panies through the sale of their shares to private persons. Municipal Companies - the above mentioned in respect of the State and the its fully or partially owned companies is accordingly relevant to the municipalities and their companies.Taxes. Bulgaria has signed agreements for avoiding double taxation with 41 countries. A company is resident in Bulgaria for tax purposes if it is registered in Bulgaria. Companies resident in Bulgaria are subject to tax on their worldwide income. Foreign entities are subject to tax on their Bulgarian-source income, but their Bulgarian branches are considered Bulgarian resident companies for tax purposes. Corporate income tax Under the Corporate Income Tax Act (CITA) states that all companies and partnerships are liable to corporate income tax. Tax on insurance and re-insurance premiums Insurance companies pay one-time final tax on insurance premiums and on any other kind of income and are not obliged to pay corporate income taxes separately for their activities other than insurance or re-insurance. The rate of the special tax for insurance companies is 7%, except for life insurance companies whose income will be taxed at 2%. Entertainment and representative expenses and business gifts, that do not bear the trademark or the business name of the company, as well as donations and sponsorships, which are not accounted for as expenses, are subject to a final 25% tax. Social expenses representing fringe benefits in kind, as well as expenses for maintenance, repair and exploitation of cars are subject to a final 20% tax. Capital gains are included in the corporate income and taxed at the full corporate tax rate. Foreign income. Income, derived outside Bulgaria by resident entities and branches of non-residents, is included in the taxable base for corporate income tax purposes. Resident entities utilize tax credit for the foreign source income, which is taxed abroad. The tax credit is limited to the amount of ...
