Payment and advance contributions of the corporate income tax
The corporate tax in Bulgaria is an annual. The law provides for payment of two types of advance contributions: monthly advance contributions and quarterly advance contributions. Exempt from advance contributions are the following classes of taxable persons:
- Taxable persons, whose net income of sales for the preceding year does not exceed BGN 300,000;
- Newly constituted taxable persons for the year of their constitution, except those newly constituted as a result of a transformation under the Commerce Act (CA). If the transformation is carried out by changing its legal form, the newly constituted entity under Art. 264 CA is subject to advance contributions under the general order.
These persons may nevertheless make quarterly advance contributions, such that in this case they would not owe interest if it appears that, in view of the profits realised, contributions would have had to be larger.
The monthly contribution for the corporate tax in Bulgaria is made by taxable persons that have incurred tax profit for the preceding year. The contribution rate for the period 01.01 - 31.03 is calculated based on the profit for the previous year. For the period until the end of the year the contribution is calculated as the estimated profit multiplied by a specific multiplier established in the State Budget Act, which reflects the changes in economic conditions for the current year.
The quarterly advance contribution is made by a taxable person that is not obliged to make a monthly such contribution, i.e. newly constituted companies during the year, as well as those operating at a loss - Art.85 „quarterly advance contributions shall be made by the taxable persons that have no obligations to make monthly advance contributions”.
The monthly advance contributions for the current calendar year are declared with the annual tax return for the preceding calendar year. The quarterly advance contributions are declared in a declaration according to a standard form within the time limit for making the first chosen advance contribution. The Bulgarian CITA provides for an opportunity to request a decrease (or as of 01.01.2013 an increase) of the contribution, if shown that the advance contributions would exceed the annual tax.
The monthly advance contributions are paid as follows:
- For January, February and March – by 15 April of the current calendar year;
- For the period April - December – by the day of the month they are paid for.
The quarterly advance contributions are payable by the 15th day of the month following the quarter they are paid for. No quarterly advance contribution is payable for the fourth quarter.
After deducting the advance contributions paid for the respective year, the taxable persons are to pay the corporate tax for the respective year no later than 31 March of the subsequent year. A taxable person that has submitted the annual tax return and annual business report by 31 March of the subsequent year electronically, and pays the corporate tax within the same time limit, is entitled to a relief of 1 per cent of the annual corporate tax due, however, this relief may not exceed BGN 1,000.