Tax on expenses

Final tax on expenses is levied on the following documentarily substantiated expenses:

  1. Hospitality expenses related to taxpayer’s operation.
  2. Social expenses provided in kind to workers, employees and individuals hired under management and control contracts. The social expenses provided in kind also include:
  • expenses for contributions (premiums) for supplementary voluntary social security, for voluntary health insurance and for life insurance;
  • expenses for food coupons.
  1. Expenses related to the exploitation of vehicles when these vehicles are used for management activity.

==> Exemption from taxation

  1. Exemption is applied to social expenses for contributions (premiums) for supplementary voluntary social security, for voluntary health insurance and for life insurance – in the amount of up to BGN 60/month for every employer, when the taxable person has no public debts that are subject to enforced collection at the time of the expenses’ incurrence.
  2. Exemption is applied to social expenses for food coupons when they do not exceed BGN 60/month for every employer, if all of the following conditions are met:
  • the agreed basic monthly remuneration of the person in the month of the coupons’ provision shall not be less than the average agreed basic remuneration of the person for the preceding three months;
  • the taxable person shall not have public liabilities subject to enforced collection at the time of the coupons’ provision;
  • the coupons shall be provided to the taxable person by a person authorized by the Minister of Finance, on the basis of a tender, to act as an operator of such activity.
  1. Exemption is applied to social expenses for transportation of workers and employees and the persons hired under a management and control contract - from their place of residence to the place of work and back.

==> Exemption is not applicable to expenses for transportation made by car or using extra bus services, except for the cases when transportation is made by car to hardly accessible and remote areas and the taxpayer cannot perform his operation without such an expense.

==> Who pays this tax?

The tax on hospitality expenses and the tax on expenses related to the operation of vehicles, when used for management activities, shall be paid by the persons subject to corporate income taxation.

Taxable persons in terms of the tax on social expenses provided in kind, pursuant to Article 204, Item 2, shall be all employers or contracting authorities under management and control contracts.

==> Legislation

The tax on expenses is regulated by the Corporate Income tax Act (CITA)Corporate Income Tax Act (CITA).

Social expenses, which are not provided in kind, and represent income of an individual, shall be levied under the terms and procedures of the Personal Income tax Act (PITA).

==> Tax rate

The rate of the tax on expenses is 10 per cent.

==> Declaring the tax

There is no special template of tax return for declaring tax on expenses. Pursuant to Art. 217, Para 1 of the CITA, the tax on expenses shall be declared with the annual tax return submitted by the taxable person.

==> Deadlines for the tax payment

The tax on expenses shall be paid by 31 March of the next calendar year.

==> Tax payment

The tax on expenses can be paid in one of the following ways:

  • via bank transfer

To state budget accounts for the respective NRA’s Territorial Directorate according to the place of registration.

See the list of bank accounts of NRA’s Territorial Directorates.

Payment can be effected from any bank by filling in a payment order (deposit slip).

  • via Internet (online payment)

Online payment requires a debit card and registration at the E-pay and the NRA websites.

See details on paying taxes and social security contributions online with a debit card.

  • by postal order for tax payment.

The postal order shall contain the address and the name of the respective Territorial Directorate (office) of the NRA, the postal code, as well as the amount due.

==> Sanctions

Where a tax due has not been paid within the specified deadline, interest shall be paid pursuant to the Interest on Taxes, Fees and other State Receivables Act.

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