any shares and interests allotted in consideration of non-cash contributions to a commercial company.
(3) Taxability shall not apply to any income accruing from the activity of natural persons registered as tobacco
producers and agricultural producers, including such carrying out activity in a sole-trader capacity, for unprocessed plant
and animal produce, with the exception of any income accruing from growing of ornamental plants.
(4) The provisions of Paragraphs (1) and (2) shall not apply to any income accruing from economic activity in a
merchant capacity within the meaning given by the Commerce Act , including in a sole-trader capacity.
Taxation of Income
Article 14. (1) A tax on the aggregate annual taxable amount shall be levied on the income covered under Chapter
Five herein which has been acquired during the tax year.
(2) A final tax shall be levied on the income covered under Chapter Six herein.
(3) A final annual (licence) tax shall be levied on the income covered under Chapter Seven herein.
PART TWO
AGGREGATE ANNUAL TAXABLE AMOUNT
Chapter Three
GENERAL PROVISIONS
Tax Year
Article 15. (1) The tax year shall be concurrent with the calendar year.
Determination of Taxable Income and of Taxable Amount
Article 16. (1) The taxable income and the taxable amount shall be determined for each source of income separately
according to the provisions of this Act.
(2) Any income subject to levy of final taxes according to the procedure established by this Act or of final taxes
according to the procedure established by the Corporate Income Tax Act shall be excluded upon determination of the
taxable income.
Aggregate Annual Taxable Amount
Article 17. The aggregate annual taxable amount shall be the sum total of the annual taxable amounts determined for
each type of income, depending on the sources, net of the tax reliefs provided for in this Act.
Chapter Four
TAX RELIEFS
Tax Relief for Persons with Reduced Working Capacity
Article 18. (1) The sum total of the annual taxable amounts for any person who has 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 be debited with the double amount of the annual tax threshold, including for the year of occurrence of the loss of
working capacity and for the year of expiry of validity of the decision.
(2) The taxable income charged for any month during which the work was performed, in respect of income from
employment relationships accruing to any person who has lost 50 per cent and more than 50 per cent of the working
capacity thereof, shall be debited with the double amount of the monthly tax threshold, including for the month of occurrence
of the loss of working capacity and for the month of expiry of validity of the decision.
Tax Relief for Personal Voluntary Social and Commercial Insurance Contributions
Article 19. (1) The sum total of the annual taxable amounts shall be debited with any personal voluntary social
insurance contributions made during the year to an aggregate amount not exceeding 10 per cent of the sum total of the
annual taxable amounts, as well as with any personal voluntary health insurance contributions and premiums/payments paid
during the year under contracts of life assurance to an aggregate amount not exceeding 10 per cent of the sum total of the
annual taxable amounts.
(2) The taxable income charged for any month during which the work was performed, in respect of income from
employment relationships, shall be debited with the personal supplementary social insurance contributions remitted during
the month through an employer, to an aggregate amount not exceeding 10 per cent of the sum, as well as with the personal
voluntary health insurance contributions and premiums/payments paid during the month under contracts of life assurance for
the account of the person to an aggregate amount not exceeding 10 per cent of the sum.
(3) The tax relief referred to in Paragraphs (1) and (2) shall be enjoyable where, according to the contract concluded
with the commercial insurance company or social insurance company, the natural person who is liable for the tax is
commercially or socially insured.
(4) The tax relief referred to in Paragraphs (1) and (2) shall furthermore be enjoyable where, by agreement with the
persons, the commercial insurance company or the social insurance company is replaced and the resources raised
theretofore are moved by bank transfer.
Tax Relief for Personal Contributions for Contributory Service upon Retirement
Article 20. The sum total of the annual taxable amounts shall be debited with the social insurance contributions remitted
during the year for the account of the person under § 9 of the Transitional and Final Provisions of the Social Insurance Code
.
Tax Relief for Children
Article 21. (1) Any resident natural persons, including such carrying out activity in a sole-trader capacity, may enjoy
tax relief for children by deducting from the sum total of the annual taxable amounts for the income of the said persons:
1. in respect of one child who has not attained legal majority: BGN 420;
2. in respect of two children who have not attained legal majority: BGN 840;
3. in respect of three and more children who have not attained legal majority: BGN 1,260.
(2) The tax relief shall be enjoyable subject to the simultaneous fulfilment of the following conditions:
1. by the 31st day of December of the tax year, the child is a resident natural person and is a Bulgarian citizen or a
foreigner whereto asylum or refugee status has been granted according to the procedure established by the Asylum and
Refugees Act ;
2. the child has not attained legal majority;
3. by the 31st day of December of the tax year, the child has not been placed for fully public-financed rearing in a
specialized child institution.
(3) The tax relief shall be enjoyable by any person referred to in Paragraph (1) who, by the 31st day of December of
the tax year, is:
1. a parent who has not been deprived of parental rights, and provided that:
(a) the child is not placed outside the family, and
(b) curatorship or tutorship is not instituted, or
2. a tutor or curator: in the cases of tutorship and curatorship, or
3. a member of the immediate or extended family: in the cases where the child is placed for a period of not less than six
months with members of the immediate or extended family within the meaning given by the Child Protection Act , or
4. a foster parent: in the cases of long-term placement of the child for rearing with a foster family within the meaning
given by the Child Protection Act .
(4) The tax relief shall be enjoyed up to the amount of the sum total of the annual taxable amounts and provided that
the person referred to in Paragraph (3) submits a written declaration from the other parent or from the other foster parent or
member of the immediate or extended family, as the case may be, to the effect that the latter will not claim the rebate for the
respective tax year.
(5) A declaration under Paragraph (4) shall not be submitted where the other parent or foster parent or member of the
immediate or extended family, as the case may be:
1. is not a resident person for the year for which the relief is enjoyed;
2. is unknown, deceased, or has been deprived of parental rights, or has not been awarded child custody in the cases
of divorce.
(6) The tax relief shall nonetheless be enjoyable by a person who has not been awarded child custody in the cases of
divorce, where the conditions covered under Paragraphs (1) to (3) exist in respect of the said parent and where the said
parent submits a written declaration under Paragraph (4) from the other parent.
(7) The tax relief shall be enjoyable even for the years wherein the child was born and has attained legal majority.
(8) The circumstances and the conditions covered under Paragraphs (1) to (7) shall be declared by a declaration
completed in a standard form.
Tax Relief for Donations
Article 22. (1) The sum total of the annual taxable amounts shall be debited with any donations made during the year:
1. up to 5 per cent, where the donation is in favour of:
(a) any health-care and medical-treatment facilities;
(b) any specialized institutions for provision of social services according to the Social Assistance Act , as well as of the
Social Assistance Agency and of the Social Assistance Fund under the Minister of Labour and Social Policy;
(c) any specialized child institutions according to the Child Protection Act , as well as of any care homes for children
deprived of parental care according to the Public Education Act ;
(d) any creches, kindergartens, schools, higher schools or academies;
(e) any public-financed enterprises, within the meaning given by the Accountancy Act ;
(f) any religious denominations registered in the country;
(g) any specialized enterprises or cooperatives of persons with disabilities, entered in the register referred to in Article
29 of the Integration of Persons with Disabilities Act , as well as in favour of the Agency for Persons with Disabilities;
(h) any persons with disabilities, as well as for technical aids therefor;
(i) any victims of crises within the meaning given by the Crisis Management Act , or of the members of the families
thereof;
(j) the Bulgarian Red Cross;
(k) socially disadvantaged persons;
(l) children with disabilities or parentless children;
(m) any cultural institutes, or for the purposes of cultural, educational or research exchange under an international
treaty whereto the Republic of Bulgaria is a party;
(n) any not-for-profit legal entities, registered in the Central Register of Not-for-Profit Legal Entities for pursuit of
public benefit activities, with the exception of organizations supporting culture within the meaning of the Financial Support
for Culture Act ;
(o) any scholarships instituted and provided for the instruction of schoolchildren and students at Bulgarian schools;
(p) the Bulgaria Energy Efficiency Fund;
(q) any therapeutic communities for narcotics-dependent persons, as well as of narcotics-dependent persons for the
therapy thereof;
2. up to 15 per cent for a donation for culture;
3. up to 50 per cent, where the donation is in favour of the Fund for Medical Treatment of Children Centre.
(2) The aggregate amount of the tax relief for donations may not exceeding 65 per cent of the sum total of the annual
taxable amounts referred to in Paragraph (1).
(3) Where the donation is a non-cash asset, the amount thereof shall be the cost of acquisition as shown in the
documents on acquisition of the gift by the donor, provided that the said acquisition occurred within three months before the
date of donation. In the rest of the cases, the amount of the donation shall be the market price at the date of provision of the
gift.
(4) The date of acquisition of the donation by the donnee within the meaning given by Article 11 herein shall be
deemed to be the date on which the donation was made.
(5) The annual taxable amount [for the income] from activity carried out in a sole-trader capacity shall be excluded
from the sum total of the annual taxable amounts referred to in Paragraph (1).
Enjoyment of Tax Reliefs
Article 23. The tax reliefs shall be enjoyed by submission of a tax return under Article 50 herein, attaching thereto:
1. a copy of a valid decision of the Territorial Medical Expert Board/National Medical Expert Board: in respect of the
tax relief referred to in Article 18 herein;
2. copies of the documents certifying the contributions made: in respect of the tax relief referred to in Article 20 herein;
3. a declaration referred to in Article 21 (8) herein: in respect of the tax relief referred to in Article 21 herein;
4. copies of documents certifying that the donee is among the persons listed in Article 22 herein and that the gift has
been received: in respect of the tax relief covered under Article 22 herein.
Chapter Five
ANNUAL TAXABLE AMOUNTS
Section I
Income from Employment Relationships
Taxable Income
Article 24. (1) The taxable income accruing from employment relationships shall comprehend the labour remuneration
and all other payments in cash and/or in kind from an employer or for the account of an employer with the exception of the
income covered under Paragraph (2).
(2) The taxable income from employment relationships shall exclude:
1. the value of:
(a) the free food and/or food additives, provided in kind under Article 285 of the Labour Code ;
(b) the free preventive food and antidotes provided in kind according to the procedure established by other laws;
(c) the free food provided in kind to: members of ships crews for the days of service, fishermen for the days of catch,
and divers for the days of diving, to the duty personnel working 12-hour shifts at medical-treatment facilities, to surgical
teams, emergency medical care teams and to blood collection teams;
(d) the free food provided in kind to servicepersons according to Article 234 (3) of the Defence and Armed Forces of
the Republic of Bulgaria Act ;
(e) the monetary ration allowance paid in pursuance of the Civil Aviation Act , the Defence and Armed Forces of the
Republic of Bulgaria Act , the Implementation of Penal Sanctions Act , and the amounts referred to in Article 204 (1) of the
Ministry of Interior Act ;
(f) the food vouchers received in the amount and according to the procedure established by the Corporate Income
Tax Act ;
2. the value of the special working clothes and individual protective means which are provided in kind under terms and
according to a procedure provided for in a statutory instrument;
3. the value of the working clothes, uniforms and presentable clothing provided under terms and according to a
procedure provided for in a statutory instrument;
4. the general supplies and accoutrements ensured in pursuance of the Ministry of Interior Act and the Defence and
Armed Forces of the Republic of Bulgaria Act ;
5. the value of:
(a) any travel and accommodation expenses, where documented according to the procedure established by effective
legislation;
(b) any per diem expenses, but not more than the double amount thereof as stated in a statutory instrument;
6. any additional food expenses which are paid in lieu of per diem expenses to factory and office workers in road
transport and rail transport, in dining cars, in mobile post offices, in mobile security protection and in other such activities
whereat the work duties are performed during travel to another nucleated settlement or facility;
7. the compensation amounts referred to in Article 240 (4) of the Defence and Armed Forces of the Republic of
Bulgaria Act and in Article 210 of the Ministry of Interior Act ;
8. any compensations covered under Article 200, Items 1 and 2 of Article 216 (1), Article 216 (2) and (3) , Article
222 (2) and (3) and Article 226 (3) of the Labour Code , any compensations covered under Article 235 , 237 and 239 of
the Defence and Armed Forces of the Republic of Bulgaria Act , under Article 204 (4) and Article 252 of the Ministry of
Interior Act , under Article 139d, Items 1 and 2 of Article 139f (1), Article 157a (3) and Article 188n of the Judicial
System Act, and any compensations covered under Article 78 , Article 81b (4) , Article 82 (3), Article 85 (5) , Article 104
(3) and (4) and Article 106 (3) of the Civil Servants Act ;
9. any expenses on fringe benefits for the account of the employer, as taxed according to the procedure established by
the Corporate Income Tax Act , as well as any expenses on transport from the place of residence to the place of work for
the account of the employer, which are not subject to taxation according to the Corporate Income Tax Act ;
10. the lump-sum allowances for medical treatment, provided by the employer for the account of the expenses on
fringe benefits: up to the value of the treatment;
11. the value of the lump-sum allowances provided by the employer for the account of the expenses on fringe benefits
upon: child birth, contracting of civil marriage or death of a member of the family: not exceeding, in aggregate, the amount of
the annual tax threshold;
12. the expenses incurred by the employer of up to BGN 60 monthly for each insured person on payments/premiums
for supplementary voluntary social insurance, voluntary health insurance and/or life assurance, as reported by the enterprises
and the representative offices, regardless of whether they carry out economic activity;
13. the expenses incurred by the employer on any commercial insurances defined as compulsory by a statutory
instrument;
14. the benefits and allowances covered under Part One of the Social Insurance Code ;
15. the cash prizes and merchandise awards received in pursuance of and according to the procedure established by a
statutory instrument;
16. the cash allowance referred to in Article 245 (1) of the Defence and Armed Forces of the Republic of Bulgaria
Act and in Article 204 (5) of the Ministry of Interior Act .
Annual Taxable Amount
Article 25. The annual taxable amount for the income from employment relationships shall be determined by debiting
the taxable income referred to in Article 24 herein, acquired by the taxable person during the tax year, with the compulsory
social insurance contributions withheld by the employer which are for the account of the natural person, according to the
procedure established by the Social Insurance Code and of the Health Insurance Act .
Section II
Income from Activity in Sole-Trader Capacity
Taxable Income
Article 26. (1) The taxable income accruing from activity in a sole-trader capacity shall be the taxable profit formed
according to the procedure established by the Corporate Income Tax Act , including the financial result from the transfer of
the sole trader's enterprise without deletion of the sole trader in the Commercial Register.
(2) The taxable income referred to in Paragraph (1) shall exclude the accounting financial result formed by activities:
1. on which alternative taxes are levied under the Corporate Income Tax Act ;
2. on which a final annual (licence) tax is levied according to the procedure established by this Act;
3. referred to in Article 13 (3) herein, accruing to sole traders registered as tobacco producers and agricultural
producers.
(3) Upon formation of the tax profit, sole traders shall apply the provisions on carry-forward of a tax loss under the
Corporate Income Tax Act .
(4) For the purposes of determining the taxable income referred to in Paragraph (2), the portion of undistributable
expenses corresponding to the activities referred to in Paragraph (2) shall be arrived at by multiplying the total amount of
unidstributable income/expenses by the proportion of the net income accruing from the activities referred to in Paragraph (2)
and all net income from sales.
(5) Any sole traders, who carry out activities which are subject to levy of alternative tax within the meaning given by
the Corporate Income Tax Act , shall be taxed under the terms and according to the procedure established by the said Act.
(6) Taxability according to Paragraphs (1) to (5) shall furthermore apply to any income from economic activity
accruing to a natural person who is a merchant within the meaning given by the Commerce Act but is not registered as a
sole trader.
Use of Natural Person's Personal Property for Activity in Sole-Trader Capacity
Article 27. (1) Any natural person, who owns the sole trader's enterprise, may incorporate into the property of the
sole trader any items of movable and immovable property acquired by the said person which:
1. are not in a co-ownership regime, or
2. are not part of community property.
(2) The items of property referred to in Paragraph (1) shall be entered into the accounts of the sole trader at the
documented cost of acquisition thereof.
(3) In the cases under Paragraph (1), the natural person who owns the sole trader shall draw up a memorandum,
stating therein the type of the item of property and the cost referred to in Paragraph (2).
(4) In the cases referred to in Item 2 of Paragraph (1), the other spouse shall declare, by a notarized declaration, the
consent thereof to incorporation of the item of property into the property of the sole trader.
(5) If any item of property referred to in Paragraph (1) be subsequently excluded from the property of the sole trader
and passes to the natural-person owner, for tax purposes the natural person who owns the sole trader shall be deemed to
effect a sale of the said item of property at a market price, notwithstanding the circumstances covered under Article 13
herein. The taxable income shall be determined as a difference between:
1. the market price and the tax value: in respect of any tax depreciable assets under the Corporate Income Tax Act ;
2. the market price and the documented cost of acquisition: in respect of any other items of property.
(6) The tax temporary differences, within the meaning given by the Corporate Income Tax Act , which are related to
any item of property referred to in Paragraph (1), shall not be recognized for tax purposes at the time of the sale referred to
in Paragraph (5) and in the subsequent years.
(7) The market price referred to in Paragraph (5) shall be presumed as a cost of acquisition upon a subsequent sale or
exchange of the item of property by the natural-person owner, as well as upon a subsequent application of Paragraph (2).
Annual Taxable Amount
Article 28. The annual taxable amount shall be determined by debiting the taxable income referred to in Article 26
herein for the tax year with the contributions which the self-insured person is obligated to make for the tax year for his or her
own account according to the procedure established by the Social Insurance Code and of the Health Insurance Code .
Section III
Income from Other Economic Activity
Taxable Income
Article 29. The taxable income from economic activity accruing to any natural persons who are not merchants within
the meaning given by the Commerce Act shall be determined by debiting the income acquired with operating expenses as
follows:
1. for any income from the sale of produced, processed or unprocessed agricultural products, for copyright and
licence royalties, including for income from sale of inventions, works of science, culture and art by the authors thereof: by 70
per cent;
2. for any income from the sale of produced, processed or unprocessed forestry products (including from harvesting of
wild herbs, mushrooms and berries) and from hunting ground management, as well as for any income from the sale of
produced, processed or unprocessed fisheries products: by 60 per cent;
3. for royalties for performance of performing artists, for income from the practice of a skilled craft on which a final
annual (licence) tax is not levied; for any income from the sale of grown ornamental plants: by 50 per cent;
4. for any income from the practice of a liberal profession or remunerations under non-employment relationships: by
35 per cent;
5. for any income from management and control, from participation in management and supervisory bodies of
enterprises: by 10 per cent.
Annual Taxable Amount
Article 30. The annual taxable amount shall be determined by debiting the taxable income referred to in Article 29
herein, acquired during the tax year, with the contributions which the self-insured person is obligated to make for the tax
year for his or her own account or, if the person is not self-insured, with the social insurance contributions withheld, which
are for the account of the said person, according to the procedure established by the Social Insurance Code and the Health
Insurance Act .
Section IV
Income from Rent or from Other Onerous Provision for Use of Rights or
Property
Taxable Income
Article 31. (1) The taxable income accruing from rent or from other onerous provision for use of rights or immovable
property shall be determined by debiting the income acquired with 20 per cent expenses.
(2) The payments acquired under a lease contract, which does not expressly provide for transfer of the right of
ownership to the property, shall be treated as income from rent referred to in Paragraph (1).
(3) The taxable income accruing from any payments under franchising agreements and factoring contracts, as well as
under other contracts for provision for use of rights, shall be determined according to the procedure established by
Paragraph (1).
Annual Taxable Amount
Article 32. The annual taxable amount for the income accruing to resident natural persons from rent or other onerous
provision for use of rights and property shall be determined by debiting the taxable income referred to in Article 31 herein
with the contributions which the person is obligated to make for the tax year for his or her own account according to the
procedure established by the Health Insurance Act .
Section V
Income from Transfer of Rights or Property
Taxable Income
Article 33. (1) The taxable income accruing from the sale or exchange of immovable property, including of limited
rights in rem to any such property, shall be determined by debiting the positive difference between the selling price and the
cost of acquisition of any such property with 10 per cent expenses.
(2) The taxable income shall be the positive difference between the selling price and the cost of acquisition upon sale
or exchange of:
1. means of transport by road, air and water;
2. works of art, collectors' items and antiques.
(3) The taxable income accruing from the sale or exchange of shares, interests, compensation instruments, investment
vouchers and other financial assets, as well as from trade in foreign exchange, shall be the sum total of the profits realized
during the year, determined for each particular transaction, debited with the sum total of the losses realized during the year,
determined for each particular transaction.
(4) The realized profit/loss referred to in Paragraph (3) shall be determined by debiting the selling price with the cost of
acquisition of the financial asset. Where any financial assets of one and the same type, issued by one and the same person,
have different costs of acquisition and part of the said assets is subsequently sold and it cannot be proven which part is sold,
the cost of acquisition of each such asset shall be the weighted average price determined on the basis of the cost of
acquisition of the financial assets of the same type and issuer held at the date of the sale.
(5) The selling price shall include everything acquired by the person in connection with the sale/exchange, including any
consideration other than money.
(6) The cost of acquisition referred to in Paragraphs (1), (2) and (4) shall be:
1. the documented cost of acquisition of the property;
2. the documented cost of acquisition of the property, credited with the documented payment due by the natural
person: in the cases of exchange with additional payment;
3. nil: where there is no documented cost of acquisition, including for any property acquired as a donation, or for any
shares and interests received upon distribution of property or another source of owners' equity;
4. the documented additional payment due by the natural person: in the cases of exchange with additional payment,
where there is no documented cost of acquisition of the property;
5. the portion of the non-cash contribution entered in the Memorandum of Incorporation, in the Memorandum of
Association or in the Articles of Association of a commercial corporation, corresponding to the shares and interests sold or
exchanged: in the cases of non-cash contributions made to a commercial corporation;
6. the market price referred to in Article 10 (4) herein of the property acquired upon exchange: in the cases of
sale/exchange of property acquired upon exchange;
7. the documented cost of acquisition of the property, adjusted until 1997 inclusive for the overall consumer price
index as announced by the National Statistical Institute: in the cases of sale or exchange of property acquired prior to the 1st
day of January 1998.
(7) Where the selling price referred to in Paragraph (1) is paid by installments in different tax years, the taxable income
shall be determined according to the following formula for each of the said tax years:
where:
TITY shall be the taxable income for the tax year;
SP shall be the selling price;
CA shall be the cost of acquisition;
PPR shall be the part payment received during the tax year.
(8) Where the selling price referred to in Paragraph (2) is paid by installments in different tax years, the taxable income
shall be determined according to the following formula for each of the said tax years:
where:
TITY shall be the taxable income for the tax year;
SP shall be the selling price;
CA shall be the cost of acquisition;
PPR shall be the part payment received during the tax year.
(9) The income received in connection with the provision of property under a lease contract which expressly provides
for transfer of the right of ownership to the property shall be subject to taxation notwithstanding the circumstances covered
under Article 13 herein. The taxable income shall be determined according to the following formula:
where:
TITY shall be the taxable income for the tax year;
CP shall be the price of the property as set under the contract;
CA shall be the cost of acquisition;
PR shall be the payments received during the tax year net of interest paid.
(10) The taxable income upon transfer of a sole trader's enterprise with expungement of the sole trader shall be the
positive difference between the selling price as set by the contract and the owners' equity of the enterprise.
Annual Taxable Amount
Article 34. The annual taxable amount for the income from transfer of rights or property shall be the taxable income
referred to in Article 33 herein, as acquired during the tax year.
Section VI
Income from Other Sources
Taxable Income
Article 35. The taxable income shall be the gross sum total of the taxable incomes acquired during the tax year from:
1. any compensations for lost profit and damages of such nature;
2. any cash prizes and merchandise awards awarded at competitions and contests which are not provided by an
employer or a commissioning entity;
3. any interest, including such within payments under a lease contract;
4. any producer dividends distributed by cooperatives;
5. exercise of intellectual property rights by succession;
6. all other sources which are not expressly specified in this Act and whereon final taxes are not levied according to the
procedure established by this Act or whereon final taxes are not levied according to the procedure established by the
Corporate Income Tax Act .
Annual Taxable Amount
Article 36. The annual taxable amount for the income from other sources shall be determined by debiting the taxable
income referred to in Article 35 herein, as acquired during the tax year, with the contributions which the person is obligated
to make for the tax year for his or her own account according to the procedure established by the Health Insurance Act .
PART THREE
FINAL TAXES
Chapter Six
FINAL TAX ON INCOME FROM SOURCE INSIDE AND OUTSIDE BULGARIA
Taxation of Non-resident Persons' Income
Article 37. (1) A final tax, notwithstanding the circumstances covered under Article 13 herein, shall be levied on the
following income from a source inside Bulgaria, charged/paid in favour of any non-resident natural person:
1. any compensations for lost profit and damages of such nature;
2. any scholarships for study in Bulgaria and abroad;
3. any interest payments, including interest within payments under a lease contract;
4. any income from rent or from other onerous provision for use of movable or immovable property, including any
payments under a lease contract which does not expressly provide for transfer of the right of ownership to the property;
5. any payments received under franchising agreements and factoring contracts;
6. any copyright and licence royalties;
7. any technical assistance fees;
8. any remunerations for activity performed within the territory of the country by non-resident natural persons who are
athletes, public figures, scientists, artists and cultural figures, including where the income has been paid/charged through a
third party, including where the income has been paid/charged through a third party, such as a performer-management
agency, a production company and other intermediaries;
9. any income from management and control, from participation in management and supervisory bodies of enterprises;
10. any income from sale, exchange or other onerous transfer of immovable property;
11. any payments under a lease contract which expressly provides for transfer of the right of ownership to the
property;
12. any income from sale, exchange or other onerous transfer of shares, interests, compensation instruments,
investment vouchers and other financial assets, with the exception of the income from exchange covered under Article 38
(5) herein.
(2) The final tax on the income covered under Items 1 to 9 of Paragraph (1) shall be assessed on the gross sum total
of the incomes charged/paid, and the final tax on the income referred to in Items 10, 11 and 12 of Paragraph (1) shall be
assessed on an amount equal to the taxable income as determined according to the procedure established by Article 33
herein.
(3) No final tax shall be levied on any income under Paragraph 1, exempted from taxation under Article 13 herein and
charged/paid in favour of non-resident natural persons established for tax purposes in a Member State of the European
Union, as well as in another Member State of the European Economic Area.
(4) The circumstances referred to in Paragraph (3) shall be certified to the payer of the income by a document issued
by the tax administration of the State in which the person is established for tax purposes, and by a declaration by the person
who has acquired the income, to the effect that the circumstances covered under Article 13 exist.
Income of Resident and Non-resident Natural Persons
Article 38. (1) A final tax shall be levied on the taxable income from dividends and from shares in any liquidation
surplus in favour of:
1. any resident or non-resident natural person, where accruing thereto from a source inside Bulgaria;
2. any resident natural person, where accruing thereto from a source outside Bulgaria.
(2) The final tax on any income from dividends shall be assessed on the gross amount as determined by the decision on
the distribution of dividend.
(3) The final tax on any income from dividends in the form of a hidden profit distribution shall be assessed on the gross
amount of the expenses as charged.
(4) The final tax on share in any liquidation surplus shall be assessed on the positive difference between the value of the
said share and the documented cost of acquisition of the participating interest in the company/cooperative.
(5) A final tax shall be levied on any taxable income acquired from exchange of shares and interests in connection with
transformation of commercial companies:
1. by resident natural persons upon the exchange of shares and interests in domestic commercial corporations for
shares and interests in domestic commercial corporations or in commercial corporations abroad;
2. by resident natural persons upon the exchange of shares and interests in commercial corporations abroad for shares
and interests in commercial corporations abroad or in domestic commercial corporations;
3. by non-resident natural persons upon the exchange of shares and interests in domestic commercial corporations for
shares and interests in domestic commercial corporations or in commercial corporations abroad.
(6) The taxable income referred to in Paragraph (5) shall be determined at the time of the exchange and shall be the
positive difference between the market price of the shares/interests acquired upon the exchange and the cost of acquisition
under Article 33 (6) herein of the shares or interests in the transforming corporation.
(7) The market price referred to in Paragraph (6) shall be presumed to be a cost of acquisition under Article 33 (6)
upon a subsequent sale or exchange of the shares and interests in the acquiring/newly established corporation, as well as
upon a subsequent application of Paragraph (6).
(8) A final tax shall be levied on the gross sum total of the taxable income from supplementary voluntary social
insurance, from voluntary health insurance and life assurances, acquired at the date of:
1. recovery of the amounts remitted for life assurances;
2. recovery of the amounts remitted for voluntary health insurance, with the exception of the cases of refund of
expenses on health services and provision of health services and goods to the insured person upon occurrence of the events
provided for in the contracts of health insurance;
3. receipt of the amounts remitted for supplementary voluntary social insurance prior to attainment of entitlement to
supplementary pension;
4. transfer of amounts from an individual account to the account of a third party;
5. modification of the contract of insurance, in respect of which a relief under Article 19 herein has been enjoyed, into
a contract for which the said relief may not be enjoyed;
6. drawing on the amounts under a contract for assurance for repayment of a loan, where a life assurance is used to
secure an obligation of the natural person.
(9) No final tax shall be levied on any income referred to in Paragraph (8), corresponding to the portion of the
payments/premiums for which a tax relief has not been enjoyed according to the procedure established by Article 19 herein.
(10) A final tax shall be levied on the gross amount of the income acquired by the person upon the sale or exchange of
movable property under Item 2 (d) of Article 13 (1) herein.
Chapter Seven
LEVY OF FINAL ANNUAL (LICENCE) TAX
Persons Subject to Levy of Final Annual (Licence) Tax
Article 39. (1) A final annual (licence) tax shall be levied on any natural person, including a sole trader, who carries on
any activity specified in the Annex hereto (licence activity), in respect of the income accruing from any such activity,
provided that:
1. the turnover of the person for the last preceding year does not exceed BGN 50,000, and
2. the person is not registered under the Value Added Tax Act , with the exception of registration for intra-Community
acquisition under Article 99 and Article 100 (2) of the said Act .
(2) Where, within twelve successive months, any one natural person has ceased to carry out a licence activity and/or
has formed a new enterprise which carries out a licence activity, and the aggregate turnover of the said two enterprises
exceeds BGN 50,000 for twelve successive months, Paragraph (1) shall not apply to any such enterprise. In such a case,
the newly formed enterprise shall be subject to taxation according to the standard procedure established by this Act for the
current tax year.
(3) Where, within the current tax year, the turnover of the person exceeds BGN 50,000 or the person registers under
the Value Added Tax Act , the taxable person shall be taxed according to the standard procedure established by this Act.
(4) In the cases under Paragraphs (2) and (3), the sole traders shall be obligated to make tax prepayments according
to Article 43 (5) herein for the current year as from the quarter during which the circumstances referred to in Paragraphs (2)
and (3) occurred. Any remittances made under Article 69 herein shall be treated as equivalent to tax prepayments.
(5) Any natural persons who are not sole traders, in the cases under Paragraphs (2) and (3) shall not be obligated to
make tax prepayments for the current year within the meaning given by this Act. Any remittances made under Article 69
herein shall be set off against the aggregate annual taxable amount of the person.
(6) In the cases under Paragraphs (2) and (3), the final annual (licence) tax for the current year shall be payable until
the end of the quarter preceding the quarter during which the circumstances referred to in Paragraphs (2) and (3) have
occurred.
(7) Where, within the current tax year the person deregisters under the Value Added Tax Act , the said person shall
be taxed according to the standard procedure established by this Act for the entire tax year.
Common Rules for Levy of Final Annual (Licence) Tax
Article 40. (1) A final annual (licence) tax shall be due separately for each of the activities practised according to the
Annex hereto.
(2) The persons who carry out a licence activity at more than one establishment shall be liable to tax for each
establishment separately. In such cases, the tax shall be assessed depending on the location of the establishments.
(3) The natural persons and the sole traders who carry out a licence activity which is not carried out at an
establishment shall assess the tax depending on the nucleated settlement where they have their permanent address.
(4) Where the licence activity commences or ceases in the course of the year, with the exception of the activity
specified in Items 1 and 2 of Section I of the Annex hereto, the tax shall be assessed in proportion to the number of quarters
during which the said activity is carried out, including the quarter of commencement or cessation of the said activity.
(5) Where within any single licence activity, with the exception of the activity specified in Items 1 and 2 of Section I of
the Annex hereto, any circumstance in connection with the determination of the amount of the tax changes in the course of
the year, the amount of the tax until the end of the year, including for the quarter of the change, shall be determined on the
basis of the amount of the tax determined conforming to the changes in the circumstances.
(6) Where within any single licence activity of those specified in Items 1 and 2 of Section I of the Annex hereto any
circumstance changes in the course of the year and this leads to determination of the final annual (licence) tax in a larger
amount, the larger amount of the tax, as determined conforming to the changes in the circumstances, shall be due for the tax
year.
(7) Any income accruing from any activity which is not specified in the Annex hereto shall be taxed according to the
standard procedure.
Tax Reliefs upon Levy of Final Annual (Licence) Tax
Article 41. (1) The taxable persons who are subject to levy of a final annual (licence) tax may enjoy tax relief in the
following sequence:
1. 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 final annual (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;
2. any natural persons, including any sole traders, who carry out more than one type of any licence activity of those
specified in Items 1 to 36 of Section I of the Annex hereto through work done in person throughout the tax year, shall pay
50 per cent of the final annual (licence) tax as determined for the relevant activity;
3. 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 Section I of the Annex hereto, shall pay 50 per cent of the final annual
(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;
4. any persons who use the workplace for training of apprentices within the meaning given by the Skilled Crafts Act
and who carry out a licence activity of the ones specified in Items 10, 12 and 13 of Section I of the Annex hereto, shall pay
50 per cent of the final annual (licence) tax as determined for the relevant workplace; this rebate shall be enjoyable subject
to the condition that a copy of the certificate on entry in the register of apprentices, issued by the competent regional
chamber of skilled crafts, is attached to the return referred to in Article 59 herein.
(2) Notwithstanding Article 40 (5) herein, the tax relief referred to in Item 1 of Paragraphs (1) shall be enjoyed for the
entire tax year during which the loss of working capacity occurs or the validity of the decision expires.
PART FOUR
AMOUNTS OF TAX. TAX ASSESSMENT, WITHHOLDING AND REMITTANCE. DECLARING
Chapter Eight
WITHHOLDING OF TAX PREPAYMENTS
Withholding of Tax Prepayments on Income from Employment Relationships
Article 42. (1) The tax prepayment on income from employment relationships shall be determined by the employer
monthly on the basis of the monthly taxable amount.
(2) The monthly taxable amount referred to in Paragraph (1) shall be arrived at by debiting the taxable amount referred
to in Article 24 herein, as charged for the relevant month, with:
1. the compulsory social insurance contributions, withheld by the employer, which are for the account of the natural
person, according to the procedure established by the Social Insurance Code and the Health Insurance Act ;
2. the tax relief for reduced working capacity referred to in Article 18 (2) herein;
3. the tax relief referred to in Article 19 (2) herein, where the amounts have been withheld by the employer upon
payment of the income from an employment relationship.
(3) The amount of the tax due shall be determined according to the following table:
Monthly Taxable
Amount
Tax
Lower
limit
Upper
limit
0 BGN
200
Nil
BGN
200
BGN
250
20 per cent of excess over BGN 200
BGN
250
BGN
600
BGN 10 + 22 per cent of excess over BGN 250
Above BGN 600 BGN 87 + 24 per cent of excess over BGN 600
(4) The tax referred to in Paragraph (3) shall be withheld by the employer upon the final payment of the taxable
income charged for the relevant month.
(5) Where only part payments for the relevant month or another month have been made during the relevant month, the
employer shall remit the tax referred to in Paragraph (3) determined on the gross amount of the sum total of the part
payments.
(6) The tax remitted by the employer under Paragraph (5) shall not be withheld from the part payment but shall be set
off against the tax withheld under Paragraph (4).
(7) Paragraph (5) shall not apply to part payments for the relevant month, where the full amount of the income from an
employment relationship as charged by the employer is paid until the end of the next succeeding month.
(8) The tax referred to in Paragraphs (1) to (7) shall be remitted within the time limits and according to the procedure
established by Articles 65 and 66 herein.
Tax Prepayment on Income from Economic Activity
Article 43. (1) Any person, who has acquired income from economic activity referred to in Article 29 herein, shall be
liable to make a tax prepayment when the taxable income accruing to the said person from all sources of income within the
meaning given by Article 12 herein, debited with the compulsory social insurance contributions remitted during the year,
exceeds the amount of the annual tax threshold.
(2) The tax referred to in Paragraph (1) shall be at the rate of 15 per cent of the acquired taxable income referred to in
Article 29 herein and shall be determined by:
1. the enterprises and the self-insured persons within the meaning given by the Social Insurance Code , which or who
are payers of income from economic activity;
2. the persons who have acquired the income: in the rest of the cases.
(3) In the cases referred to in Item 1 of Paragraph (2), the tax shall be withheld by the payer upon the payment of the
income.
(4) The tax referred to in Paragraph (2) shall be remitted within the time limits and according to the procedure
established by Articles 65 to 68 herein.
(5) Any persons who or which carry out economic activity in a merchant capacity within the meaning given by the
Commerce Act , including any sole traders, shall remit