Name of law tax law on insurance premiums Named Bill a Bill to tax on insurance premiums, acceptance date 20/10/2010 number/year Official Gazette Decree No 86/2010 295

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 on tax on insurance premiums, adopted by the National Assembly of the HLI 20 October 2010.

Issued in Sofia on 27 October 2010.

The President of the Republic: Georgi Parvanov

Stamped with the State seal.

Minister of Justice: Margarita Popova

LAW

a tax on insurance premiums

Chapter one

GENERAL PROVISIONS

The subject of the law

Art. 1. This law governs the taxation on insurance premiums, hereinafter referred to as "tax".

Object of taxation

Art. 2. A tax levied on insurance premiums on the taxable insurance contracts, the risks to which they are borne by insurers.

 Taxable persons

Art. 3. (1) the taxable persons are:

1. insurers;

2. tax representatives – in cases where such are determined by the order of art. 19.

(2) in the case of the transfer of an insurance portfolio, under the conditions and pursuant to the insurance code a taxable person for the transferred taxable insurance contracts into account the accepting Office is an insurer. When an insurer is an insurer into account the accepting Office under art. 8, al. 1, item 2 of the insurance code running under conditions of freedom to provide services, and has appointed a tax representative in accordance with art. 19, the taxable person's tax representative.

(3) taxable persons declare and import tax.

Taxable insurance contract

Art. 4. Taxable insurance contract is any insurance contract that the insurance premium is not released by the order of art. 5 of the tax and that the Republic of Bulgaria is the Member State in which the risk is situated.

Insurance premiums, tax exempt

Art. 5. The tax is not levied on insurance premiums for the following insurance contracts:

1. contracts for reinsurance and retrocession;

2. the treaties of annex 1, section I, to the insurance code;

3. contracts for the insurance of goods during international transport of annex I, section II (a), point 7 to the insurance code, when the start or end point of the shipment is outside the territory of the Republic of Bulgaria;

4. insurance contracts from Annex 1, section II, paragraph (a), item 5, 6, 11 and 12 to the insurance code.

Exchange of information

Art. 6. The financial supervision Commission shall notify the National Revenue Agency for insurance under art. 8, al. 1, item 2 of the insurance code, expressed their intention to conduct business under the right of establishment or the freedom to provide services.

Chapter two

THE DETERMINATION OF THE TAX

Chargeable event

Art. 7. (1) the Tax event was the receipt of the insurance premium of the insurer concluded taxable insurance contract.

(2) when a deferred payment of the insurance premium each receiving part of the insurance premium is considered separately chargeable event.

(3) the tax event shall occur on the date on which the insurer receives the insurance premium.

(4) when the taxable insurance contract is concluded through the intermediary of an insurance intermediary, the chargeable event shall occur on the date on which the insurer receives the insurance premium of the insurance intermediary.

(5) On receipt of the insurance premium is considered and offsetting of insurance premium payable against the settlement of cross-obligations of the insurer to the insured. In this case, the chargeable event shall occur on the date of the interception or the payment of the obligation.

(6) the Tax event occurs and when the reimbursement of bonuses and rebates on the insurer's taxable insurance contract. In this case, the chargeable event shall occur on the date of receipt or the interception of bonuses and discounts from the insurer.

(7) the tax shall become chargeable on the date of occurrence of the tax event.

Tax base

Art. 8. (1) the tax base is the insurance premium received by the insurer as taxable insurance contract.

(2) when a deferred payment of the insurance premium tax base obtained by the insurer is part of the insurance premium.

(3) the tax base shall be increased by the restored the insurer's bonuses and discounts on taxable insurance contract.

(4) the tax base shall be reduced by the amount of the insurance premium:

1. The guarantee fund under art. 287 of the insurance code;

2. The Fund for the provision of insurance claims under art. 311 e of the insurance code;

3. the State Fund "Agriculture" under art. 14, para. 1, item 3 of the law on support to farmers.

(5) in the taxable amount does not include bonuses and discounts provided by the insurance premium, the insured when they are presented with the payment of the insurance premium.

(6) where the insurance premium or a part thereof is received in foreign currencies, bonuses and rebates respectively under para. 3 have been restored in a foreign currency, the tax base shall be determined on the basis of the equivalent in LEVs of this currency at the rate announced by the National Bank on the date of occurrence of the tax event.

Tax rate

Art. 9. The tax rate is 2 percent.


Determining the amount of the tax

Art. 10. (1) the amount of the tax is determined as the taxable amount shall be multiplied by the tax rate.

(2) the tax shall be indicated in the insurance contract separately from the insurance premium and the insurer of the total amount.

Tax period

Art. 11. The tax period for determining the tax payable is the calendar month.

Tax due for the tax period

Art. 12. (1) The tax for the reporting period is the difference between the total amount of tax that is required by the insurer for the reporting period, and the total amount of the tax on insurance premiums were returned during that tax period.

(2) the total amount of the tax on insurance premiums were returned during the reporting period is determined by the amount of insurance premiums levied already returned during this tax period, shall be multiplied by the tax rate.

(3) where the total amount of the tax on insurance premiums were returned during the tax period exceeds the total amount of tax that is required by the insurer for this tax period, the excess shall be deducted from the tax due for the next tax periods.

Accounting

Art. 13. tax payers are required to keep detailed accounting records and to store information, sufficient for the establishment of their duties under this Act by the revenue bodies.

Chapter three

DECLARATION, FILING AND TAX REFUND

 The tax declaration

Art. 14. (1) taxable persons shall submit a tax declaration form for the previous calendar quarter by the end of the month following the quarter.

(2) Tax representatives and insurers under art. 8, al. 1, item 2 of the insurance code, working under conditions of freedom to provide services, in cases where a tax representative have not designated under art. 19, submit a one-time income tax return and form the first tax period for which the tax is due by the end of next month.

(3) the tax returns are submitted to the territorial Directorate of the National Revenue Agency by the registration of a taxable person.

(4) Samples of the tax returns shall be approved by an order of the Minister of finance and shall be published in the Official Gazette.

Introduction of tax

Art. 15. (1) The tax for the tax period shall be paid monthly by taxable persons by the end of next month.

(2) The tax is paid to the revenue of the State budget on account of the territorial Directorate of the National Revenue Agency by the registration of a taxable person.

(3) The tax is deemed to be paid on the date on which the amount was received in the State budget to the account of the respective territorial Directorate of the National Revenue Agency.

Tax refund

Art. 16. (1) upon return of already taxed insurance premium or a part thereof, the insurer reimburses the insured and tax.

(2) the amount of tax subject to reimbursement under para. 1, is determined by the return premium is multiplied by the tax rate.

(3) the tax shall, subject to recovery, recovers simultaneously with the return of the insurance premium or part of it.

Interest on arrears

Art. 17. For unpaid within due tax due plus interest in accordance with the law on interest on taxes, fees and other governmental charges.

Correction of errors in the Declaration

Art. 18. (1) errors in tax returns submitted under art. 14 shall be adjusted in accordance with para. 2 and 3.

(2) the errors identified by the expiry of the time limit for filing the tax declaration shall be adjusted in accordance with art. 104 of the tax-insurance procedure code.

(3) the errors identified after the expiry of the time limit for filing the tax declaration shall be adjusted in the tax return for the tax period, during which they are established.

Chapter four

TAX REPRESENTATIVE

Determination of tax representative

Art. 19. (1) an insurer under art. 8, al. 1, item 2 of the insurance code running under conditions of freedom to provide services may designate a tax representative.

(2) a tax representative of the insurer under para. 1 can only be legally capable natural person domiciled or resident in the country, or local entity, which is not in liquidation and is not declared insolvency and not exigible and unpaid tax liabilities and obligations for insuring instalments collected by the National Revenue Agency.

(3) the tax representative represents the insurer in al. 1 in all its tax legal relationships arising on the basis of this law.

(4) upon termination of the face – a tax representative, or on the occurrence of other circumstances which result in that person being unable to perform his duties under this Act, the insurer under para. 1 may set new tax representative. The determination of the new tax representative tax liable person's insurer under para. 1.

(5) a Tax representative shall be jointly and severally responsible and unlimited for obligations of the insurer under this Act under para. 1, which is.

(6) the registration of the tax representative, and in cases where there is no tax representative – of the insurer under para. 1 shall be made in accordance with art. 82 of the tax-insurance procedure code in the competent territorial Directorate of the National Revenue Agency under art. 8 of the same code on the basis of the tax declaration under art. 14, para. 2.

Chapter five


ADMINISTRATIVE PENAL PROVISIONS

Art. 20. (1) a taxable person who does not file a declaration under art. 14, not pass it within a time limit not indicated or false data or indicate the circumstances leading to the determination of tax due to a smaller size, shall be punished with fine – for the natural persons, or with proprietary sanction – for the legal persons in size from 500 to 2000 BGN.

(2) in the event of a repeated offence under subsection. 1 the amount of the fine or penalty is proprietary from 1000 to 4000 EUR

Art. 21. (1) an insurer that does not indicate the tax in the insurance contract in accordance with the requirements of art. 10, para. 2 shall be punished by a penalty payment in the amount of 500 to 2000 BGN.

(2) in the event of a repeated offence under subsection. 1 the amount of the pecuniary sanction is of 1000 to 4000 EUR

Art. 22. (1) the acts establishing the infringements shall be drawn up by the bodies of the National Revenue Agency, and the penal provisions shall be issued by the Executive Director of the national revenue agency or an official authorised by him.

(2) the establishment of violations, the issue, the appeal and the implementation of the penal provisions shall be carried out in accordance with the law for the administrative offences and sanctions.

ADDITIONAL PROVISION

§ 1. Within the meaning of this law:

1. "insurer" is that under art. 8, al. 1 of the insurance code.

2. "insurance premium" is the agreed amount in the insurance contract, the insurer which is paid as a cost against the risks incurred by him for the duration of the insurance contract. Are not considered part of the insurance premium paid to the insurer's interest and penalties that have obezŝetitelen character.

3. "reinsurance contract" means a contract under which a reinsurer under art. 8, al. 2 of the insurance code or an insurer, acting under the terms of art. 9, para. 2, first sentence, of the insurance code, taking all or part of the risks covered by the insurer, reinsurer or the other against ceding insurance premium.

4. "retrocession contract" is the contract under which the risk has been transferred, by reinsurance contract, to another reinsurer or insurer who carries out active reinsurance.

5. "Member State where the risk is situated ' means that under § 1, item 22 of the additional provisions of the insurance code.

6. "bonuses and discounts" for the purposes of art. 7, para. 6 and art. 8, al. 3 have recovered the insurer's bonuses and rebates that are submitted by him to the insured at the conclusion of the insurance contract as a reduction of the insurance premium and which are received or intercepted by the insurer due to nesb″dvane of the conditions under which they were supplied.

TRANSITIONAL AND FINAL PROVISIONS

§ 2. Article 10, para. 2, art. § 3 and 21, paragraphs 1 and 2 shall not apply to insurance contracts concluded before the entry into force of the law.

§ 3. In the insurance code (promulgated, SG. 103 from 2005; amend. and Suppl., no. 105 by 2005, issue 30, 33, 34, 54, 59, 80, 82 and 105 of 2006, issue 48, 53, 97, 100 and 109 from the 2007 No. 67 and 69 by 2008, 24 and 41/2009 and no. 19, 41 and 43 of the 2010) is hereby amended as follows :

1. In art. 287, para. 3, fourth sentence, the words "may be specified" be replaced by "States".

2. In art. 311 and, al. 4, second sentence, the words "may be specified" be replaced by "States".

3. § 1 of the additional provisions:

a) point 15 is replaced by the following:

"15." Establishment in a Member State "is the registered office, agency or branch of a legal entity, including any permanent presence of an entity in the territory of a Member State, even if that presence does not take the form of an agency or branch, and through the permanent Office, run by its own staff of the legal person or by a person who is independent but has permanent authority to act on behalf of the legal person.";

(b) in paragraph 22) point (d) shall be replaced by the following:

"d) in all other cases, the risk is located in:

AA) the Member State where the residence of the insured if the insured is an individual, or

BB) the Member State in which the legal entity is established, the insurance contract, if the insured is a legal person ".

§ 4. The law shall enter into force on 1 January 2011.

The law was adopted by 41-Otto National Assembly on 20 October 2010 and is stamped with the official seal of the National Assembly.

President of the National Assembly Tsetska Tsacheva:

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