Corporate income tax for legal entities
The article will examine the rules under the Corporate Income Tax Act (CITA) concerning the statement of the various types of taxes and the terms and conditions for their payment.
Statement and payment of corporate tax
A. Statement of corporate tax
The corporate tax is declared by 31 March of the subsequent year of its occurrence. The tax return form is to be submitted at the territorial directorate of the National Revenue Agency for registration of taxable person.
To encourage the electronic submission of documents, the legislature has provided for a preference. Taxable persons that submit an annual tax statement and annual activity report by 31 March of the subsequent year electronically and pay their corporate tax within the same time limit, enjoy a relief of 1 per cent of the annual corporate tax due, however, this relief may not exceed BGN 1,000 (Art. 92 (5) of CITA).
Tax payers need to submit an annual tax statement in a standard form. In the event that they have not been active during the year and reported no income or expenses under accounting legislation, these persons should submit the 1010a form. This form needs to only indicate demographic data and declare that they have not been active and do not owe taxes under CITA. In the latter case, an annual activity report is not required.
Under § 1, item 56 of CITA "Annual business report" is the one under Art. 20 (4) of the Statistics Act. The Statistics Act imposes an obligation on those persons who manage or represent legal entities to submit to the National Statistical Institute an annual business report containing statistical information and accounting documents. Data are also to be provided about branches, offices and other structural units of the legal persons.
In accordance with Art. 92 (6) of CITA, taxable persons need to enclose with their annual tax return proof of the amount of taxes paid abroad. This provision does not apply to profit/income from sources abroad which are exempt from double taxation by virtue of an 'exemption with progression' method stipulated in an agreement for avoidance of double taxation.
In respect of any corrections to the submitted statement filed under CITA, the principle set in Art. 104 of the Tax Procedure Code (TPC) applies, namely that after the expiration of the statutory deadline for submission of statements, it is not allowed to submit a new such statement. This means that changes in a submitted statement can be made by filing a new statement before the deadline - in this case 31 March the following year.
B. Payment of corporate tax
Taxable persons pay the corporate tax for respective year by 31 March of the subsequent year after deducting the advance contributions for the respective year (Art. 93 of CITA).
Statement and payment of tax withheld at the source
A. Statement of tax withheld at the source
The statement of tax withheld at the source is performed quarterly by the end of the month following the quarter.
Persons who are obliged to withhold and pay tax at the source under Art. 194 and Art. 195, need to delcare the due tax for the quarter through a declaration according to a form. A new addition is that the declaration is submitted for the taxes due and not the withheld and paid taxes at the source. The statement is filed with the territorial directorate of the National Revenue Agency, either by registration of the payer of the income or by the place in which the payer of the income must have registered (where the payer of the income is not subject to registration, the tax return is to be filed with the territorial directorate of the National Revenue Agency - Sofia).
Subject to statement submission are also the taxes withheld at the source on income from dividends and liquidation shares accruing to the benefit of local legal persons who are not traders.
In cases where the payer of the income is a person who is not required to withhold and remit taxes, the tax return is submitted by the income recipient until the end of the month following the quarter.
Upon the request of the person concerned, a certificate of a standard form is issued, regarding the tax paid on the income of foreign legal persons, by the territorial directorate of the National Revenue Agency in which the declaration was filed or should have been filed (Art. 201 (4) of CITA).
B. Payment of tax withheld at the source
The period for payment of the tax is until the end of the month following the quarter in which the tax liability arose (Art. 202 (1) and (2) of CITA).
The tax due is paid in the respective territorial directorate of the National Revenue Agency by registration of the payer of the income or by the place in which the payer of the income must have registered. Where the payer of the income is not subject to registration, the tax is paid in the Territorial directorate of the National Revenue Agency - Sofia (Art. 202 (3) and (4) of CITA).
Overpaid tax is recovered by the territorial directorate of the National Revenue Agency, in which the tax is payable.
It should be noted that when the tax is not withheld and paid accordingly, it is due jointly by the taxable persons of such income.
Statement and payment of the tax on expenses
According to Art. 217 (1) of CITA, the tax on expenses is stated in the annual tax statement submitted by the taxable person. The tax is payable until 31 March of the following year.
Statement and payment of Alternative Taxes
The statement and payment of this type of tax are subject to specific rules.
For the statement and payment of the tax on gambling activity - see "Taxation of the organizers of gambling games".
For the statement and submission of tax revenue budget enterprises - see "Taxation under CITA of State-budget enterprises."
For the statement and payment of tax on the activity of operation of vessels - see "Tax on the net tonnage of vessels by days of operation of the vessel."