Name of law Law amending and supplementing the law on corporate income tax bill name a bill amending and supplementing the law on corporate income tax adoption date 17/11/2010 number/year Official Gazette 94/2010 Decree No 315

On the grounds of art. 98, paragraph 4 of the Constitution of the Republic of Bulgaria

I DECLARE:

To be published in the Official Gazette the law for amendment and supplement of the WCH occurs for corporate income tax, adopted by the National Assembly of the HLI 17 November 2010.

Issued in Sofia on 24 November 2010.

The President of the Republic: Georgi Parvanov

Stamped with the State seal.

Minister of Justice: Margarita Popova

LAW

amending the WCH occurs for corporate income tax (official SG. 105 of 2006; amend., SG. 52, 108 and 110 since 2007, no. 69 and 106 since 2008 and no. 32, 35 and 95 of 2009.)

§ 1. In art. 12 make the following amendments and additions:

1. Paragraph 8 shall be replaced by the following:

(8) the following are income from a source in the country:

1. income from rent or otherwise providing for the use of real estate, including an ideal part of immovable property situated in the country;

2. income from the disposal of real property, including perfect part or limited real estate immovable property situated in the country. "

2. a new paragraph. 9:

"(9) the following income accruing from local legal entities, local sole traders or foreign legal persons and sole proprietors through a permanent establishment or a fixed base in the country for the benefit of foreign legal persons established in jurisdictions with the preferential tax regime, are from a source in the country:

1. remuneration for services or rights, except in cases where the services or rights are actually granted;

2. penalties and damages of any kind, with the exception of the benefits accrued in respect of insurance contracts. "

3. The current paragraph. 9 it al. 10.

§ 2. In art. 16, al. 2, paragraph 4, the word "payment" is replaced by "charging".

§ 3. In art. 61 item 3 shall be repealed.

§ 4. In art. 62 the following endorsements are added:

1. In paragraph 8. 1, after the word "under" insert "or" this law.

2. in the Al. 4 creating a second sentence: "the first subparagraph shall not apply where the circumstances justifying the change in value of an asset is the detection of error."

§ 5. In art. 75 is hereby amended as follows:

1. Paragraph 4 is replaced by the following:

"(4) in the detection of error relating to tax depreciable asset, asset values are changed by the procedure of art. 62. where, as a result of the bug is found that for the past year, the taxpayer should have formed a depreciable asset tax it when setting the tax financial results for previous years annual tax depreciation is recognized equal to the accounting depreciation, which would have been calculated for this asset for the relevant years, but not more than the annual tax depreciation that would have been charged If it were used the maximum annual tax depreciation rates for the years concerned. Tax depreciable asset in the second sentence is brought in tax depreciation plan on 1 January of the year of discovery of the error with your tax depreciable value accumulated depreciation and tax in the second sentence. "

2. paragraph 6 is replaced by the following:

(6) paragraphs 1 to 4 shall not apply to tax financial result and tax obligation on it for this year, of which the minala on 1 January of the year of discovery of the error has expired at least 6 years. "

§ 6. Article 79 shall be amended as follows:

"Correction of errors other than accounting errors

Art. 79. the provisions of this chapter shall apply to errors other than accounting errors, including errors in the conversion of the financial result for the purposes of determining the tax financial result. "

§ 7. In art. 89, para. 5, after the words "annual corporate tax" there shall be added "or the date of filing of the annual tax declaration in cases where tax is not due.

§ 8. In art. 92 Al is created. 6:

"(6) taxable persons apply to the annual tax declaration evidence about the amount of imported overseas taxes. The first sentence shall not apply to gains/income from abroad, the source in respect of which the agreement on the avoidance of double taxation is provided for a method of avoiding double taxation exemption with progression. "

§ 9. In art. 165 the following endorsements are added:

1. In the title and in the Al. 1, after the words "liquidation" is added "share dividend".

2. in the Al. 2 and 3, after the words "likvidacionniâ title" insert "or" dividend.

§ 10. Article 187 is repealed.

§ 11. In art. 188, para. 2, the words "and the part of the preotst″peniâ tax under art. 187, which is not translated into investment funds of cooperative unions have to invest ' shall be replaced by ' need to invest ".

§ 12. In art. 195 following amendments and supplements shall be made:

1. In paragraph 8. 1, after the words "place of business" in the country "is added and the income from a source in the country, referred to in art. 12, al. 9, foreign legal persons established in jurisdictions with the preferential tax arrangements are implemented through a place of business in the country ".

2. in the Al. 2 and 3 the words "art. 12, al. (3) and (8) "shall be replaced by" art. 12, al. 3 and para. 8, item 2. "

§ 13. In art. 200, para. 2 Add "except in the cases under art. 200.

§ 14. In chapter twenty-fifth article is created. 200:

"The rate of tax on income from interest, royalties


Art. 200. (1) tax rate of tax on income from interest, royalties is 5 per cent, when both the following conditions are met:

1. holder of income is a foreign legal person of the Member State of the European Union, or place of business in a Member State of the European Union, the non-resident legal person from a Member State of the European Union;

2. local legal person – payer of the income, or the person whose place of business in the Republic of Bulgaria is the payer of income is related with the foreign legal entity – owner of the income, or with the person whose place of business is the proprietor of the income.

(2) where the income subject to the tax rate under para. 1, is coated with a higher tax rate, the holder is entitled to request income tax refund. The refund shall be made in accordance with the procedure and within the time limits of the tax-insurance procedure code, but no later than one year from the filing of the request for recovery.

(3) paragraphs 1 and 2 shall not apply to:

1. income representing distribution of profits or the recovery of the capital;

2. income from debt-claims which entitle to participate in the debtor's profits;

3. income from debt-claims which entitle the creditor to replace his right to interest for a right to participate in the debtor's profits;

4. income from debt claims, where there is no provision for repayment of the principal or the return is after more than 50 years from the date of issuance of the debt;

5. income, representing unrecognized expenses for tax purposes of a place of business in the Republic of Bulgaria, with the exception of those referred to in art. 43;

6. the income accruing from foreign legal entity by a State which is not a Member State of the European Union, through a place of business in the Republic of Bulgaria;

7. income from transactions of which the main motive or one of the main reasons is the deviation or avoiding taxation.

(4) for the purposes of this article:

1. a foreign legal person of the Member State of the European Union, is any foreign legal person for which the following conditions are met simultaneously:

a) the legal form of a foreign legal person is in accordance with Annex No.5;

(b) the foreign legal person) is a resident for tax purposes in a Member State of the European Union, in accordance with the relevant tax legislation and under the Convention for the avoidance of double taxation with a third State is not considered to be resident for tax purposes in another country outside the European Union;

in the foreign legal person) shall be subject to any of the taxes referred to in annex No 6, without the right to exemption from taxation, or with identical or similar tax, which is imposed in addition to or in lieu of those taxes;

2. a person is a related party with a second person, if at least one of the following conditions at the time of the accrual of income:

(a)) the first person is held continuously for a period of at least two years, at least 25 per cent of the capital of the second person;

(b)) the second person is held continuously for a period of at least two years, at least 25 per cent of the capital of the first person;

in the third person), which is a legal person or a foreign resident legal person from a Member State of the European Union, is held continuously for a period of at least two years, at least 25 percent of the capital and of the first and of the second person;

3. foreign legal person is the holder of income when you receive this income to their own benefit and not as an intermediary or agent of another person;

4. place of business is the proprietor of income when both the following conditions are met:

and debt collection) the right or use of information in respect of which the interest arises or royalties, are effectively connected with that permanent establishment;

(b)) interest or royalties represent income in respect of which the place of business is taxed in the Member State of the European Union, in which it is located, with any of the taxes referred to in annex 6, or in Belgium – with the "impôt des non-résidents/belasting der niet-verblijfhouders" or in Spain – with "Impuesto sobre la Renta de no Residentes" or with an identical or similar tax that is necessary in addition to or instead of these taxes. "

§ 15. In art. 201, para. 1 the words "art. 12, al. (3) and (8) "shall be replaced by" art. 12, al. 3 and para. 8, item 2. "

§ 16. In art. 202, para. 4, the words "article. 12, al. (3) and (8) "shall be replaced by" art. 12, al. 3 and para. 8, item 2. "

§ 17. In art. 209 following amendments and supplements shall be made:

1. In paragraph 8. 1 item 4 and 5 are repealed.

2. in the Al. 3:

a) in paragraph 1 the word "some" is replaced by "any", then a comma and add "9";

b) point 4 shall be replaced by the following:

"4. provided to employers in food vouchers received individual quota for providing meal vouchers with a face value exceeding this individual quota or has provided food vouchers to individual quota."

3. Al are created. 7-9:

(7) the total annual quota for providing meal vouchers shall be approved with the law on the State budget of the Republic of Bulgaria for the year.

(8) the operator shall use the sums received from employers in their food vouchers for payment only by bank transfer with the vendors entered into a service contract with the operator, or to refund the face value of the vouchers for food brought by employers in case of withdrawing the authorisation of the operator.


(9) an operator shall conclude service contracts only with suppliers who are registered for value added tax act. "

§ 18. In art. 255 following amendments and supplements shall be made:

1. The current text becomes paragraph 1 and in it:

a) in paragraph 2, the words "or operated ships on the basis of the management contracts" shall be deleted;

(b)) in item 5, the words "the Bulgarian flag or flag" are replaced by "Bulgarian flag or flag";

in t is created) 6:

6. conduct their business in accordance with the requirements of international conventions and the law of the European Union on the safety and security of navigation, protection of the environment from pollution from ships and shipboard living and working conditions on board the ship. "

2. a para. 2:

(2) taxable persons pursuant to this chapter and the persons carrying out maritime commercial shipping, when ships operated on the basis of contracts for management and simultaneously meet the following requirements:

1. the conditions for them are under par. 1, item 1, 5 and 6;

2. more than half of the administrative staff of the coastal or crew is composed of Bulgarian citizens or nationals of the other Member States of the European Union or the European economic area;

3. at least two-thirds of the tonnage of the ships managed be managed by companies which are resident for tax purposes of a Member State of the European Union or of another State party to the agreement on the European economic area. "

§ 19. Article 275 is repealed.

§ 20. (A) article 277 shall be replaced by the following:

"Art. 277. (1) a person who supplied the food vouchers to employers received individual quota, with a nominal value exceeding this individual quota, shall be punished with the penalty payment in the amount of the excess of the nominal value of the meal vouchers to employers in the resulting individual quota above that individual quota, but not less than $ 2,000.

(2) a person who provided food vouchers to employers without has received individual quota, shall be punished with the penalty payment in the amount of the nominal value of the meal vouchers to employers, but not less than $ 2,000. "

§ 21. Art is created. in: 277

"Art. 277. the operator of a food vouchers, which does not fulfill the requirements of art. 209, para. 8 for payments in connection with the submitted vouchers for food, shall be punished with the penalty payment in the amount of 10 000 to 15 000 BGN, and for repeated infringement – 20 000 to 30 000 LEVs. "

§ 22. In § 1 of the additional provisions are made the following amendments and additions:

1. In paragraph 35, the words "an Ordinance of the Minister of finance" shall be replaced by "Decree of the Minister of labour and Social Affairs and the Minister of finance".

2. In point 41 creates a letter "e":

"e) activities under the management of ships on the basis of the management contracts under art. 225 a, items 1-7, 9 and 10 of the code of commercial navigation. "

3. Create t. 61-64:

"61." total annual quota for the provision of vouchers for food "is the total face value of the vouchers for food for the year in which operators can provide the employers under the conditions of art. 209.

62. "individual quota to provide vouchers for food" is the nominal value of the vouchers for food, which the operator may provide the employers under this quota.

63. "the maximum annual tax depreciation rates" for the purposes of art. 75, para. 4 are the maximum dimensions of the annual tax depreciation rates in accordance with art. 55 or the maximum dimensions of the depreciation norms according to art. 22 of the revoked law for corporate income tax for the years before 2007.

64. "Jurisdictions with preferential tax arrangements" are:

1. Virgin Islands (United States); The Principality Of Andorra; Anguilla (British); Channel Islands (Brit.); Antigua and Barbuda; Aruba Island (niderl); The Commonwealth of the Bahamas; Barbados; Belize; Bermuda (British); Virgin Islands (Brit); The Republic Of Vanuatu; Gibraltar (British); Grenada; Guam, Island (United States); Cooperative Republic of Guyana; The Dominican Republic; Cayman Islands (Brit.); Christmas Island (Christmas Island) (Brit.); The Republic Of Liberia; The Principality Of Liechtenstein; The Republic Of Maldives; The Republic of the Marshall Islands; The Republic Of Mauritius; Principality of Monaco; Montserrat, Island (Britt.); The Republic Of Nauru; Niue Island (novozel); The Republic Of Palau; Cook Islands (novozel); Isle of man (British); Saint Lucia; The Federation of Saint Kitts and Nevis; Turks and Caicos Islands (Brit.); The Republic Of The Fiji Islands; The Republic Of Panama; Independent State of Samoa; The Republic Of San Marino; The Republic Of Seychelles; Solomon Islands; Saint Vincent and the Grenadines; The Kingdom Of Tonga; The Republic of Trinidad and Tobago; Tuvalu; Falkland Islands (Brit.); Netherlands Antilles (niderl) and Hong Kong (China), or

2. countries/territories, with which the Republic of Bulgaria no final agreement on the avoidance of double taxation and in which the income or corporation tax or income taxes representing them under art. 12, al. 9 or under art. 8, al. 11 of the Act on income tax of individuals that the foreign person had or will implement, with more than 60 percent lower than the income or corporation tax on such income in the Republic of Bulgaria. "

§ 23. In § 2 of the supplementary provisions, the Union "and" shall be replaced by a comma and add "and of Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States".

§ 24. Established Annex 5 and annex 6:


"Annex 5 to the art. 200 a, para. 4, paragraph 1, subparagraph (a)

List of foreign legal persons in the Member States of the European Union, under art. 200 a, para. 4, paragraph 1, subparagraph (a)



Note: see annex in PDF-and the number

Annex No 6 to art. 200 a, para. 4, paragraph 1 (c) and item 4 (b) list of taxes in the Member States of the European Union, under art. 200 a, para. 4, paragraph 1 (c) and item 4 (b)



Note: see annex in PDF-and the number



Transitional and final provisions

§ 25. Retention of the right of disposal of the tax under art. 185, para. 1 and 2 shall apply until 31 December 2013.

§ 26. (1) the cooperatives and undertakings transferred 50 percent of income tax preotst″peniâ for 2010 under the revoked art. 187 in investment funds of cooperative unions by 31 March 2011.

(2) the cooperative unions reported by 30 June 2011, in front of the Ministry of finance recruitment and target the acquittal of preotst″peniâ income tax for 2010 under the revoked art. 187. where it is established that the conditions are not fulfilled for divestment, post″piliât in cooperative unions ceded tax shall be refunded by them in the State budget with the corresponding interest.

(3) a person who does not fulfil his obligation under paragraph 1. 2 shall be punished by a penalty payment in the amount of 1000 to 3000 BGN.

§ 27. Article 22, paragraph 2 shall apply in determining the tax under this Act for 2010.

§ 28. In the tax-insurance procedure code (official SG. 105 by 2005; amend., SG. 30, 33, 34, 59, 63, 73, 82, 86, 95 and 105 of 2006, issue 46, 52, 57, 59, 108 and 109 in 2007, 36/69 and 98 in 2008, issue 12, 32, 41 and 93 from 2009 and no. 15 of 2010) the following amendments and supplements shall be made :

1. an art. 136:

"Holder (beneficiary) of income

Art. 136. (1) a foreign person is the holder of income when:

1. has the right to dispose of income and to evaluate its use and bear the whole or a substantial part of the risk of the activity from which the income is realized, and

2. does not act as a company to target income.

(2) a company to target income is a company, which is controlled by persons who would not have the same type and size reductions if the income earning is directly from them, and does not pursue economic activities outside the ownership and/or administration of rights or assets from which the income is realized and the company:

1. does not have any assets, capital or personnel corresponding to its business activities, or

2. has no control over the use of the rights or assets from which the income is realized.

(3) the company is not targeting non-resident's income, when more than half of its shares with voting rights are traded on a regulated market. "

2. In art. 175, para. 2, item 2, the words ' until 31 December of the year concerned "shall be replaced by ' as from the date on which the advance payment is required up to the earliest of:

a) date of submission of advance payment;

(b) the date of submission) of tax, in respect of which the advance payment is due or the date of the filing of the tax return for him in cases where tax is not due;

in) the date of expiry of the period laid down in the law deadline for tabling of the tax in respect of which the advance payment is due. "

§ 29. In the accounting Act (promulgated, SG. Since 2001, 98; amend., SG. 91 of 2002, no. 96 of 2004 No. 102 and 105 by 2005, issue 33, 63, 105 and 108 of 2006, 57/2007, no. 50, 69 and 106 in 2008 and 95/2009) the following amendments and supplements shall be made :

1. In art. 7, para. 1 item 5 is repealed.

2. Article 8 is repealed.

3. In art. 26:

a) a new para. 5:

"(5) enterprises, implementing a streamlined form of financial reporting that prepare and submit annual financial statements on the basis of the national financial reporting standards for small and medium-sized enterprises, may not produce a cash flow statement and statement of equity.";

(b)) the previous para. 5 and 6 become Al respectively. 6 and 7.

4. In art. 42, para. 2 the word "undertaking" is replaced by "another undertaking".

5. § 1, item 6, third sentence, the words "of the additional provisions drawn up or approved by the Council on international accounting standards (International Accounting Standards Board (IASB)" shall be replaced by ' adopted by the European Commission in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards ".

§ 30. Paragraph 29, point 3 shall also apply in respect of the annual financial statements for 2010.

§ 31. The law shall enter into force on 1 January 2011, with the exception of § 22, paragraph 2, which shall enter into force on the day of its publication in the Official Gazette.

The law was adopted by 41-Otto National Assembly on 17 November 2010 and is stamped with the official seal of the National Assembly.

President of the National Assembly Tsetska Tsacheva:

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