Local taxes and fees
LOCAL TAXES in THE REPUBLIC OF BULGARIA
Local taxes are needed by local authorities to provide a more comprehensive and quality services and to align these services with the needs of the local population. The following local taxes are paid into the municipal budget:
- real estate tax;
- succession tax;
- donation tax;
- property acquisition tax;
- transport vehicle tax;
- patent tax;
- other local taxes stipulated by the law.
The amount of local taxes is determined by the municipal council in accordance with the Local Taxes and Fees Act (LTFA) but within fixed limits set by law by the National Assembly. By the end of the preceding year, the municipal council determines by ordinance the exact taxable amounts of the year to follow. Making changes during the year is not permissible.
Collection, deferral and reschedule
The establishment, provision and collection of local taxes is carried out by municipal staff pursuant to the procedures under TIPC. Any appeals thereto are made in the same order. The Mayor of the municipality exercises the powers of a decision-making body (Art. 152 (2) TIPC), who can even defer local taxes, and the Head of the local revenue unit in the municipality exercises the powers of a territorial director of the National Revenue Agency (NRA).
When the local tax obligation amounts to BGN 100,000 and the deferral or rescheduling is required within one year from the date of issuance of the authorization, the power to make a decision is vested in the Mayor of the municipality. In all other cases this power to defer and reschedule tax liabilities rests with the municipal council.
Permission for deferral or rescheduling of local taxes of up to BGN 30 000 for a period of one year from the date of issuance of the authorization is issued by the Mayor of the municipality.
If the tax obligation due is above BGN 30 000 or a period longer than one year is required, the authorization is issued by the Mayor after a decision is made by the municipal councilors.
LOCAL FEES in THE REPUBLIC OF BULGARIA
The local fees collectable within the territory of the Republic of Bulgaria include:
- household waste disposal,
- retail markets, wholesale markets, fairs, sidewalks, squares, and street roadways use,
- crèches, child-food kitchens, kindergartens, specialized social services institutions, camps, dormitories, and other municipal social services usage;
- technical services,
- administrative services,
- purchase of graveyard plots,
- dog ownership;
- other local fees stipulated by the law;
Method of determining the payable local fee amount
The municipal council adopts an ordinance on the determination and administration of local fees and prices for services (Art. 9 LTFA). The ordinance may contain the procedure, according to which persons not using the service during the respective year or over a period thereof shall be exempt from payment of the applicable fee. The ordinance may also exempt certain categories of persons wholly or partially from payment of certain types of fees.
Local fees are determined on the basis of the necessary logistical and administrative costs of providing the service. This procedure seeks full reimbursement of the municipality for providing the service, creating conditions for the expansion of services and increasing their quality, and last but not least, achieving greater fairness as to the determination and payment of local fees.
In exceptional cases the fee amount may not be as high as to recover the full expenses of the municipality for the provision of a particular service when the municipal council decides that this is necessary to protect the public interest.
Method of payment
Local taxes are paid in cash at the cash desks of the municipal administration, or to the relevant bank account. (Art. 2 LTFA).
Local fees are paid into a bank account, in cash or in municipal revenue stamps in accordance with the terms and conditions of the LTFA.
For non-payment of public obligations within the statutory time limits is due interest in the amount specified in the LTFA. Interest on interest on fines is not charged (Art. 175 (3) TIPC).
Place of payment
The real estate tax is paid at the municipality where the property is located in accordance with the declared data.
The tax on property acquisition by donation or consideration is paid at the municipality where the property is located and in all other cases - where the taxable person is permanently resident/has their registered office.
The tax on transport vehicles is paid into the revenue of the municipal budget where the owner that submitted the declaration is permanently resident/has their registered office, and, where no such submission is made - into the revenue of the municipality where the transport vehicle in question is registered.
The fees for the purchase of graveyard plots are collected by the relevant departments of the municipality responsible for the management of the cemeteries.
The dog ownership fee is paid to the municipality where the owner is permanently resident/has their registered office.
Violation of the LTFA provisions could lead to the imposition of a range of penalties. Failure to submit a statement of acquisition of real estate or declaring incorrect data so as to reduce the tax to a lower rate, is punishable with a fine - from BGN 10 to BGN 400 for natural persons and from BGN 100 to BGN 1,000 for legal entities.
The penalty for declaring incorrect data resulting in a tax reduction or exemption varies between BGN 50 and BGN 200 for natural persons and BGN 100 and BGN 500 for legal entities.
Concealing part of the price upon acquiring property by donation or purchase, the penalty amounts to twice the amount of the evaded tax on the concealed part.