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Law in Bulgaria - Legislation articles info@ooyes.net (Web Design and Outsourcing) Content Menagement System Ooyes CMS (http://www.ooyes.net) http://www.rssboard.org/rss-specification Sat, 06 Jun 2020 14:31:03 +0000 61 info@solicitorbulgaria.com (SolicitorBulgaria) Copyright Solicitorbulgaria.com - SOLICITOR LTD Legal articles and news about Bulgarian Law and Business - Legislation articles http://web.solicitorbulgaria.com/index.php Bulgarian Corporate Income Tax Act, part 3 info@solicitorbulgaria.com (SolicitorBulgaria) Chapter Twenty-NineTAXABLE AMOUNTTaxable Amount for Tax on Entertainment ExpensesArticle 211. The taxable amount for assessment of the tax on expenses referred to in Item 1 of Article 204 herein shall be the expenses charged for the relevant month.Taxable Amount for Tax on Fringe Benefit Expenses Provided in KindArticle 212. The taxable amount for assessment of the tax on expenses referred to in Item 2 of Article 204 herein shall be the expenses on fringe benefits provided in kind debited with the income related to the said expenses for the relevant month.Taxable Amount for Tax on Fringe Benefit Expenses on Contributions(Premiums) for Supplementary Social Insurance and Life AssuranceArticle 213. (1) The taxable amount for assessment of the tax on expenses referred to in Item 2 (a) of Article 204 herein shall be the excess of the said expenses over BGN 60 per month per hired person.(2) Where the taxable persons incur any coercively enforceable public obligations at the time of charging… For more information visit http://www.solicitorbulgaria.com id: 332 Chapter Twenty-NineTAXABLE AMOUNTTaxable Amount for Tax on Entertainment ExpensesArticle 211. The taxable amount for assessment of the tax on expenses referred to in Item 1 of Article 204 herein shall be the expenses charged for the relevant month.Taxable Amount for Tax on Fringe Benefit Expenses Provided in KindArticle 212. The taxable amount for assessment of the tax on expenses referred to in Item 2 of Article 204 herein shall be the expenses on fringe benefits provided in kind debited with the income related to the said expenses for the relevant month.Taxable Amount for Tax on Fringe Benefit Expenses on Contributions(Premiums) for Supplementary Social Insurance and Life AssuranceArticle 213. (1) The taxable amount for assessment of the tax on expenses referred to in Item 2 (a) of Article 204 herein shall be the excess of the said expenses over BGN 60 per month per hired person.(2) Where the taxable persons incur any coercively enforceable public obligations at the time of charging of the expenses, the taxable amount for assessment of the tax on expenses shall be the full amount of the expenses charged.Taxable Amount for Tax on Fringe Benefit Expenses on Food VouchersArticle 214. (1) The taxable amount for assessment of the tax on expenses referred to in Item 2 (b) of Article 204 herein shall be the excess of the said expenses over BGN 40 per month per hired person.(2) Where the conditions for exemptions from tax under Article 209 herein are not fulfilled, the taxable amount for assessment of the tax on expenses shall be the full amount of the expenses charged.Taxable Amount for Tax on Expenses Related to Maintenance, Repair andOperation of Means of TransportArticle 215. (1) The taxable amount for assessment of the tax on expenses referred to in Item 3 of Article 204 herein shall be the expenses on maintenance, repair and operation of means of transport, charged during the calendar month, debited with the income charged from insurance benefits associated with the means of transport, up to the amount of the expenses on repair incurred whereto the benefit applies.(2) Where means of transport are used concurrently to carry out activity as a regular business and to service management operations, upon determination of the taxable amount referred to in Paragraph (1):1. the expenses on operation shall relate to the management operations on the basis of the total kilometres covered for the said operations during the current month;2. the expenses on maintenance and repair shall relate to the management operations on the basis of the kilometres covered for the said operations in relation to the total kilometres covered by the relevant means of transport during the last preceding twelve months, including the current month.(3) Where the taxable amount referred to in Paragraph (1) is a negative quantity, it shall be deducted successively from the taxable amount for the succeeding months.Chapter Thirty(Heading amended, SG No. 110/2007, effective 1.01.2007) RATE OF TAX, DECLARING AND REMITTANCE OF TAX ON EXPENSESRate of TaxArticle 216. The rate of the tax on expenses referred to in Article 204 herein shall be 10 per cent.Tax Declaring and Remittance(Heading amended, SG No. 110/2007, effective 1.01.2007) Article 217. (1) (New, SG No. 110/2007, effective 1.01.2007) The tax on expenses shall be declared by the annual tax return submitted by the taxable person.(2) (Redesignated from Article 217, SG No. 110/2007, effective 1.01.2007) The tax on expenses shall be remitted on or before the 15th day of the month next succeeding the month in which the expense was charged. Where the taxable person has overremitted any tax on expenses or any corporation tax, the said tax may be deducted from the tax on expenses due.PART FIVEALTERNATIVE TAXESChapter Thirty-OneGENERAL DISPOSITIONSAlternative TaxArticle 218. (1) The taxable persons specified in this Part shall be liable, instead of corporation tax, to an alternative tax in respect of the activities specified in this Part.(2) In respect of all other activities, the persons referred to in Paragraph (1) shall be liable to corporation tax, with the exception of public-finance enterprises.Chapter Thirty-TwoTAX ON GAMBLING ACTIVITYSection IGeneral DispositionsRecord-keepingArticle 219. (1) The taxable persons under this Chapter shall be obligated to keep daily and monthly records of the amounts received and paid for participation in the games of chance in standard forms as endorsed by the Minister of Finance.(2) Paragraph (1) shall not apply:1. to the gambling activity specified in Section V herein;2. to any games of chance where the value of the bet consists in an increased charge for a telephone or another telecommunication link;3. where a computer system has been provided for monitoring the drawings and the proceeds in the conduct of the games, as well as for control on the formation and distribution of profits, ensuring the transmission of the requisite data to the National Revenue Agency.(3) The tax on the ancillary and auxiliary activities, within the meaning given by the Gambling Act , shall be declared by an annual tax return in a standard form, which shall be submitted not later than the 31st day of March of the next succeeding year to the National Revenue Agency territorial directorate exercising competence over the place of registration of the taxable person.Section IITax on Gambling Activities of Toto and Lotto, Betting on Outcome ofSports Competition and Uncertain EventsGeneral DispositionsArticle 220. The gambling activities of toto and lotto, betting on the outcome of a sports competition and uncertain events shall attract a tax on gambling activity which shall be final.Taxable PersonsArticle 221. Taxable persons under this Section shall be the organizers of the games of chance of toto and lotto, betting on the outcome of a sports competition and uncertain events.Taxable AmountArticle 222. The taxable amount for assessment of the tax on gambling activity under this Section shall be the value of the bets taken for each game.Rate of TaxArticle 223. The rate of tax on gambling activity under this Section shall be 10 per cent.Declaring of TaxArticle 224. The tax on gambling activity under this Section shall be declared prior to determining the results of each game by means of a tax return in a standard form.Tax RemittanceArticle 225. The tax on gambling activity under this Section shall be remitted:1. in respect of games conducted daily: within three business days after determining the results for the last preceding seven calendar days;2. in respect of games conducted over a period not exceeding seven days: within three business days after determining the results but before determining the results of the next succeeding game;3. in respect of games conducted over a longer period: within seven days after determining the results.Income from Ancillary and Auxiliary ActivitiesArticle 226. (1) Any income accruing from ancillary and auxiliary activities within the meaning given by the Gambling Act shall attract an alternative tax on the value of the said income at the rate of 10 per cent.(2) The tax shall be remitted on or before the 15th day of the month next succeeding the month of charging of the income referred to in Paragraph (1).Section IIITax on Gambling Activity of Lotteries, Raffles and Bingo and KenoNumbers LotteriesGeneral DispositionsArticle 227. The gambling activity of lotteries, raffles and bingo and keno numbers lotteries shall attract a tax on gambling activity which shall be final.Taxable PersonsArticle 228. Taxable persons under this Section shall be the organizers of the games of chance: lotteries, raffles, and bingo and keno numbers lotteries.Taxable AmountArticle 229. The taxable amount for assessment of the tax on gambling activity under this Section shall be the nominal value of the bet as specified in coupons, cards, tickets or other tokens certifying participation.Rate of TaxArticle 230. The rate of tax on gambling activity under this Section shall be 12 per cent.Declaring of TaxArticle 231. The tax on gambling activity under this Section shall be declared monthly, on or before the 10th day of the next succeeding month, by means of a return in a standard form.Tax RemittanceArticle 232. (1) The tax on gambling activity under this Section shall be remitted prior to receiving the tokens certifying participation or to effecting the importation of any such tokens.(2) The enterprises designated by the Minister of Finance or by another authority specified by a law, which print tokens certifying participation or which effect the importation thereof, shall provide the tokens certifying participation solely upon presentation of documents on tax paid.Refund of TaxArticle 233. (1) Any tax paid on any unused tokens shall be refunded by the National Revenue Agency territorial directorate exercising competence over the place of registration of the person:1. after completion of each stage (drawing) of the periodic lottery games, or2. when the activity of the organizer has been discontinued in pursuance of Article 81 (2) of the Gambling Act.(2) The unused tokens certifying participation, as well as the decision on discontinuance of the activity in the cases referred to in Item 2 of Paragraph (1), shall be attached to the claim for refund under the Tax and Social-Insurance Procedure Code.Income from Ancillary and Auxiliary ActivitiesArticle 234. (1) Any income accruing from ancillary and auxiliary activities within the meaning given by the Gambling Act shall attract an alternative tax on the value of the said income at the rate of 12 per cent.(2) The tax shall be remitted on or before the 15th day of the month next succeeding the month of charging of the income referred to in Paragraph (1).Section IVTax on Gambling Activity of Games where Value of Bet Consists inIncreased Charge for Telephone or Another Telecommunication LinkGeneral DispositionsArticle 235. The gambling activity of games where the value of the bet consists in an increased charge for a telephone or another telecommunication link shall attract a tax on gambling activity which shall be final.Taxable PersonsArticle 236. Taxable persons according to the procedure established by this Section shall be the organizers of the games of chance where the value of the bet consists in an increased charge for a telephone or another telecommunication link.Taxable AmountArticle 237. The taxable amount for assessment of the tax under this Section shall be the increase in the charge for the telephone or telecommunication link.Rate of TaxArticle 238. The rate of tax under this Section shall be 12 per cent.Declaring of Bets Made and of TaxArticle 239. (1) The organizer of the game of chance shall declare the bets made and the tax under this Section to the National Revenue Agency territorial directorate exercising competence over the place of registration of the said organizer on or before the 20th day of the month next succeeding the month of conduct of the games, by means of a return in a standard form.(2) The telephone or telecommunication network operator shall declare the bets made and the tax under this Section to the National Revenue Agency territorial directorate exercising competence over the place of registration of the said operator on or before the 20th day of the month next succeeding the month of conduct of the games, by means of a return in a standard form.Tax RemittanceArticle 240. (1) The tax on gambling activity under this Section shall be withheld and remitted by the licensed telephone or telecommunication network operator on or before the 20th day of the month next succeeding the month of conduct of the games.(2) The telephone or telecommunication network operator shall be obligated to satisfy itself that the organizer of the game of chance has obtained authorization from the State Commission on Gambling and to present to the National Revenue Agency territorial directorate the contract where under the said operator takes the bets, incorporating a clause on the increase in the charge for the telephone or telecommunication link.Income from Ancillary and Auxiliary ActivitiesArticle 241. (1) Any income accruing from ancillary and auxiliary activities within the meaning given by the Gambling Act shall attract an alternative tax on the value of the said income at the rate of 12 per cent.(2) The tax shall be remitted on or before the 15th day of the month next succeeding the month of charging of the income referred to in Paragraph (1).Section VTax on Gambling Activity Using Gambling DevicesGeneral DispositionsArticle 242. The gambling activity using gambling slot-machines, devices for betting on the results of horse or dog races, roulettes and other gambling devices in a gambling casino, shall attract a tax on gambling activity which shall be final.Taxable PersonsArticle 243. Taxable persons under this Section shall be the organizers of games of chance played on gambling slot-machines, devices for betting on the results of horse or dog races, roulettes and other gambling devices in a gambling casino.Tax AssessmentArticle 244. The tax under this Section shall be assessed in respect of the devices entered in the authorization and operated:1. gambling slot-machines, respectively each player's place at such machines;2. devices for betting on the results of horse or dog races;3. roulettes at a casino, gambling tables and in respect of other gambling devices at a casino.Amount of TaxArticle 245. (1) The amounts of the tax on gambling activity under this Section are set as follows:1. in respect of a gambling slot-machine, respectively, each players' place at such a machine: BGN 300 per quarter;2. in respect of a facility for betting on the results of horse or dog races: BGN 300 per quarter for each device;3. in respect of roulette at a casino per gambling table: BGN 18,000 per quarter for each device;4. in respect of any other gambling device at a casino: BGN 3,000 per quarter for each device.(2) No tax shall be due for the quarters prior to the grant and after the withdrawal of the authorization to organize games of chance played on the relevant device.(3) The tax shall be due in full amount for the quarter in which the authorization to organize games of chance played on the relevant device is granted or withdrawn.Declaring of TaxArticle 246. The organizer of a game of chance shall declare the tax under this Section to the National Revenue Agency territorial directorate exercising competence over the place of registration of the said organizer on or before the 15th day of the month next succeeding the quarter.Tax RemittanceArticle 247. (1) The tax under this Section shall be remitted within the time limits for declaring of the said tax.(2) The tax shall be remitted in respect of each gambling establishment by a separate payment order, wherein the location and address of the said establishment shall be stated.(3) The persons under this Section shall transmit a copy of the payment order to the National Revenue Agency territorial directorate exercising competence over the location of the gambling hall, the betting establishment or the casino and to the gambling control authority.Chapter Thirty-ThreeTAX ON PUBLIC-FINANCED ENTERPRISE' INCOMEGeneral DispositionsArticle 248. Any income accruing to any public-financed enterprise from any transactions covered under Article 1 of the Commerce Act, as well as from rent of movable and immovable property, shall attract a tax on income according to the procedure established by this Chapter.Taxable AmountArticle 249. (1) The taxable amount for assessment of the tax on income shall be monthly and annual.(2) The monthly taxable amount shall be the income accruing to the public-financed enterprise from any transactions covered under Article 1 of the Commerce Act, as well as from rent or movable and immovable property, charged during the relevant month.(3) The annual taxable amount shall be the income accruing to the public-financed enterprise from any transactions covered under Article 1 of the Commerce Act, as well as from rent or movable and immovable property, charged during the relevant year.Rates of TaxArticle 250. (1) The rate of tax on income shall be 3 per cent.(2) The rate of tax on income accruing to the municipalities shall be 2 per cent.Tax RetentionArticle 251. (1) Any public-financed scientific research enterprise, public higher school, state-owned and municipal school included in the system of public education shall be allowed to retain 50 per cent of the tax on income due there from in respect of the economic activity thereof as is directly related or auxiliary to the implementation of the core activity thereof.(2) The tax so retained shall be shown as a written-off obligation to the State.Declaring of TaxArticle 252. Any public-financed enterprises subject to levy of a tax on income for the relevant year shall submit an annual tax return in a standard form on or before the 31st day of March of the next succeeding year.Tax RemittanceArticle 253. (1) The tax on income, as assessed on the monthly taxable amount, shall be remitted by public-financed enterprises on or before the 15th day of the month next succeeding the month of charging of the income.(2) Where the sum total of the monthly taxable amounts for the year is less than the annual taxable amount, the tax due shall be remitted on or before the 31st day of March of the next succeeding year.(3) Where the sum total of the monthly taxable amounts for the year is greater than the annual taxable amount, the overremitted tax may be deducted from the taxes on income due after submission of the annual tax return.Chapter Thirty-FourTAX ON VESSELS OPERATION ACTIVITYGeneral DispositionsArticle 254. (1) The taxable persons, specified in this Chapter, may elect that the vessels operation activity thereof attract a tax on vessels operations activity.(2) The tax referred to in Paragraph (1) shall be levied on the taxable persons which have elected to be liable for the said tax for a period not exceeding five years.Taxable PersonsArticle 255. Taxable persons according to the procedure established by this Chapter shall be the persons carrying out maritime merchant shipping which simultaneously fulfil the following conditions:1. they are corporations registered under the Commerce Act, or permanent establishments of a corporation which is resident for tax purposes in another Member State of the European Community, or a Member State of the European Economic Area, according to the relevant tax legislation and by virtue of a convention for the avoidance of double taxation with a third State is not considered to be resident for tax purposes in another State outside the European Community or the European Economic Area;2. they operate their own vessels or chartered vessels, or manage vessels under a contract of management, as well as charter vessels;3. they do not refuse to train apprentices on board the vessels, with the exception of the cases where the number of apprentices exceeds one per fifteen officer members of the ship's complement;4. they man the vessel with Bulgarian citizens or with nationals of other Member States of the European Community or of the European Economic Area;5. vessels flying the Bulgarian flag or a flag of another Member State of the European Community or of the European Economic Area account for at least 60 per cent of the net tonnage of the vessels operated.Restrictions on Scope of TaxArticle 256. The taxable persons shall not have the right to apply the procedure for taxation under this Chapter in respect of:1. any seagoing vessels of a net tonnage under 100 tons;2. any fishing vessels;3. any pleasure vessels, with the exception of passenger vessels;4. any vessels which the taxable persons have provided for management or under a bareboat charter, with the exception of the cases where any such vessels have been provided to the State;5. any rigs for extraction of subsurface resources, any oil production platforms, and any vessels engaged in dredging operations and in tugging and towage operations.Taxable AmountArticle 257. (1) The taxable amount per vessel per day of service shall be determined as follows:1. in respect of any vessel of a net tonnage of up to 1,000 tons inclusive: BGN 3.50 for each 100 tons or fraction;2. in respect of any vessel of a net tonnage from 1,001 up to 10,000 tons inclusive: BGN 35 plus BGN 3.00 for each 100 tons or fraction;3. in respect of any vessel of a net tonnage from 10,001 up to 25,000 tons inclusive: BGN 305 plus BGN 2.50 for each 100 tons or fraction above 10,000 tons;4. in respect of any vessel of a net tonnage in excess of 25,001 tons: BGN 680 plus BGN 1 for each 100 tons or fraction above 25,000 tons.(2) The taxable amount per ship for a calendar month shall be determined by multiplying the taxable amount for the relevant vessel per day of service, as determined according to the procedure established by Paragraph (1), by the days of service of the relevant vessel during the calendar month.(3) The taxable amount for assessment of the tax under this Chapter shall be the sum total of the taxable amounts determined for each vessels according to the procedure established by Paragraph (2).Rate of TaxArticle 258. The rate of tax under this Chapter shall be 10 per cent.Declaring of TaxArticle 259. (1) The taxable persons shall exercise the right of choice thereof to levy of a tax under this Chapter by means of submission of a declaration in a standard form on or before the 31st day of December of the last preceding year.(2) The taxable persons shall submit an annual tax return in a standard form on the tax due under this Chapter on or before the 31st day of March of the next succeeding year.Tax RemittanceArticle 260. The taxable persons shall remit the tax due under this Chapter monthly, not later than at the end of the next succeeding month.PART SIXADMINISTRATIVE PENALTY PROVISIONSChapter Thirty-FiveADMINISTRATIVE VIOLATIONS AND SANCTIONSArticle 261. (1) Any taxable person, which fails to submit a tax return under this Act, which fails to submit any such return when due, or which fails to state or misstates any particulars or circumstances leading to underassessment of the tax due or to undue reduction, retention of or exemption from tax, shall be liable to a pecuniary penalty of BGN 500 or exceeding this amount but not exceeding BGN 3,000.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty of BGN 1,000 or exceeding this amount but not exceeding BGN 6,000.Article 262. (1) Any taxable person, which fails to submit any supplement to the annual tax return or which states any untrue particulars or circumstances in any such supplement, shall be liable to a pecuniary penalty of BGN 100 or exceeding this amount but not exceeding BGN 1,000.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty of BGN 200 or exceeding this amount but not exceeding BGN 2,000.Article 263. (1) Any taxable person, which accounts for any business transaction in breach of the accounting policies thereof and this leads to a misdetermination of the accounting financial result of the said person, shall be liable to a pecuniary penalty of BGN 100 or exceeding this amount but not exceeding BGN 1,000 for each such breach.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty of BGN 200 or exceeding this amount but not exceeding BGN 2,000.Article 264. (1) Any managing director, liquidator or trustee in bankruptcy, or holder of the position of liquidator or trustee in bankruptcy, who by any act or omission has committed any violation specified in Articles 261, 262 or 263 herein, shall be liable to a pecuniary penalty or a fine of BGN 200 or exceeding this amount but not exceeding BGN 1,000.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty or a fine of BGN 400 or exceeding this amount but not exceeding BGN 2,000.Article 265. (Amended, SG No. 110/2007) Any taxable person, who or which fails to issue an accounting source document for the accounting for income, shall be liable to the sanction under Article 182 of the Value Added Tax Act unless subject to a severer sanction.Article 266. (Amended, SG No. 110/2007) Any taxable person, who or which fails to fulfil the obligation thereof under Article 10 (4) herein, shall be liable to the sanction under Article 185 of the Value Added Tax Act. Article 267. (Amended, SG No. 110/2007) Any taxable person, who effects a hidden profit distribution, shall be liable to a pecuniary penalty to the amount of 20 per cent of the expense charged constituting a hidden profit distribution.Article 268. (1) Any organizer of games of chance, which fails to fulfil the obligation thereof to keep daily and monthly records under Article 219 herein, shall be liable to a pecuniary penalty of BGN 2,000 or exceeding this amount but not exceeding BGN 10,000.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty of BGN 4,000 or exceeding this amount but not exceeding BGN 20,000.Article 269. (1) Any enterprise referred to in Article 232 herein, printing tokens certifying participation or importing such tokens, which provides the tokens certifying participation without presentation thereto of the documents on the tax paid, shall be liable to a pecuniary penalty equivalent to the unremitted tax.(2) Any repeated violation under Paragraph (1) shall be punishable by a pecuniary penalty in a double amount, and the Minister of Finance shall disqualify the enterprise affected from printing or importing tokens certifying participation in the games covered under Section III of Chapter Thirty-Two herein for a period not exceeding six months.Article 270. (1) Any organizer of games of chances referred to in Article 228 herein, which conducts such games without having paid the full amount of the tax due, shall be liable to a pecuniary penalty equivalent to double the amount of the tax due but in any case not less than BGN 2,000.(2) The pecuniary penalty referred to in Paragraph (1) shall furthermore be imposed on any organizer of games of chance referred to in Article 228 herein which offers, sells or provides to any participant in the game of chance any token certifying participation which does not satisfy the statutorily established requirements as to the printing, form, type and cost price, or at a price exceeding the nominal value as printed on the relevant token certifying participation. No sanction shall be imposed where the tokens certifying participation have been revalued in respect of the series and the nominal value according to an inventory memorandum certified by a representative of the Ministry of Finance, a representative of the enterprise printing the tokens, and a revenue authority of the competent National Revenue Agency territorial directorate exercising competence over the place of registration of the organizer.(3) Any repeated violation under Paragraphs (1) and (2) shall be punishable by a pecuniary penalty equivalent to the double amount of the tax due but in any case not less than:1. BGN 4,000 and disqualification from practice of the activity according to the procedure established by Article 272 herein, where the repeated violation is under Paragraph (1);2. BGN 6,000 and disqualification from practice of the activity according to the procedure established by Article 272 herein, where the repeated violation is under Paragraph (2).Article 271. The pecuniary penalties referred to in Articles 269 and 270 herein shall be imposed notwithstanding the sanctions provided for in other laws, and the control authorities under the Gambling Act shall be notified of the violations as ascertained.Article 272. (1) The administrative sanction of disqualification from practice of activity shall be imposed for a period of one month or exceeding this period but not exceeding six months.(2) In the cases under Article 270 (2) herein, the revenue authorities shall seize and destroy the tokens certifying participation which do not satisfy the statutorily established requirements as to the printing, form, type and cost price, or any such tokens which are sold at a price exceeding the nominal value as printed thereon. The expenses shall be for the account of the taxable person.(3) In the cases of imposition of an administrative sanction of disqualification from practice of activity, a coercive administrative measure of sealing of the establishment or establishments and prohibition of access thereto shall furthermore be imposed.Article 273. (1) The implementation of the administrative sanction of disqualification from practice of activity shall be discontinued by the imposing authority at the request of the taxable person sanctioned according to an administrative procedure and after the said person has proved that the pecuniary penalty as imposed has been fully paid.(2) In the cases referred to in Paragraph (1), the revenue authority shall furthermore decree unsealing of the establishment, which shall be performed with the obligation to cooperate on the part of the tax subject.Article 274. The penalty decrees in the part thereof imposing the administrative sanction of disqualification from practice of activity and a coercive administrative measure of sealing of the establishment or establishments and denial of access thereto, as well as the decrees referred to in Article 273 herein, shall be subject to anticipatory enforcement unless the court orders otherwise.Article 275. Any person, which fails to fulfil the obligation thereof under Article 187 (3) herein, shall be liable to a pecuniary penalty of BGN 1,000 or exceeding this amount but not exceeding BGN 3,000 and, upon a repeated commission of the violation, to a pecuniary penalty of BGN 2,000 or exceeding this amount but not exceeding BGN 6,000.Article 276. Any taxable person, which fails to fulfil the obligations thereof under Article 92 (3) or (4) herein, shall be liable to a pecuniary penalty of BGN 500 or exceeding this amount but not exceeding BGN 2,000 and, upon a repeated commission of the violation, to a pecuniary penalty of BGN 1,500 or exceeding this amount but not exceeding BGN 5,000 for each unfulfilled obligation.Article 277. (1) Any taxable persons, which have applied the procedure for taxation under Chapter Thirty-Four herein without qualifying for the right of choice, shall be liable to a pecuniary penalty of BGN 20,000 or exceeding this amount but not exceeding BGN 30,000 and, upon a repeated commission of the violation, to a pecuniary penalty of BGN 40,000 or exceeding this amount but not exceeding BGN 60,000.(2) The persons referred to in Paragraph (1) shall have no right to apply the procedure for taxation on the net tonnage of vessels for a period of five years.Article 278. (1) The written statements ascertaining the violations shall be drawn up by the authorities of the National Revenue Agency, and the penalty decrees shall be issued by the Executive Director of the National Revenue Agency or by an official authorized thereby.(2) The ascertainment of violations, the issue, appeal against and enforcement of penalty decrees shall follow the procedure established by the Administrative Violations and Sanctions Act .SUPPLEMENTARY PROVISIONS 1. Within the meaning given by this Act:1. "The country" shall be the geographical territory over which the Republic of Bulgaria exercises the State sovereignty thereof, as well as the continental shelf and the exclusive economic zone where within the Republic of Bulgaria exercises sovereign rights in conformity with international law.2. "Permanent establishment" shall be a permanent establishment within the meaning given by Item 5 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code .3. "Financial asset" shall be the asset as defined in the applicable accounting standards, including the compensation instruments within the meaning given by Article 2 of the Transactions in Compensation Instruments Act. Where the person is not an enterprise within the meaning given by the Accountancy Act, the applicable accounting standards for the purposes of sentence one shall be the international accounting standards applicable in the country for the relevant year.4. "Dividend" shall be the distribution in favour of a person, arising from the holding that such person has in the capital of another person, resulting in a reduction of the owners' equity of the latter, including:(a) income from shares;(b) income from participating interests, even in unincorporated associations, and from other corporate rights, where treated as income from shares;(c) hidden profit distribution.Any distribution which, according to accounting legislation, has been accounted for at the distributing person as an expense shall not be a dividend, with the exception of the cases of hidden profit distribution.5. (Amended, SG No. 110/2007) "Hidden profit distribution" shall be:(a) any expenses charged by a taxable person without being connected with the economic activity carried out thereby or exceeding the customary market levels, in the cases where made in favour of shareholders, members or any parties related thereto;(b) any expenses on interest payments charged (unless the conditions of the loan are agreed in conformity with requirements provided for in a statutory instrument) where at least three of the following conditions are fulfilled:(aa) the loan exceeds the owners' equity of the payer of the income at the 31st day of December of the last preceding year;(bb) the repayment of the loan or the payment of interest thereon is not limited by a fixed period;(cc) the repayment of the loan or the payment of interest thereon depends on the existence or on the amount of profits accruing to the payer of the income;(dd) the repayment of the loan depends on satisfaction of the claims of other creditors or on the payment of dividends.6. "Share in a liquidation surplus" shall be the distribution of a share in the property of a person upon the dissolution thereof in favour or another person or upon cessation of membership of that other person.7. "Interest payment" shall be income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, including interest paid on deposits with banks and income (premiums) from debentures and bonds. For the purposes of Part Three herein, any income which constitutes a dividend, penalty charges for late payments and damages shall not be regarded as interest payments.8. "Copyright and licence royalties" shall be payments of any kind received as a consideration for: the use of, or the right to use, any copyright of scientific, artistic or literary work, including cinematograph films and television films and recordings for transmission by radio or television or software; of any patent, trade mark, industrial design or utility model, drawing, plan, secret formula or process, as well as for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. The payment for acquisition of a right to use software in which only a copy of the relevant program is incorporated shall not be considered to be copyright and licence royalties in case the rights to copy, reproduce, distribute, modify, publicly display or make commercial use in any other form are not granted.9. "Technical assistance fees" shall be the payments from a source inside the Republic of Bulgaria for erection or installation of tangible assets, as well as any services of a consulting nature and marketing research as provided by any non-resident person.10. "Franchising" shall be a totality of industrial or intellectual property rights relating to trademarks, trade names, logotypes, utility models, designs, copyright, know-how or patents, granted in return for a royalty, to be used for sale of goods and/or provision of services.11. "Factoring" shall be a transaction whereby single or periodic monetary claims arising from a supply of goods or a provision of services are transferred, regardless of whether the person who has acquired the claims (the factor) assumes the risk of collection of the said claims in consideration of the payment of a reward.12. "Foreign tax credit" shall be the right, enjoyable under conditions as specified by this Act, to deduct a profits tax or a tax on income already paid abroad.13. "Related parties" shall be the parties within the meaning given by Item 3 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code.14. "Market price" shall be the price within the meaning given by Item 8 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code.15. "Transfer between a permanent establishment and another division of the same enterprise" shall be the term referred to in Item 6 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code.16. "Accounting financial result" shall be the profit (loss) according to the profit-and-loss account (income statement) for a specified period before charging the tax expenses on the profit.17. "Undistributable expenses" shall be all selling expenses, administrative, financial and extraordinary expenses which do not relate to a particular activity only and are associated with the implementation of any activity:(a) in respect of which corporation tax retention is enjoyable, or(b) subject to levy of corporation tax, performed by not-for-profit legal entities.18. "Undistributable income" shall be all financial and extraordinary income which does not arise from the implementation of a particular activity only and is associated with implementation of any activity in respect of which corporation tax retention is enjoyable.19. "Expenses on provisions for debts" shall be the expenses on provisions as accounted for, which meet the criteria for recognition of a provision according to the applicable accounting standards, including:(a) the expected excesses of the total amount of expenses over income and the expected losses under construction contracts;(b) the termination and post-employment benefits, equity compensation benefits and other long-term employee benefits.20. "Debt capital", within the meaning given by Article 43 (6) herein, shall be the total liabilities of the enterprise, excluding the investment grants and subsidies.21. "Disposition effected on a regulated Bulgarian securities market" shall be any transactions:(a) (amended, SG No. 52/2007) concluded on the official and the second-tier regulated market in the country within the meaning given by the Markets in Financial Instruments Act , excluding block trades and other transactions in securities which, according to the Rules and Regulations of the regulated market, are subject only to registration on the regulated market;(b) (amended, SG No. 52/2007) concluded under the terms and according to the procedure of tender offering under Section II of Chapter Eleven, as well as the transactions under the terms and according to the procedure of repurchase or redemption by collective investment schemes which have been admitted to public offering in the Republic of Bulgaria, licensed investment companies of the closed-end type, according to the procedure established in the Markets in Financial Instruments Act. 22. (Amended, SG No. 110/2007) "Documented cost of acquisition of securities or interests" shall be the cost of acquisition of the relevant securities which the person has documented according to the procedure established by the relevant statutory instruments. Where securities or interests of a particular type, issued by a particular person, have been acquired at different prices and part of the said securities or interests are subsequently sold and it is impossible to prove which of the said securities or interests are sold, the cost of acquisition of the securities or interests sold shall be the weighted average price arrived at on the basis of the cost of acquisition of the securities or interests held at the time of the sale. Sentence two shall apply in all cases of acts of disposition of securities or interests. Where new shares or interests are acquired as a result of a distribution which has not led to a reduction of the owners' equity of the person distributing the shares or interests, the documented cost of acquisition of the shares or interests held shall be recalculated. After acquisition of the new shares or interests under the foregoing sentence, the documented cost of acquisition of each share or interest, including the newly acquired ones, shall equal the sum total of the documented costs of acquisition of the shares or interests prior to the acquisition of the new shares or interests, divided by the total number of shares or interests held after the acquisition, including the newly acquired ones.23. "Computer peripheral equipment" shall be all devices which are connected to the basic input/output system of a computer or are controlled by a computer but are not essential for the functioning of the said computer.24. "Development activity" shall be the activity of developing, designing, building and testing new goods, materials, manufacturing technologies and industrial systems and other industrial property items, as well as improving existing products and technologies.25. "Tax loss from a source outside Bulgaria", for the purposes of Articles 73 and 74 herein, shall be the sum total of the losses from all permanent establishments in the respective foreign State.26. "Financial institutions" shall be:(a) (amended, SG No. 110/2007, effective 1.01.2007) the credit and financial institutions under the Credit Institutions Act; (b) the insurers, reinsurers and non-resident persons carrying on insurance or reinsurance business through a permanent establishment under the Insurance Code;(c) (supplemented, SG No. 52/2007) the investment intermediaries under the Markets in Financial Instruments Act and the management companies under the Public Offering of Securities Act ;(d) the companies carrying on business for the provision of supplementary social insurance.(e) (new, SG No. 110/2007, effective 1.01.2007) the health insurance companies under Article 91 of the Health Insurance Act. 27. "Unprocessed plant and animal produce" shall be any primary product derived from plants and animals which is used in its natural form, without undergoing any form of technological treatment or processing resulting in physical and chemical alterations of the composition thereof.28. "Manufacturing activities", for the purposes of Article 184 herein, shall be the process of creation of a new product by means of mechanical, physical or chemical conversion (treatment or processing) of raw and prime materials for the purpose of subsequent sale and biological transformation of live animals or plants.29. (Amended, SG No. 110/2007, effective 1.01.2007) "Initial investment" shall be an investment in new material and immaterial assets, which are eligible expenditures relating to:1. the setting-up of a new establishment;2. the extension of an existing establishment;3. diversification of the output of an establishment into new additional products;4. a fundamental change in the existing production process.An investment in an asset which replaces an existing asset shall not qualify as initial investment;30. (Amended, SG No. 110/2007, effective 1.01.2007) "Enterprise in difficulty" shall be an enterprise meeting one of the following criteria:(a) in the case of a limited liability company or a joint-stock company: where more than 50 per cent of the registered capital thereof has disappeared, and more than 25 per cent of that capital has been lost over the last preceding twelve months;(b) in respect of all other corporations: where more than 50 per cent of the owners' equity thereof has disappeared, and more than 25 per cent of that capital has been lost over the last preceding twelve months;(c) (amended, SG No. 110/2007, effective 1.01.2007) where the corporation fulfils the criteria under the Commerce Act or under the law of the place of registration for institution of bankruptcy proceedings.31. (Amended, SG No. 110/2007, effective 1.01.2007) "De minimis aid" shall be the aid within the meaning given by Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid.32. "Market rate of interest" shall be the interest that would have been paid under the same conditions for credit extended or received under any form whatsoever under a transaction between parties who or which are not related. The market rate of interest shall be determined according to the conditions of the market, taking into account all quantitative and qualitative characteristics of the transaction: form, amount and currency of the resources provided, period of the provision thereof, type, amount and liquidity of the collateral security, credit risk and other risks related to the transaction, profile of the borrower or lessee, as well as all other conditions and circumstances influencing the rate of interest.33. "Advertising expenses" shall be the expenses incurred for the promotion of goods and service, including gifts which bear the trade name or the trade mark of the taxable persons, within the limits of the customary for the activity carried out by the person.34. "Expenses on fringe benefits provided in kind" shall be the perquisites accounted for as expenses covered under Article 294 of the Labour Code and provided according to the procedure and manner defined in Article 293 of the Labour Code or according to a procedure and manner determined by the management of the enterprise. The said perquisites must be available to all factory and office workers and to the persons hired under a management and control contract. Where monetary relationships under any form whatsoever exist between the employer of commissioning entity and the persons referred to in sentence two in respect of the perquisites received, this shall not represent provision of expenses on fringe benefits in kind.35. "Operator", within the meaning given by Article 209 herein, shall be any person which has obtained authorization from the Minister of Finance and which engages in the activities of printing, organizing, control and settlement in connection with food vouchers according to a procedure established by an ordinance of the Minister of Finance.36. "Food vouchers" shall be a type of paper medium of exchange provided through an employer to factory and office workers, including persons hired under management contracts, which are used as a medium of payment at restaurants, fast-food outlets and food trading establishments, according to a contract for provision of services concluded with an operator.37. "Passenger car" shall be such car as defined in the Road Traffic Act.38. "Extra bus services" shall be bus services running according to an endorsed transportation scheme in a mode allowing the vehicles to stop and passengers to alight and board at request where this is legally possible, complementing the principal urban transport services without fully duplicating them.39. "Expenses on maintenance, repair and operation of means of transport" shall be the accounting expenses, related to the maintenance, repair and operation of the means of transport, incurred on:(a) fuel, lubricants and other consumables;(b) spare parts;(c) repair work, including painting and collision-repair services;(d) technical inspections and parking;(e) vehicle care products and accessories.40. "Means of transport" shall be the means of transport as specified in Section Four of Chapter Two of the Local Taxes and Fees Act, regardless of whether entered in a register kept according to Bulgarian legislation.41. "Vessels operation activities" shall be:(a) the effecting of carriage by sea by means of vessels of a net tonnage exceeding 100 tons, the chartering of any such vessels, as well as the sale of vessels subject to tonnage taxation, which have been acquired not less than five years prior to the sale thereof;(b) carriage by land, related to the carriage by sea, administrative and insurance services and other services provided to customers in connection with the effecting of the carriage by sea;(c) financial operations and value adjustments resulting from exchange rate fluctuation, related to the management of the working capital used for the vessels operation;(d) extraordinary activities related to the vessels operation, which do not come within the scope of Littera (a) to (c) and which generate a turnover which does not exceed 0.25 per cent of the turnover generated by the activities referred to in Littera (a) and (b).42. "Days of service" shall be the days on which the vessel is engaged in carriage and/or performs any activities related to carriage. The days of service shall exclude the time for repairs or in a port, as well as the time during which the vessel is not engaged in carriage and/or does not perform any activities related to carriage due to detention or force majeure.43. "Net tonnage" shall be the measure, in tons, of the useful deadweight (cargo carrying capacity) of a vessel as certified by a tonnage certificate of the vessel.44. "Repeated violation" shall be any violation which is committed within one year after the entry into effect of a penalty decree whereby the offender was penalized for a violation of the same kind.45. (New, SG No. 110/2007, effective 1.01.2007) "Agricultural products", "processing of agricultural products" and "marketing of agricultural products" shall have the meaning given to these terms by Article 2 [sic, must be Article 1, paragraph 2 - Translator's Note] of Commission Regulation (EC) No 1998/2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid.46. (New, SG No. 110/2007, effective 1.01.2007) "Eligible expenditure on material assets" for the purposes of Items 29 and 48 shall be land, buildings, machinery and plant/equipment. The initial investments shall furthermore include the machinery and plant/equipment acquired under a financial lease contract where the contract contains an obligation to purchase the asset at the expiry of the term of the contract.47. (New, SG No. 110/2007, effective 1.01.2007) "Eligible expenditure on immaterial assets" for the purposes of Items 29 and 48 shall be assets obtained as a result of transfer of technology by the acquisition of patent rights, licences, know-how or unpatented technical knowledge.48. (New, SG No. 110/2007, effective 1.01.2007) "Large investment project" shall be an initial investment which includes eligible expenditure on material and immaterial assets combined in an economically indivisible way, where the eligible expenditure exceeds the lev equivalent of EUR 50 million, determined according to the official exchange rate of the lev against the euro. The initial investment related to a large investment project must be undertaken within a period of three years. A large investment project may not be divided into sub-projects or stages, if this would lead to circumvention of the provisions in this Act.49. (New, SG No. 110/2007, effective 1.01.2007) "Net turnover" shall have the meaning given to this term by the Accountancy Act. 50. (New, SG No. 110/2007, effective 1.01.2007) "Equity method" shall have the meaning given to this term by accounting legislation.51. (New, SG No. 110/2007, effective 1.01.2007) "Proportionate consolidation method" shall have the meaning given to this term by accounting legislation.52. (New, SG No. 110/2007, effective 1.01.2007) "Jointly controlled entity" shall have the meaning given to this term by accounting legislation. 2. This Act transposes the provisions of Council Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees and of Council Directive 2003/72/EC supplementing the Statute for a European Cooperative Society with regard to the involvement of employees with regard to the involvement of employees.TRANSITIONAL AND FINAL PROVISIONS 3. This Act shall supersede the Corporate Income Tax Act (promulgated in the State Gazette No. 115 of 1997; corrected in No. 19 of 1998; amended in Nos. 21 and 153 of 1998, Nos. 12, 50, 51, 64, 81, 103, 110 and 111 of 1999, Nos. 105 and 108 of 2000, Nos. 34 and 110 of 2001, Nos. 45, 61, 62 and 119 of 2002, Nos. 42 and 109 of 2003, Nos. 18, 53 and 107 of 2004, Nos. 39, 88, 91, 102, 103 and 105 of 2005, Nos. 30, 34, 59 and 63 of 2006). 4. The adjustments of the financial result (accounting profit/loss) for tax purposes consequent to the application of Article 23 of the Corporate Income Tax Act as superseded until the 31st day of December 2006 shall be considered to be adjustments of the accounting financial result upon determination of the tax financial result according to the procedure and according to the relevant provision of this Act. 5. The accounting income and expenses from subsequent valuations (revaluations and impairments) of depreciable assets, which are charged until the 31st day of December 2003 and which are not recognized for tax purposes until the 31st day of December 2006 according to the procedure established by Article 23 of the Corporate Income Tax Act as superseded, shall be recognized for tax purposes in the year of write-off the relevant asset in the tax depreciation schedule, with the exception of the cases of shrinkage. 6. (1) The depreciable assets available in the tax depreciation schedule as at the 31st day of December 2006, with the exception of such specified in Paragraph (2), shall be considered to be taxable depreciable assets within the meaning given by Article 48 herein.(2) The following assets available in the tax depreciation schedule shall be written off therein as at the 1st day of January 2007:1. the positive goodwill;2. the assets which are not used in any activity in respect of which a tax financial result is formed;3. the assets which are not classified as held for sale or are part of a group for exemption classified as held for sale;4. the assets where the taxable person has been dissolved through liquidation or has been dissolved through adjudication in bankruptcy.(3) (Amended, SG No. 110/2007, effective 1.01.2007) Article 66 herein shall not apply in the cases of write-off of any assets under Item 1 and 2 of Paragraph (2). 7. (1) The tax depreciable value of any tax depreciable asset available as at the 1st day of January 2007 shall be the depreciable value of the said asset as at the 31st day of December 2006 under the Corporate Income Tax Act as superseded.(2) The tax depreciation charged of any tax depreciable asset available as at the 1st day of January 2007 shall be the tax-recognized amount of the expenses on depreciations for the relevant asset as at the 31st day of December 2006 under the Corporate Income Tax Act as superseded.(3) The tax value of any tax depreciable asset available as at the 1st day of January 2007 shall be the tax carrying value of the said asset as at the 31st day of December 2006 under the Corporate Income Tax Act as superseded. 8. The values of the tax depreciable assets available in the tax depreciation schedule as at the 1st day of January 2007 shall remain unchanged compared to the said values as at the 31st day of December 2006. 9. (1) The revaluation reserve in the tax depreciation schedule shall be written off therein as at the 1st day of January 2007. The said write-off shall follow the procedure and manner specified in 10 or 11 herein. The taxable person shall opt for the application of 10 or 11 herein.(2) The "revaluation reserve," within the meaning given by Paragraph (1), shall be the revaluation reserve (the subsequent valuations reserve) which is included in the tax depreciation schedule as at the 31st day of December 2006.(3) Where a revaluation reserve (subsequent valuations reserve) other than the one which should have been included according to Article 22 of the Corporate Income Tax Act as superseded is included in the tax depreciation schedule as at the 31st day of December 2006, the said reserve shall be adjusted for the purposes of Paragraph (1).(4) Sole traders shall write off the revaluation reserve according to a procedure and in a manner applicable to the taxable persons under this Act. 10. (1) The taxable persons shall adjust on a single occasion the values of the depreciable assets in the tax depreciation schedule as at the 1st day of January 2007 as a result of the write-off of the revaluation reserve.(2) The tax-recognized amount of the expenses on depreciations for a specific depreciable asset as at the 31st day of December 2006 shall be credited with the written off revaluation reserve for the relevant asset, as a result of which the tax depreciation of the said asset charged as at the 1st day of January 2007 shall be increased and the tax value of the asset as at the 1st day of January 2007 shall be decreased. After the increase, the tax depreciation charged for the relevant asset may not exceed the tax depreciable value of the asset as at the 1st day of January 2007.(3) Where the revaluation reserve for a specific asset exceeds the tax carrying value of the said asset as at the 31st day of December 2006, the said asset shall be written off in the tax depreciation schedule as at the 1st day of January 2007, with the tax-recognized amount of the expenses on depreciations of other assets of the same category, determined within the meaning given by Article 22 of the Corporate Income Tax Act as superseded, being credited with the amount of the excess. Where the values of the assets of the said category are insufficient to fulfil the requirement of sentence one, the tax-recognized amount of the expenses on depreciations of assets of the other categories shall be increased.(4) After the write-off of the revaluation reserve, the total amount of the tax values of all assets available in the tax depreciation schedule as at the 1st day of January 2007 must equal the total amount of the tax carrying values of all assets as at the 31st day of December 2006, debited with the revaluation reserve as written off.(5) Paragraphs (1) to (4) shall not apply were the total amount of the revaluation reserve as written off exceeds the total amount of the tax carrying values of all assets available in the tax depreciation schedule as at the 31st day of December 2006. The taxable persons shall write off all assets available in the tax depreciation schedule as at the 31st day of December 2006 in the said schedule as at the 1st day of January 2007. The accounting financial result shall be credited with the difference between the total amount of the revaluation reserve and the total amount of the tax carrying values of all assets as at the 31st day of December 2006 upon determination of the tax financial result, inter alia upon determination of the quarterly prepayments according to the procedure established by 11 herein. 11. (1) Upon determination of the tax financial results, inter alia upon determination of the quarterly prepayments, the accounting financial result shall be credited with the revaluation reserve as written off as follows:1. for 2007: with one-third of the revaluation reserve as written off;2. for 2008: with one-third of the revaluation reserve as written off;3. for 2009: with one-third of the revaluation reserve as written off.(2) Upon dissolution of any taxable person, with the exception of the cases of dissolution upon transformation through change of the legal form under Article 264 of the Commerce Act , upon determination of the tax financial result for the year of dissolution the accounting financial result shall be credited with the portion of the revaluation result as written off whereby the accounting financial result has not been credited according to the procedure established by Paragraph (1).(3) The taxable person may credit the accounting financial result thereof with the revaluation reserve as written off on a single occasion upon determination of the tax financial result thereof for 2007, inter alia upon determination of the quarterly prepayments. In this case Paragraphs (1) and (2) shall not apply. 12. The provision of Item 6 of Article 55 (1) herein shall apply to any tax tangible fixed assets acquired after the 31st day of December 2006. 13. For the purposes of Article 55 herein, the depreciable asset referred to in Item 55 (f) of 1 of the Supplementary Provisions of the Corporate Income Tax Act as superseded shall be allocated to Category V. 14. For the purposes of Article 55 herein, the depreciable asset, formed according to the Corporate Income Tax Act as superseded as a result of the tax-unrecognized portion of the excess of the sum total of the accounting depreciation quotas over the tax-recognized amount of the depreciations of the assets as a whole for the period commencing on the 1st day of January 1998 and ending on the 31st day of December 2002, shall be allocated to Category VII. 15. (Amended, SG No. 110/2007, effective 1.01.2007) The provision of Article 59 herein shall not apply to any tax depreciable asset for which the charging of tax depreciations was discontinued at the 31st day of December 2006 according to the Corporate Income Tax Act as superseded by reason of withdrawal from use of the said asset. The charging of tax depreciations for the asset referred to in sentence one shall be resumed as from the beginning of the month of re-commissioning of the said asset. 16. The provision of Article 63 herein shall apply to any subsequent expenses completed after the 31st day of December 2006. 17. For the purposes of Article 66 (1) herein, where the residual value is not included in the depreciable value of the asset within the meaning given by the Corporate Income Tax Act as superseded, the accounting carrying value of the asset shall be debited with the residual value thereof upon determination of the tax financial result. 18. Article 68 herein shall apply to any assets acquired after the 31st day of December 2005. 19. Article 45 herein shall not apply in the cases where the financial result for tax purposes has been credited with the subsequent valuation reserve (revaluation reserve) according to the procedure established by Article 23 of the Corporate Income Tax Act as superseded. 20. Any unrecognized expenses on interest payments after the 1st day of January 2004 according to Article 26 of the Corporate Income Tax Act as superseded, subject to deduction and not deducted until the 31st day of December 2006, shall be deducted according to the procedure established by Article 43 herein until the lapse of five years since the year of non-recognition of the said expenses for tax purposes. 21. The portion of the provisions for claims taxed for tax purposes (under the accounting legislation effective until the 31st day of December 2001) in the non-financial enterprises, whereby the financial result has not been debited according to the procedure established by Article 23 (3) of the Corporate Income Tax Act as superseded during succeeding years, shall be treated as unrecognized expense on subsequent valuation of a claim according to the procedure established by Article 34 of this Act. 22. Any losses formed after the 1st day of January 2002 and subject to carry-forward, which have not been deducted until the 31st day of December 2006 according to the procedure established by Chapter Four of the Corporate Income Tax Act as superseded, shall be deducted according to the procedure established by Chapter Eleven herein. 23. Article 95 herein shall not apply to any income and expenses originating as a result of any income and expenses, accounted for prior to the 1st day of January 2007, in respect of which there existed a difference between the amount as accounted for according to the accounting policies and the amount as determined by a regulatory authority according to a statutory instrument. 24. The right to enjoy the reduction referred to in Article 60 (1) or the retention referred to in Articles 61d or 61e of the Corporate Income Tax Act as superseded in respect of the corporation tax due for 2006 shall furthermore vest in any taxable person which has not submitted a notification to the competent National Revenue Agency territorial directorate according to Article 51a of the Corporate Income Tax Act as superseded, subject to the condition that the said person fulfil all requirements provided for in the Act for the relevant corporation tax reduction or retention. 25. Corporation tax retention shall be allowed according to the procedure established by Article 187 herein until the 31st day of December 2010. 26. (Repealed, SG No. 110/2007, effective 1.01.2007). 27. The annual taxable profit (loss), the annual corporation tax due, all alternative taxes, the taxes on expenses and the withholding taxes for 2006, which are declarable according to the procedure established by the Corporate Income Tax Act as superseded, shall be declared by means of submission of the relevant tax returns and within the time limits under the said Act. 28. (1) The taxes due for 2006 under the Corporate Income Tax Act as superseded shall be remitted within the time limits and according to the procedure established by the said Act.(2) The right referred to in Article 92 (5) herein shall be enjoyable by the taxable persons even upon declaring the corporation tax for 2006. 29. The standard forms of annual tax returns for 2006 under the Corporate Income Tax Act as superseded shall be endorsed not later than the 10th day of January 2007 by an order of the Minister of Finance, which shall be promulgated in the State Gazette. 30. (Amended, SG No. 110/2007, effective 1.01.2007) Any provisions, which are included in the historical cost of a tax depreciable asset but are not included in the depreciable value of the said asset according to the Corporate Income Tax Act as superseded, shall be considered as provisions which are not included in the tax depreciable value of the asset according to Article 53 (1) herein. 31. (Repealed, SG No. 110/2007). 32. The Tax and Social-Insurance Procedure Code (promulgated in the State Gazette No. 105 of 2005; amended in Nos. 30, 33, 34, 59, 63, 73 and 82 of 2006) shall be amended and supplemented as follows:1. In Article 141:(a) in Paragraph (1), the words "thirty days" shall be replaced by "sixty days";(b) in Paragraph (2):(aa) in sentence one at the end, there shall be added "and has not eliminated the deficiencies within fifteen days after the date of request by the revenue authority";(bb) in sentence two, the words "there are no" shall be replaced by "there are";(c) in Paragraph (3), after the words "application of the CADT" there shall be inserted "or failure to rule within the period under Paragraph (1)";(d) Paragraphs (4) and (5) shall be amended to read as follows:"(4) Any opinion on lack of grounds for application of the CADT shall be appealable by the recipient of the income or by the payer, if authorized to do so by the recipient of the income. Any such appeal shall follow the procedure for appeal of audit acts, and the appeal shall be lodged care of the territorial directorate whereto the request has been submitted.(5) If there is an opinion on application of the CADT under Paragraph (1) or (2), the tax liabilities for the relevant income may be revised solely if there are grounds under Article 133 (2)."2. In Article 142 (1) and (2) , the figure "25,000" shall be replaced by "50,000". 33. This Act shall enter into force on the 1st day of January 2007.This Act was adopted by the 40th National Assembly on the 14th day of December 2006 and the Official Seal of the National Assembly has been affixed thereto.Act to Amend and Supplement the Corporate Income Tax Act(SG No. 110/2007, effective 1.01.2008)TRANSITIONAL AND FINAL PROVISIONS 56. (Effective 1.01.2007, SG No. 110/2007) Any overremitted corporation tax, profits tax and municipal tax under the Corporate Income Tax as superseded (promulgated in the State Gazette No. 115/1997; corrected in No. 19/1998; amended in Nos. 21 and 153/1998, Nos. 12, 50, 51, 64, 81, 103, 110 and 111/1999, Nos. 105 and 108/2000, Nos. 34 and 110/2001, Nos. 45, 61, 62 and 119/2002, Nos. 42 and 109/2003, Nos. 18, 53 and 107/2004, Nos. 39, 88, 91, 102, 103 and 105/2005, Nos. 30, 34, 59 and 63/2006; superseded, No. 105/2006), which is not deducted, refunded or set off at the 31st day of December 2006, may be deducted according to the procedure established by Article 94 of the effective Corporate Income Tax Act. 57. (Effective 1.01.2007, SG No. 110/2007) Any taxable person, which has retained tax under Article 58 of the Profits Tax Act as repealed (promulgated in the State Gazette No. 59/1996 [sic, must be 1996 - Translator's Note]; amended in No. 110/1996, Nos. 16, 49, 86 and 89/1997; repealed, SG No. 115/1997) or under Article 20 as repealed of the Investment Promotion Act, which adopts the application of International Accounting Standards, shall not apply Chapter Thirteen to the change in accounting policies in respect of the accounting for the tax retained. Upon determination of the tax financial result for the year of transition to International Accounting Standards and for the succeeding years, the financial result shall be credited with the part of the financing accounted for in connection with the tax retained which is not recognized as income before transition to International Accounting Standards, the amount of the increase being allocated by year as applicable in proportion to the expenses accounted for during the said years in connection with fulfilment of the conditions for retention of the tax. Where the tax retained is invested in depreciable assets, the increase referred to in sentence two shall be allocated by year on the basis of the accounting expenses on depreciation accounted for the said assets during the years as applicable. 58. (Effective 1.01.2007, SG No. 110/2007) The tax reliefs according to the procedure established by Section IV of Chapter Twenty-Two, with the exception of Article 187 of the Corporate Income Tax Act, shall be enjoyable until the 31st day of December 2013. The tax relief referred to in Article 184 of the Corporate Income Tax Act, constituting regional aid, shall be enjoyable where implementation of the relevant initial investment commenced after the 31st day of December 2006 but before the 1st day of January 2014. 59. (Effective 1.01.2007, SG No. 110/2007) The tax relief referred to in Article 184 of the Corporate Income Tax Act, of which the Minister of Finance has notified the European Commission according to the procedure established by Article 8 of the State Aids Act, constituting regional aid, shall become effective after adoption of a positive decision by the European Commission regarding the accordance of the said relief with the Guidelines on national regional aid for 2007 to 2013 of the European Commission. Provided that the European Commission adopts a positive decision until the 31st day of March 2008, the tax relief may be applied for 2007 as well. After the adoption of a positive decision by the European Commission, the Minister of Finance need not prepare individual notifications on the taxable persons applying Article 184 of the Corporate Income Tax Act, with the exception of such implementing large investment projects under Article 189 of the Corporate Income Tax Act. 60. The tax depreciable assets at the 31st day of December 2007, which are written off for accounting purposes but are not written off in the tax depreciation schedule in pursuance of Item 2 of Article 22 (12) of the Corporate Income Tax Act as superseded because a flow of economic benefit is not expected there from or in pursuance of item 1 of article 60 (3), shall be written off in the tax depreciation schedule at the 1st day of January 2008. The provision of Article 66 (2) of the effective Corporate Income Tax Act shall apply, inter alia upon determination of the quarterly tax prepayments for 2008. Sentences one and two shall not apply to any assets which are written off for accounting purposes because they are completely depreciated. 61. The provision of Article 140 (7) of the Corporate Income Tax Act shall not apply to any transformation whereof the date of recordation in the Commercial Register precedes the 1st day of January 2008. 62. Any accounting income and expenses, profits and losses, accounted for by a partner in a jointly controlled entity as a result of application of the proportionate consolidation method, shall not be recognized for tax purposes where the jointly controlled entity is a taxable person. 63. (1) Upon determination of the tax financial result of any financial institutions, the accounting financial result thereof shall be debited with the dividends distributed by resident legal persons during the current year, where the investment is accounted for according to the equity method.(2) Upon determination of the tax financial result of any taxable persons other than financial institutions, the accounting financial result thereof shall be debited with the dividends distributed by resident legal persons for the period commencing with the acquisition and ending with the write-off of the investment, where the investment is accounted for according to the equity method. The debiting under sentence one shall be effected in the year of write-off of the investment.(3) Paragraphs (1) and (2) shall not apply to:1. any dividends distributed from profits which are realized prior to the acquisition of the investment by the taxable person, or2. any dividends distributed by licensed special-purpose investment companies under the Special-Purpose Investment Companies Act. 64. (1) Upon determination of the financial result of any resident parent company which is a financial institution, the accounting financial result thereof shall be debited with the dividends distributed by a subsidiary thereof from a Member State during the current year, where the investment in the subsidiary is accounted for according to the equity method.(2) Upon determination of the tax financial result of a resident parent company other than a financial institution, the accounting financial result thereof shall be debited with the dividends distributed by a subsidiary thereof from a Member State for the period commencing with the acquisition and ending with the write-off of the investment in the subsidiary, where the investment is accounted for according to the equity method. The debiting under sentence one shall be effected in the year of write-off of the investment.(3) Paragraphs (1) and (2) shall be furthermore applied by a permanent establishment in the country upon distribution of dividends by a non-resident person, where the conditions under Items 1 to 3 of Article 105 (2) of the Corporate Income Tax Act are fulfilled.(4) Where dividends have been distributed according to the procedure established by Paragraphs (1) or (3) within two years after the time of acquisition of at least 15 per cent of the capital of the company distributing the dividends, the taxable person shall have the right to debit the financial result thereof according to the procedure established by Paragraph (1). In case the taxable person ceases to hold at least 15 per cent of the capital of the company prior to the lapse of the two years, the tax financial result and the corporation tax due for the year in which Paragraph (1) is applied, shall be adjusted in a way as if Paragraph (1) was not applied. Default interest according to the standard procedure shall be due for the period commencing on the date on which the corporation tax had to be remitted and ending on the date of remittance of the said tax.(5) Paragraphs (1) to (4) shall not apply to any dividends distributed from profits which are realized prior to the acquisition of the investment by the taxable person. 65. 62, 63 and 64 of this Act shall apply upon determination of the tax financial result for 2007. 66. 16 and 17 of this Act shall apply to any assets acquired after the 31st day of December 2007......................................................................... 68. This Act shall enter into force on the 1st day of January 2008, with the exception of 7, 21, 24, 38 to 45, 49, 50, Items 3 to 7 of 54, Items 1 to 4 of 55 and 56 to 59 herein, which shall enter into force on the 1st day of January 2007.Annex 1to Item 1 of Article 100(Supplemented, SG No. 108/2007, effective 1.01.2007) List of Companies in the Member States of the European Union Referred to in Item 1 of Article 100 Herein(a) companies incorporated under Council Regulation (EC) No 2157/2001 on the Statute for a European company (SE) and Council Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees, [and cooperative societies] included [sic, actually incorporated - Translator's Note] under Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society (SCE) and Council Directive 2003/72/EC supplementing the Statute for a European Cooperative Society with regard to the involvement of employees;(b) companies under Belgian law known as: "sociйtй anonyme"/"naamloze vennootschap", "sociйtй en commandite par actions"/"commanditaire vennootschap op aandelen", "sociйtй privйe а responsabilitй limitйe"/"besloten vennootschap met beperkte aansprakelijkheid", "sociйtй cooperative а responsabilitй limitйe"/"cooperative vennootschap met beperkte aansprakelijkheid", "sociйtй en nom collectif"/"vennootschap onder firma", "sociйtй en commandite simple"/"gewone commanditaire vennootschap", public undertakings which have adopted one of the above-mentioned legal forms, as well as other companies constituted under Belgian law and which are subject to the Belgian Corporate Tax;(c) companies under Czech law known as: "akciovб spolecnost", "spolecnost s rucenim omezenэm";(d) companies under Danish law known as "aktieselskab" and "anpartsselskab". Other companies subject to tax under the Corporation Tax Act, in so far as their taxable income is calculated and taxed in accordance with the general tax legislation rules applicable to "aktieselskaber";(e) companies under German law known as: "Aktiengesellschaft", "Kommanditgesellschaft auf Aktien", "Gesellschaft mit beschrдnkter Haftung", "Versicherungsverein auf Gegenseitigkeit", "Erwerbs- und Wirtschaftsgenossenschaft", "Betriebe gewerblicher Art von juristischen Personen des цffentlichen Rechts", as well as other companies constituted under German law and subject to German corporate tax;(f) companies under Estonian law known as: "tдisьhing", "usaldusьhing", "osaьhing", "aktsiaselts", "tulundusьhistu";(g) companies under Greek law known as: ??????? ???????", "??????? ????????????з ??????з" (?.?.?) and other companies constituted under Greek law and subject to Greek corporate tax;(h) companies under Spanish law known as: "sociedad anуnima", "sociedad comanditaria por acciones", "sociedad de resposabilidad limitada", as well as those public law bodies which operate under private law. Other entities constituted under Spanish law and subject to Spanish corporate tax ( Impuesto sobre Sociedades');(i) companies under French law known as: "sociйtй anonyme", "sociйtй en commandite par actions", "sociйtй а responsabilitй limitйe", "sociйtй par actions simplifiйe", "sociйtй d'assurances mutuelles", "caisses d'йpargne et de prйvoyance", "sociйtйs civiles", which are automatically subject to corporation tax, "coopйratives", "unions de coopйratives", industrial and commercial public establishments and undertakings, as well as other companies constituted under French law which are subject to the French Corporate Tax;(j) companies incorporated or existing under Irish laws, bodies registered under the Industrial and Provident Societies Act, building societies incorporated under the Building Societies Acts and trustee savings banks within the meaning of the Trustee Savings Banks Act, 1989;(k) companies under Italian law known as "societа per azioni", "societа in accomandita per azioni", "societа a responsabilitа limitata", "societа ccoperativa", "societа di mutual assicurazione", as well as private and public entities whose activity is wholly or principally commercial;(l) under Cypriot law: "???????з", as defined in the Income Tax laws;(m) companies under Latvian law known as: "akciju sabiedriba", "sabiedriba ar ierobezotu atbildibu";(n) companies incorporated under the law of Lithuania;(o) companies under Luxembourg law known as "sociйtй anonyme", "sociйtй en commandite par actions", "sociйtй а responsabilitй limitйe", "sociйtй coopйrative", "sociйtй coopйrative organisйe comme une sociйtй anonyme", "association d'assurances mutuelles", "association d'йpargne-pension", "enterprise de natura commerciale, industrielle ou miniиre de l'Йtat, des communes, des syndicats de communes, des йtablissements publics et des autres personnes marales de droit public", as well as other companies constituted under Luxembourg law which are subject to the Luxembourg Corporate Tax;(p) companies under Hungarian law known as: "kцzkereseti tбrsasбg", "berйti tбrsasбg", "kцzцs vбllat", "korlбtolt felelцssйgь tбrsasбg", "rйszvйnytбrsasбg", "egyesьlйs", "szцvetkezet";(q) companies under Maltese law known as: "Kumpaniji ta' Responsabilita Limitata", "Socjetajiet en commandite li l-kapital taghhom maqsum fazzjonijiet";(r) companies under Dutch law known as "naamloze vennootschap", "besloten vennootschap met beperkte aansprakelijkheid", "Open commanditaire vennootschap", "Coцperatie", "onderlinge waarborgmaatschappij", "Fonds voor gemene rekening", "vereniging op cooperative grondslag", "vereniging welke op onderlinge grondslag als verzekeraar of kredietinstelling optreedt", as well as other companies constituted under Dutch law which are subject to the Dutch Corporate Tax;(s) companies under Austrian law known as: "Aktiengesellschaft", "Gesellschaft mit beschrдnkter Haftung", "Versicherungsvereine auf Gegenseitigkeit", "Erwerbs- und Wirtschaftsgenossenschaften", "Betriebe gewerblicher Art von Kцrperschaften des цffentlichen Rechts", "Sparkassen";(t) companies under Polish law known as: "spуlka akcyjna", "spуlka z ograniczona odpowiedzialnoscia";(u) commercial companies or civil law companies having a commercial form, as well as cooperatives and public undertakings, incorporated under Portuguese law;(v) companies under Slovenian law known as: "delniska druzba", "komanditna druzba", "druzba z omejeno odgovornostjo";(w) companies under Slovak law known as: "akciovб spolocnost", "spolocnost s rucenнm obmedzenэm", "komanditnб spolocnos";(x) companies under Finnish law known as "osakeyhtiц"/"aktiebolag", "osuuskunta"/"andelslag", "sддstцpankki"/"sparbank" and "vakuutusyhtiц"/"fцrsдkringsbolag";(y) companies under Swedish law known as "aktiebolag", "fцrsдkringsaktiebolag", "ekonomiska fцreningar", "sparbanker", "цmsesidiga fцrsдkringsbolag";(z) companies incorporated under the law of the United Kingdom of Great Britain and Northern Ireland.(aa) (new, SG No. 108/2007) companies under Romanian law known as "sosietati pe actiuni", sosietati оn comandita pe actiuni", "sosietati cu raspundere limitata". Annex 2to Item 3 of Article 100 and Item 1 of Article 108 (2)(Supplemented, SG No. 108/2007, effective 1.01.2007) List of Taxes in the Member States of the European Union- impфt des sociйtйs/vennootschapsbelasting in Belgium,- selskabsskat in Denmark,- Kцrperschaftsteuer in the Federal Republic of Germany,- ????? ?????? ???? ?? ???? ???????? ????????????? ????????? [in Greece],- impuesto sobre sociedades in Spain,- impфt sur les sociйtйs in France- corporation tax in Ireland,- imposta sul reddito delle persone giuridiche in Italy,- impфt sur le revenu des collectivitйs in Luxembourg,- venflootschapsbelasting in the Netherlands,- imposto sobre o rendimento das pessoas colectivas in Portugal,- corporation tax in the United Kingdom of Great Britain and Northern Ireland,- Kцrperschaftsteuer in Austria- yhteisцjen tulovero/inkomstskatten fцr samfund in Finland,- statlig inkomstskatt in Sweden,- Dan z prнjmu prбvnickэch osob in the Czech Republic,- Tulumaks in Estonia,- ????? ??????????? in Cyprus,- uznemumu ienakuma nodoklis in Latvia,- Pelno mokestis in Lithuania,- Tбrsasбgi adу in Hungary,- Taxxa fuq l-income in Malta,- Podatek dochodowy od osуb prawnych in Poland,- Davek od dobicka pravnih oseb in Slovenia,- Dan z prнjmu prбvnickэch osob in Slovakia.- Impozit pe profit in Romania. Annex 3to Item 1 of Article 137(Supplemented, SG No. 108/2007, effective 1.01.2007) List of Companies in the Member States of the European Union Referred to in Item 1 of Article 137 Herein(a) companies incorporated under Council Regulation (EC) No 2157/2001 on the Statute for a European company (SE) and Council Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees, included under Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society (SCE) and Council Directive 2003/72/EC supplementing the Statute for a European Cooperative Society with regard to the involvement of employees;(b) companies under Belgian law known as "sociйtй anonyme"/"naamloze vennootschap", "sociйtй en commandite par actions"/"commanditaire vennootschap op aandelen", "sociйtй privйe а responsabilitй limitйe"/"besloten vennootschap met beperkte aansprakelijkheid", "sociйtй cooperative а responsabilitй limitйe"/"cooperative vennootschap met beperkte aansprakelijkheid", "sociйtй en nom collectif"/"vennootschap onder firma", "sociйtй en commandite simple"/"gewone commanditaire vennootschap", public undertakings which have adopted one of the above-mentioned legal forms, as well as other companies constituted under Belgian law and subject to the Belgian Corporate Tax;(c) companies under Czech law known as: "akciovб spolecnost", "spolecnost s rucenim omezenэm";(d) companies under Danish law known as "aktieselskab" and "anpartsselskab"; other companies subject to tax under the Corporation Tax Act, in so far as their taxable income is calculated and taxed in accordance with the general tax legislation rules applicable to "aktieselskaber";(e) companies under German law known as: "Aktiengesellschaft", "Kommanditgesellschaft auf Aktien", "Gesellschaft mit beschrдnkter Haftung", "Versicherungsverein auf Gegenseitigkeit", "Erwerbs- und Wirtschaftsgenossenschaft", "Betriebe gewerblicher Art von juristischen Personen des цffentlichen Rechts", as well as other companies constituted under German law and subject to German corporate tax;(f) companies under Estonian law known as: "tдisьhing", "usaldusьhing", "osaьhing", "aktsiaselts", "tulundusьhistu";(g) companies under Greek law known as: "??????? ???????", "??????? ????????????з ??????з" (?.?.?);(h) companies under Spanish law known as: "sociedad anуnima", "sociedad comanditaria por acciones", "sociedad de resposabilidad limitada", as well as those public law bodies which operate under private law;(i) companies under French law known as "sociйtй anonyme", "sociйtй en commandite par actions", "sociйtй а responsabilitй limitйe", "sociйtй par actions simplifiйe", "sociйtй d'assurances mutuelles", "caisses d'йpargne et de prйvoyance", "sociйtйs civiles", which are automatically subject to corporation tax, "coopйratives", "unions de coopйratives", industrial and commercial public establishments and undertakings, as well as other companies constituted under French law which are subject to the French Corporate Tax;(j) companies incorporated or existing under Irish laws, bodies registered under the Industrial and Provident Societies Act, building societies incorporated under the Building Societies Acts and trustee savings banks within the meaning of the Trustee Savings Banks Act, 1989;(k) companies under Italian law known as: "societа per azioni", "societа in accomandita per azioni", "societа a responsabilitа limitata", "societа ccoperativa", "societа di mutual assicurazione", as well as private and public entities whose activity is wholly or principally commercial;(l) under Cypriot law: "???????з", as defined in the Income Tax laws;(m) companies under Latvian law known as: "akciju sabiedriba", "sabiedriba ar ierobezotu atbildibu";(n) companies incorporated under the law of Lithuania;(o) companies under Luxembourg law known as: "sociйtй anonyme", "sociйtй en commandite par actions", "sociйtй а responsabilitй limitйe", "sociйtй coopйrative", "sociйtй coopйrative organisйe comme une sociйtй anonyme", "association d'assurances mutuelles", "association d'йpargne-pension", "enterprise de natura commerciale, industrielle ou miniиre de l'Йtat, des communes, des syndicats de communes, des йtablissements publics et des autres personnes marales de droit public", as well as other companies constituted under Luxembourg law which are subject to the Luxembourg Corporate Tax;(p) companies under Hungarian law known as: "kцzkereseti tбrsasбg", "berйti tбrsasбg", "kцzцs vбllat", "korlбtolt felelцssйgь tбrsasбg", "rйszvйnytбrsasбg", "egyesьlйs", "kцzhasznъ tбrsasбg", "szцvetkezet";(q) companies under Maltese law known as: "Kumpaniji ta' Responsabilita Limitata", "Socjetajiet en commandite li l-kapital taghhom maqsum fazzjonijiet";(r) companies under Dutch law known as: "naamloze vennootschap", "besloten vennootschap met beperkte aansprakelijkheid", "Open commanditaire vennootschap", "Coцperatie", "onderlinge waarborgmaatschappij", "Fonds voor gemene rekening", "vereniging op cooperative grondslag" and "vereniging welke op onderlinge grondslag als verzekeraar of kredietinstelling optreedt", as well as other companies constituted under Dutch law which are subject to the Dutch Corporate Tax;(s) companies under Austrian law known as: "Aktiengesellschaft", "Gesellschaft mit beschrдnkter Haftung", "Erwerbs- and Wirtschaftsgenossenschaften";(t) companies under Polish law known as: "spуlka akcyjna", "spуlka z ograniczona odpowiedzialnoscia";(u) commercial companies or civil law companies having a commercial form, as well as other legal persons carrying on commercial or industrial activities, which are incorporated under Portuguese law;(v) companies under Slovenian law known as: "delniska druzba", "komanditna druzba", "druzba z omejeno odgovornostjo";(w) companies under Slovak law known as: "akciovб spolocnost", "spolocnost s rucenнm obmedzenэm", "komanditnб spolocnost ";(x) companies under Finnish law known as: "osakeyhtiц"/"aktiebolag", "osuuskunta"/"andelslag", "sддstцpankki"/"sparbank" and "vakuutusyhtiц"/"fцrsдkringsbolag";(y) companies under Swedish law known as: "aktiebolag", "fцrsдkringsaktiebolag", "ekonomiska fцreningar", "sparbanker", "цmsesidiga fцrsдkringsbolag";(z) companies incorporated under the law of the United Kingdom of Great Britain and Northern Ireland.(aa) (new, SG No. 108/2007) companies under Romanian law known as "sosietati pe actiuni", sosietati оn comandita pe actiuni", "sosietati cu raspundere limitata". Annex 4to Item 3 of Article 137(Supplemented, SG No. 108/2007, effective 1.01.2007) List of Taxes in the Member States of the European Union- impфt des sociйtйs/vennootschapsbelasting in Belgium,- selskabsskat in Denmark,- Kцrperschaftsteuer in the Federal Republic of Germany,- ????? ?????? ???? ?? ???? ???????? ????????????? ????????? in Greece,- impuesto sobre sociedades in Spain,- impфt sur les sociйtйs in France,- corporation tax in Ireland,- imposta sul reddito delle societа in Italy,- impфt sur le revenu des collectivitйs in Luxembourg,- venflootschapsbelasting in the Netherlands,- imposto sobre o rendimento das pessoas colectivas in Portugal,- corporation tax in the United Kingdom of Great Britain and Northern Ireland,- Kцrperschaftsteuer in Austria,- yhteisцjen tulovero/inkomstskatten fцr samfund in Finland,- statlig inkomstskatt in Sweden,- Dan z prнjmu prбvnickэch osob in the Czech Republic,- Tulumaks in Estonia,- ????? ??????????? in Cyprus,- uznemumu ienakuma nodoklis in Latvia,- Pelno mokestis in Lithuania,- Tбrsasбgi adу in Hungary,- Taxxa fuq l-income in Malta,- Podatek dochodowy od osуb prawnych in Poland,- Davek od dobicka pravnih oseb in Slovenia,- Dan z prнjmov prбvnickэch osob in Slovakia.- impozit pe profit in Romania. - For more information visit www.solicitorbulgaria.com id: 332 Mon, 04 Aug 2008 06:10:43 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-3 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-3 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/CORPORATE_INCOME_TAX_ACT2.JPG EUR http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-3 legal 80 negotiable Bulgarian Corporate Income Tax Act, part 2 info@solicitorbulgaria.com (SolicitorBulgaria) Chapter EighteenINTRA-COMMUNITY DIVIDENDSSection IDefinitionsCompany of Another Member StateArticle 100. "Company of another Member State" shall be any company in respect of which the following conditions are simultaneously fulfilled:1. the company takes a legal form in accordance with Annex 1 hereto;2. the company is resident for tax purposes in another Member State of the European Community, according to the relevant tax legislation and by virtue of a convention for the avoidance of double taxation with a third State is not considered to be resident for tax purposes in another State outside the European Community;3. the profits of the company attract a tax covered under Annex 2 hereto or to a similar profits tax and the company has no option or the possibility of being exempt from the levy of such tax.Resident Parent CompanyArticle 101. "Resident parent company" shall be any resident commercial corporation or unincorporated association in respect of which the following conditions are… For more information visit http://www.solicitorbulgaria.com id: 333 Chapter EighteenINTRA-COMMUNITY DIVIDENDSSection IDefinitionsCompany of Another Member StateArticle 100. "Company of another Member State" shall be any company in respect of which the following conditions are simultaneously fulfilled:1. the company takes a legal form in accordance with Annex 1 hereto;2. the company is resident for tax purposes in another Member State of the European Community, according to the relevant tax legislation and by virtue of a convention for the avoidance of double taxation with a third State is not considered to be resident for tax purposes in another State outside the European Community;3. the profits of the company attract a tax covered under Annex 2 hereto or to a similar profits tax and the company has no option or the possibility of being exempt from the levy of such tax.Resident Parent CompanyArticle 101. "Resident parent company" shall be any resident commercial corporation or unincorporated association in respect of which the following conditions are simultaneously fulfilled:1. the profits of the company attract corporation tax;2. the company has a minimum holding of 15 per cent in the capital of a company of a Member State, inter alia through a permanent established in another Member State of the European Community, for an uninterrupted period of at least two years.Parent Company of Member StateArticle 102. "Parent company of a Member State" shall be any company of another Member State of the European Community which has a minimum holding of 15 per cent in the capital of a resident subsidiary, inter alia through a permanent established in another Member State of the European Community, for an uninterrupted period of at least two years.Resident SubsidiaryArticle 103. "Resident subsidiary" shall be any resident commercial corporation or unincorporated association in respect of which the following conditions are simultaneously fulfilled:1. the profits of the company attract corporation tax;2. a parent company of a Member State has a minimum holding of 15 per cent in the capital of the company for an uninterrupted period of at least two years.Subsidiary of Member StateArticle 104. "Subsidiary of a Member State" shall be any company of another Member State of the European Community the capital of which includes a minimum holding of 15 per cent by a resident parent company for an uninterrupted period of at least two years.Section IITax Treatment upon Distribution of DividendsDividends Distributed by Subsidiary of Member StateArticle 105. (1) Any accounting income charged in a resident parent company as a result of distribution of dividends by a subsidiary of the said company of a Member State shall not be recognized for tax purposes.(2) The accounting income charged in a permanent establishment in the country as a result of distribution of dividends by non-resident persons shall not be recognized for tax purposes where the following conditions are simultaneously fulfilled:1. the permanent establishment is of a company of another Member State;2. the company referred to in Item 1 has, inter alia through the permanent establishment thereof, a minimum holding of 15 per cent in the capital of the non-resident person distributing the dividends for an uninterrupted period of at least two years;3. the non-resident person distributing the dividends is a company of another Member State.Non-fulfilment of Condition for Exemption from TaxationArticle 106. (1) Where income from dividends has been charged within a period of up to two years from the time of acquisition of a minimum holding of 15 per cent in the capital of a company of a Member State, the taxable person shall have the right not to recognize the said income for tax purposes.(2) In case the company ceases to have a minimum holding of 15 per cent in the capital before the lapse of the two years, the unrecognized income from dividends referred to in Paragraph (1) shall be considered as being recognized for tax purposes for the year of accounting for the said income. The tax financial result and the corporation tax due for the year of accounting for the dividends shall be adjusted in a way as if the income from dividends were recognized for tax purposes. Default interest shall be due according to the standard procedure for the period commencing on the date on which the corporation tax was to be remitted and ending on the date of remittance of the said tax.Unrecognized Expenses Related to Unrecognized Income from DividendsArticle 107. (Repealed, SG No. 110/2007). Dividends Distributed by Resident Subsidiary in Favour of Parent Companyof Member StateArticle 108. (1) Any dividends charged by a resident subsidiary in favour of a parent company of a Member State shall not be subject to levy of a withholding tax.(2) Any dividends charged by resident legal persons in favour of a permanent establishment in another Member State shall not be subject to levy of a withholding tax according to the procedure established by Part Three herein where the following conditions are simultaneously fulfilled:1. a tax under Annex 2 hereto or a similar profits tax is levied on the profits from a permanent establishment and the permanent establishment has no option or the possibility of being exempt from the levy of such tax;2. the permanent establishment is of another resident person or of a company of another Member State;3. the resident person/company referred to in Item 2 has, inter alia through the permanent establishment, a minimum holding of 15 per cent in the capital of the resident person distributing the dividends for an uninterrupted period of at least two years;4. the resident persons referred to in Items 2 and 3 are commercial corporations or unincorporated associations and the profits thereof attract corporation tax.Collateral SecurityArticle 109. (1) Where the provisions of Article 108 herein are applied and the two-year period for having a minimum holding of 15 per cent in the capital has not lapsed at the date of making a decision on distribution of dividend, a tax shall not be withheld at source according to the procedure established by Part Three herein but collateral security shall be furnished to the revenue authority.(2) Any such collateral security must cover the full amount of the withholding tax due.(3) Any such collateral security may be created solely by means of a money deposit or a bank guarantee. The said collateral security shall be accepted in Bulgarian leva and no interest shall be payable thereon.(4) The collateral security shall be released upon fulfilment of the condition referred to in Paragraph (1).CooperativesArticle 110. The provisions of this Chapter shall furthermore apply, mutatis mutandis, in respect of the cooperatives, the cooperative unions and the enterprises thereof.Tax EvasionArticle 111. The provisions of this Chapter shall not apply in all cases of tax evasion or tax avoidance, inter alia in the cases of hidden profit distribution.Chapter NineteenTRANSFORMATION OF COMPANIES AND COOPERATIVES AND TRANSFER OF ENTERPRISESection IGeneral DispositionsApplicabilityArticle 112. The provisions of this Chapter shall apply upon transformation of any companies and cooperatives and upon transfer of an enterprise.Date of TransformationArticle 113. The date of transformation for tax purposes shall be the date of entry of the transformation in the Commercial Register.Last Tax Period upon cessation of transferring companyArticle 114. Last Tax Period upon cessation of transferring company shall be the period from the beginning of the year to the date of transformation. For transferring companies which are newly established during the year of transformation, Last Tax Period shall be the period from the date of establishment to the date of transformation.Taxation for Last Tax PeriodArticle 115. (1) The transferring companies and the permanent establishments of non-resident persons shall be subject to corporation tax for the last tax period according to the standard procedure established by this Act. The taxation shall be final.(2) For tax purposes, the assets and liabilities available at the date of transformation shall be considered as having been sold at market prices and shall be written off.(3) Upon determination of the tax financial result, the accounting financial result shall be credited with the profit and shall be debited with the loss arrived at as a difference between the market price of the asset or liability and the accounting value thereof at the date of transformation. Any temporary tax differences related to the asset or liability shall be recognized during the last tax period according to the standard procedure established by this Act. Article 66 (1) and (2) herein shall apply upon determination of the tax financial result.(4) Paragraphs (2) and (3) shall not apply upon transformation under the terms and according to the procedure established by Sections II and III herein.Tax Treatment of Transformation through Change of Legal FormArticle 116. (1) Articles 115 and 117 herein shall not apply in the cases of transformation through change of the legal form under Article 264 of the Commerce Act. The newly formed company shall assume all obligations for determination of the tax financial result and remittance of the corporation tax due for the full year of transformation.(2) For tax purposes, all rights and obligations arising from any acts performed by the transferring company for the current and prior periods, including the adjustments of the tax financial results, shall be considered as having been performed by the newly formed company.Tax Treatment of Transformation by Transfer of Property to Sole OwnerArticle 116a. (New, SG No. 110/2007) (1) Upon transformation by transfer of property to the sole owner under Article 265 of the Commerce Act, all rights and obligations arising from steps performed by the transforming corporation for the current and prior periods, including the adjustments of the tax financial result, shall be considered as having been performed by the sole trader.(2) The sole trader shall submit a tax return on corporation tax for the last tax period of the transferring company according to the procedure established by Article 117 (1) herein and shall remit the said tax within the time limit under Article 117 (2) herein.(3) After the transformation, the sole trader shall make quarterly tax prepayments in the year of transformation.(4) The sole trader may not carry forward any tax losses formed by the transferring company.(5) The sole trader may not recognize for tax purposes any unrecognized expenses on interest payments in the transferring company resulting from application of the thin capitalization regime.(6) The transferring company shall not apply Article 115 (2) and (3) herein.Declaring and Remittance of Tax for Last Tax PeriodArticle 117. (1) (Amended and supplemented, SG No. 110/2007) In the cases of dissolution of transferring companies, the newly formed companies or the acquiring companies shall submit a tax return on the corporation tax for the last tax period of the transferring company within thirty days after the date of transformation. The tax return shall be submitted to the National Revenue Agency territorial directorate exercising competence over the place of registration of the newly formed company or the acquiring company. Upon transformation through division, the tax return shall be submitted by one of the newly formed or acquiring companies.(2) The corporation tax for the last tax period shall be remitted by the newly formed companies or the acquiring companies within thirty days after the date of transformation after deduction of the tax prepayments made.(3) (New, SG No. 110/2007) Paragraphs (1) and (2) shall furthermore apply in the cases of dissolution of a transferring company under Section II of this Chapter.Tax Prepayments by Acquiring Companies or Newly Formed CompaniesArticle 118. (1) After the transformation, the acquiring companies or the newly formed companies shall make quarterly tax prepayments in the year of transformation.(2) Upon transformation through change of the legal form under Article 264 of the Commerce Act, the newly formed company shall make monthly or quarterly tax prepayments according to the standard procedure established by this Act on the basis of the tax financial result of the transferring company.Carry-Forward of Tax Loss upon Transformation and Transferof EnterpriseArticle 119. (1) Upon transformation under the Commerce Act, the acquiring companies or newly formed companies may not carry forward any tax losses formed by the transferring companies.(2) Upon sale of an enterprise under Article 15 of the Commerce Act, the transferee may not carry forward any tax losses formed by the transferor.(3) Paragraph (1) shall not apply upon transformation through change of the legal form under Article 264 of the Commerce Act.Regulation of Thin CapitalizationArticle 120. (1) Upon transformation under the Commerce Act, the acquiring companies or newly formed companies may not recognize for tax purposes any unrecognized expenses on interest payments in the transferring companies resulting from application of the thin capitalization regime.(2) Upon sale of an enterprise under Article 15 of the Commerce Act, the transferee may not recognize for tax purposes any unrecognized expenses on interest payments at the transferor resulting from application of the thin capitalization regime.(3) Paragraph (1) shall not apply upon transformation through change of the legal form under Article 264 of the Commerce Act.Expenses on Conduct of TransformationArticle 121. (1) The accounting expenses incurred in connection with the transformation shall not be recognized for tax purposes at the transferring company. The unrecognized expenses shall be recognized for tax purposes upon determination of the tax financial result of the acquiring company or the newly formed company in the year during which the transformation was implemented.(2) Where any circumstances occur determining that the transformation will not be implemented, the expenses referred to in Paragraph (1) shall be recognized for tax purposes at the transferring companies in the year of occurrence of the said circumstances, if the requirements of this Act are complied with.Tax Treatment upon Opting for Earlier Date of Transformation forAccounting PurposesArticle 122. (1) (Amended and supplemented, SG No. 110/2007) Upon opting for an earlier date of transformation for accounting purposes according to the procedure established by Article 263g (2) of the Commerce Act, all steps performed by the transferring companies for the account of the newly formed companies or acquiring companies as from the said date and until the date of transformation for tax purposes shall be considered as having been performed for tax purposes by the transferring companies.(2) (Supplemented, SG No. 110/2007) In the cases referred to in Paragraph (1), all accounting income and expenses, profits and losses, accounted for by the newly formed companies or acquiring companies shall be recognized for tax purposes at the transferring company. The said income and expenses, profits and losses shall not be recognized for tax purposes at the newly formed companies or acquiring companies. The accounting income and expenses, profits and losses for the purposes of sentences one and two shall be those as would have been accounted for by the transferring company without providing for the earlier date for accounting purposes according to the procedure established by Article 263g (2) of the Commerce Act. (3) The adjustments upon determination of the tax financial result, resulting from any acts referred to in Paragraph (1), shall be performed by the transferring companies.Cooperative Organizations and State-Owned EnterprisesArticle 123. The provisions of this Chapter in respect of the transformation of commercial corporations shall furthermore apply in the cases of:1. restructuring of cooperative organizations;2. dissolution, closure or formation of state-owned enterprises within the meaning given by Article 62 (3) of the Commerce Act under conditions of universal succession.Liability upon Transformation and RestructuringArticle 124. (1) Upon transformation of commercial corporations or upon restructuring of cooperative organizations, the newly formed or acquiring companies/cooperative organizations shall incur solidary liability for the tax liabilities of the transferring companies or cooperative organizations up to the extent of the rights received.(2) Upon transfer of an enterprise under Article 15 of the Commerce Act, the transferee shall incur solidary liability for the tax liabilities of the transferor up to the extent of the rights received.(3) The rights received shall be valued at market prices.Section IISpecific Regime of Taxation upon TransformationApplicabilityArticle 125. (1) This Section shall apply upon merger by acquisition, merger by the formation of a new company, division, partial division, transfer of assets and exchange of shares or interests within the meaning given by Articles 126 to 131 herein, concerning resident companies and/or companies from another Member State of the European Community.(2) This Section shall furthermore apply, mutatis mutandis, in the cases of restructuring of cooperative organizations, including such of other Member States of the European Community, where the conditions specified therein exist.Merger by AcquisitionArticle 126. (1) "Merger by acquisition" shall be any transformation in respect of which the following conditions are simultaneously fulfilled:1. all assets and liabilities of one or more transferring companies are transferred to another existing acquiring company, the transferring companies being dissolved without going into liquidation;2. the shareholders or members of the transferring companies are issued shares or interests in the acquiring company.(2) "Merger by acquisition" shall furthermore be any transformation whereupon all assets and liabilities of a transferring company are transferred to an acquiring company holding all shares or interests in the transferring company, and the transferring company is dissolved without going into liquidation.Merger by Formation of New CompanyArticle 127. "Merger by the formation of a new company" shall be any transformation in respect of which the following conditions are simultaneously fulfilled:1. all assets and liabilities of two or more transferring companies are transferred to a newly formed company, the transferring companies being dissolved without going into liquidation;2. the shareholders or members of the transferring companies are issued shares or interests in the newly formed company.DivisionArticle 128. "Division" shall be any transformation in respect of which the following conditions are simultaneously fulfilled:1. (supplemented, SG No. 110/2007) all assets and liabilities of a transferring company are transferred to two or more existing (acquiring) or newly formed companies, the transferring company being dissolved without going into liquidation;2. the shareholders or members of the transferring company are issued shares or interests in each of the existing or newly formed companies, in proportion to the shares or interests held by the shareholders or members in the transferring company.Partial DivisionArticle 129. "Partial division" shall be any transformation in respect of which the following conditions are simultaneously fulfilled:1. (supplemented, SG No. 110/2007) one or more branches of activity of a transferring company is transferred to one or more existing (acquiring) or newly formed companies, without the transferring company being dissolved and leaving therein at least one branch of activity;2. the shareholders or members of the transferring company are issued shares or interests in the existing or newly formed companies in proportion to the shares or interests held thereby in the transferring company.Transfer of AssetsArticle 130. (Supplemented, SG No. 110/2007) "Transfer of assets" shall be a transformation whereupon one, more or all branches of activity of a transferring company are transferred to one or more existing (acquiring) or newly formed companies in exchange for shares or interests issued by the existing or newly formed companies in favour of the transferring company, without the transferring company being dissolved.Exchange of Shares or InterestsArticle 131. "Exchange of shares or interests" shall be any transformation in respect of which the following conditions are simultaneously fulfilled:1. as a result of the transformation, the acquiring company holds more than one-half of the voting shares or of the interests in the acquired company or, if already having such holding in the capital, acquires a further holding in the shares or interests;2. the shareholders or members of the acquired company exchange the shares or interests thereof for the issue of shares or interests in the acquiring company.Additional Cash Payments and Non-Issue of Shares or InterestsArticle 132. (1) In the cases of merger by acquisition, merger by the formation of a new company, division, partial division, transfer of assets and exchange of shares or interests, for the purpose of achieving a parity of exchange, cash payments not exceeding 10 per cent of the nominal value of the shares or interests issued as a result of the transformation may be effected to the shareholders or members of the transferring companies or acquired companies.(2) (Amended, SG No. 110/2007) In the cases of merger by acquisition, division and partial division, shares or interests need not be issued where this is admissible by the Commerce Act. Issue of Shares or InterestsArticle 133. Within the meaning given by this Chapter, issue of shares or interests shall be in place where newly issued or held own shares or interests are provided by a newly formed, receiving or acquiring company.Branch of ActivityArticle 134. "Branch of activity" shall be the totality of assets and liabilities of a company which, from an organizational, functional and financial point of view, constitute an independent business.Transferring CompaniesArticle 135. "Transferring companies," within the meaning given by this Section, shall be:1. a resident transferring company;2. a transferring company from another Member State of the European Community;3. a permanent establishment in the country of a transferring company from another Member State of the European Community.Receiving CompaniesArticle 136. "Receiving companies," within the meaning given by this Section, shall be:1. a resident newly formed or receiving company;2. a newly formed or receiving company from another Member State of the European Community;3. a permanent establishment in the country of a newly formed or receiving company from another Member State of the European Community.Company from Another Member State of the European CommunityArticle 137. "Company from another Member State of the European Community," within the meaning given by this Section, shall be any company which simultaneously fulfils the following conditions:1. the company takes a legal form in accordance with Annex 3 hereto;2. the company is resident for tax purposes in another Member State of the European Community, according to the relevant tax legislation and by virtue of a convention for the avoidance of double taxation with a third State is not considered to be resident for tax purposes in another State outside the European Community;3. the profits of the company are subject to a tax covered under Annex 4 hereto or to a similar profits tax and the company has no option or the possibility of being exempt from the levy of such tax.Legal SuccessionArticle 138. For the purposes of this Section, upon transformation all rights and obligations arising from any acts performed by the transferring companies for the current period and the prior periods in respect of the assets and liabilities transferred under Item 1 of Article 139 herein, including the adjustments upon determination of the tax financial result, shall pass to the receiving companies.Assets and Liabilities Subject to TransformationArticle 139. The assets and liabilities subject to transformation under this Section shall be allocated to the following categories:1. assets and liabilities whereof the results of exploitation before and after the transformation are involved upon determination of the tax financial result under this Act;2. assets and liabilities whereof the results of exploitation before the transformation were involved and, as a result of the transformation, cease to be involved upon determination of the tax financial result under this Act;3. assets and liabilities whereof the results of exploitation before the transformation were not involved and, as a result of the transformation, become involved upon determination of the tax financial result under this Act.Assets and Liabilities Transferred under Item 1of Article 139 HereinArticle 140. (1) The accounting profits or losses originating upon write-off of any assets and liabilities referred to in Item 1 of Article 139 herein as a result of the transformation shall not be recognized for tax purposes.(2) The temporary tax differences related to any assets and liabilities referred to in Item 1 of Article 139 herein, which have originated before the transformation, shall not be recognized for tax purposes at the time of transformation and shall be considered as having originated at the receiving companies.(3) Where any asset or liability is recognized according to accounting legislation at the receiving company at a value diverging from the pre-transformation value of the said asset or liability, the difference between the two values shall form a temporary tax difference from a subsequent valuation or the temporary tax difference referred to in Paragraph (2) shall be adjusted thereby.(4) (Supplemented, SG No. 110/2007) The subsequent valuations reserve (revaluation reserve) in respect of any assets referred to in Item 1 of Article 139 herein, which are not tax depreciable assets, shall be transferred by the transferring company and shall be considered as having originated at the receiving company. The transferring company shall not apply Article 45 herein. Where the transferred subsequent valuations reserve (revaluation reserve) referred to in sentence one is not accounted for at the receiving company, the accounting financial result shall be credited with the amount of the reserve where the reserve is a positive quantity or, respectively, the accounting financial result shall be debited with the amount of the reserve where the reserve is a negative quantity, in the year of write-off of the relevant asset whereto the reserve is related.(5) (Supplemented, SG No. 110/2007) Any tax depreciable assets acquired under Item 1 of Article 139 herein shall be posted in the tax depreciation schedule of the receiving company at values equal to the values of the said assets in the tax depreciation schedule of the transferring company at the time of transformation. A copy of the tax depreciation schedule of the transferring company at the time of transformation shall be delivered to the revenue authority together with the copy of the statement referred to in Paragraph (6).(6) (Amended, SG No. 110/2007) Upon transformation of each asset or liability referred to in Item 1 of Article 139 herein, a statement shall be prepared according to the procedure established by Article 141 herein.(7) (New, SG No. 110/2007) Where, as a result of the transformation, the receiving company recognizes according to accounting legislation any assets or liabilities which were not recognized at the transferring company, the post-transformation income and expenses accounted for in connection with the said assets and liabilities shall not be recognized for tax purposes. Where the assets referred to in sentence one are depreciable for tax purposes, the said assets shall be posted in the tax depreciation schedule of the receiving company and tax depreciations shall not be charged for the said assets. The accounting profit which has originated at the receiving company as a result of the transformation and, respectively, the income accounted for in connection with any negative goodwill generated, shall not be recognized for tax purposes.(8) (New, SG No. 110/2007) Where any asset of the transferring company is not recognized according to accounting legislation at the receiving company, the accounting financial result shall be debited with the amount of the said asset upon determination of the tax financial result of the receiving company for the year of transformation, inter alia upon determination of the quarterly tax prepayments. Where any liability of the transferring company is not recognized according to accounting legislation at the receiving company, the accounting financial result shall be credited with the amount of the said liability upon determination of the tax financial result of the receiving company for the year of transformation, inter alia upon determination of the quarterly tax prepayments. The temporary tax differences related to any asset or liability referred to in sentence one, which have originated before the transformation, shall be recognized at the receiving company during the year of transformation according to the standard procedure established by the law.(9) (New, SG No. 110/2007) Paragraphs (3), (6) and (8) shall not apply to:1. any tax depreciable assets;2. any assets and liabilities under deferred taxes;3. the goodwill, where the accounting income and expenses accounted for in connection therewith are not recognized for tax purposes;4. any amounts which are assets for the transferring company and liabilities for the receiving company;5. any amounts which are liabilities for the transferring company and assets for the receiving company;6. any shares or interests of the receiving company held by the transferring company;7. any own shares purchased by the transferring company;8. any subscribed capital unpaid of the transferring company;9. any assets and liabilities referred to in Item 2 of Article 139 herein.(10) (New, SG No. 110/2007) Paragraph (4) shall not apply to the financial assets and liabilities subsequent valuations reserve established by financial institutions, where the accounting financial result has been adjusted according to the procedure established by Article 97 herein for the profits and losses from the said subsequent valuations. This reserve shall not be stated in the statements referred to in Article 141 herein.Statements of Assets and Liabilities Referred to inItem 1 of Article 139 HereinArticle 141. (1) The statement referred to in Article 140 (6) herein, prepared by the transferring companies, shall contain the following information on each asset and liability as at the date of transformation:1. type and designation;2. accounting value;3. temporary tax difference;4. (new, SG No. 110/2007) subsequent valuations reserve (revaluation reserve).(2) A copy of the statement referred to in Paragraph (1) as prepared shall be delivered to the receiving companies and to the revenue authority not later than at the end of the month next succeeding the month of transformation.(3) In the cases referred to in Article 140 (3) herein, a new statement shall be prepared by the receiving companies and a copy of the said statement shall be delivered to the revenue authority together with the annual tax return. The said statement shall contain the following information on each asset and liability:1. type and designation;2. accounting value;3. pre-transformation temporary tax difference;4. post-transformation temporary tax difference, determined according to the procedure established by Article 140 (3) herein;5. (new, SG No. 110/2007) subsequent valuations reserve (revaluation reserve).(4) Where the values of the assets and liabilities are adjusted according to accounting legislation as a result of the transformation after submission of the statement referred to in Paragraph (3), the receiving company shall prepare an adjusting statement. The adjusting statement shall be delivered to the revenue authority not later than at the end of the month next succeeding the month of occurrence of the circumstances necessitating the adjustment.(5) The statements referred to in Paragraphs (1) and (3) shall indicate data identifying the transferring companies and receiving companies, as well as the date of transformation and the judgment of court on entry of the said transformation.(6) (New, SG No. 110/2007) The copies of the statements covered under this Article and of the tax depreciation schedule referred to in Article 140 (5) herein shall be submitted to the National Revenue Agency territorial directorate exercising competence over the place of registration of the receiving companies on a magnetic or optical data carrier, or by electronic means.Assets and Liabilities Transferred under Item 2of Article 139 HereinArticle 142. (1) The accounting profits or losses originating upon write-off of any assets and liabilities referred to in Item 2 of Article 139 herein, related to a permanent establishment of a resident company in another Member State of the European Community, shall not be recognized for tax purposes.(2) The temporary tax differences related to any assets and liabilities referred to in Paragraph 1 herein, shall not be recognized for tax purposes at the time of transformation and during the succeeding years.(3) For tax purposes, outside the cases referred to in Paragraph (1), the assets and liabilities referred to in Item 2 of Article 139 herein, available at the date of transformation, shall be considered as having been sold at market prices and shall be written off.(4) In the cases referred to in Paragraph (3), upon determination of the tax financial result, the accounting financial result shall be credited with the profit and shall be debited with the loss arrived at as a difference between the market price of the asset or liability and the accounting value thereof at the date of transformation. Any temporary tax differences related to the asset or liability shall be recognized during the last tax period according to the standard procedure established by this Act. Article 66 (1) and (2) herein shall apply upon determination of the tax financial result.Assets and Liabilities Transferred under Item 3of Article 139 HereinArticle 143. (1) The assets and liabilities referred to in Item 3 of Article 139 herein shall be valued for tax purposes at the receiving companies at the value of the said assets and liabilities determined according to national accounting legislation.(2) The tax depreciable assets referred to in Item 3 of Article 139 herein shall be posted in the tax depreciation schedule according to the standard procedure established by this Act.Carry-Forward of Tax LossesArticle 144. (1) Upon transformation under this Section, the receiving companies shall not have the right to carry forward the tax losses formed by the transferring companies.(2) Paragraph (1) shall not apply in the cases of merger by acquisition or merger by the formation of a new company under this Section, as a result of which a permanent establishment of a company from another Member State of the European Community commences the legal existence thereof in the country and the said company has not had a permanent establishment in the country before the transformation.Tax Losses by Permanent EstablishmentArticle 145. (1) Any tax losses not carried forward at the time of transformation, formed by a permanent establishment of a resident company in another Member State of the European Community, shall not be deducted.(2) Upon determination of the tax financial result, the accounting financial result shall be credited with the tax losses carried forward at the time of transformation, formed by a permanent establishment of a resident company in another Member State of the European Community, which have not been deducted from the profits of the permanent establishment.Regulation of Thin CapitalizationArticle 146. (1) Upon transformation under this Section, the receiving companies shall not have the right to recognize for tax purposes any unrecognized expenses on interest payments in the transferring companies resulting from application of the thin capitalization regime.(2) Paragraph (1) shall not apply in the cases of merger by acquisition or merger by the formation of a new company under this Section, as a result of which a permanent establishment of a company from another Member State of the European Community commences the legal existence thereof in the country and the said company has not had a permanent establishment in the country before the transformation.Tax Prepayments by Receiving CompaniesArticle 147. (1) After transformation under this Section, the receiving companies shall make quarterly tax prepayments in the year of transformation.(2) In the cases referred to in Article 144 (2) herein, the receiving companies shall make monthly or quarterly tax prepayments according to the standard procedure established by this Act on the basis of the tax financial result of the transferring companies.Write-Off of HoldingArticle 148. (1) Where a receiving company has a holding in the capital of a transferring company, the accounting profits or losses in connection with the write-off of the said holding in the capital shall not be recognized for tax purposes.(2) The income referred to in Paragraph (1) shall not be subject to levy of a tax withheld at source according to the procedure established by Part Three herein.Tax Treatment of Shareholders of Members of Transferring Companies andAcquired CompaniesArticle 149. (1) The accounting profits or losses originating at shareholders or members of transferring companies or acquired companies as a result of an acquisition of shares or interests in receiving or acquiring companies shall not be recognized for tax purposes in the year of accounting for the said profits or losses and shall form a temporary tax difference from a subsequent valuation.(2) The temporary tax differences, originating at the shareholders or members before the transformation, which are related to the written off shares or interests in the transferring companies or acquired companies, shall not be recognized for tax purposes at the time of transformation.(3) The temporary tax differences referred to in Paragraphs (1) and (2) shall be considered as having originated in respect of the newly acquired shares or interests and shall be recognized according to the standard procedure established by this Act.(4) The income accruing to any non-resident legal persons which are shareholders or members of resident transferring or acquired companies from acquisition of shares or interests as a result of transformation shall be taxed or shall be exempted from tax withheld at source according to the standard procedure established by this Act at the date of transformation.(5) The tax withheld at source referred to in Paragraph (4) shall be due from the shareholder or member upon disposition in any form whatsoever of the newly acquired shares or interests and shall be remitted within sixty days after any such disposition.(6) (Amended, SG No. 110/2007) On or before the 31st day of January of the relevant year, the non-resident legal persons referred to in Paragraphs (4), (5) and (8) shall submit a declaration to the Sofia Territorial Directorate of the National Revenue Agency, certifying thereby that the said persons have not disposed of the shares or interests newly acquired as a result of the transformation. Any such persons shall submit the declaration referred to in sentence one annually, until the year of disposition of the newly acquired shares or interests.(7) Upon failure to submit the declaration referred to in Paragraph (6) when due, in addition to becoming liable to the administrative sanction, for the purposes of this Act the non-resident legal person shall furthermore be presumed to have disposed of the newly acquired shares or interests.(8) (New, SG No. 110/2007) Upon acquisition of shares or interests as a result of transformation through partial division, income shall not accrue to a non-resident legal person, unless shared of the transferring company are cancelled upon the partial division. For the purposes of assessment of the tax at source upon subsequent disposition of the shares or interests referred to in sentence one, the documented cost of acquisition of the said shares or interests shall be zero.Taxation of Transferring Company upon Transfer of AssetsArticle 150. (1) The accounting profits or losses originating at a transferring company as a result of a transfer of assets shall not be recognized for tax purposes in the year of accounting for the said profits or losses and shall form a temporary tax difference from a subsequent valuation.(2) The temporary tax difference referred to in Paragraph (1) shall be considered as having originated in respect of the newly acquired shares or interests and shall be recognized for tax purposes according to the standard procedure established by the Act.(3) Where the shares or interests referred to in Paragraph (1) are held by the transferring company for an uninterrupted period of at least five years, the temporary tax difference referred to in Paragraph (1) shall not be recognized for tax purposes at the time of transformation and during the succeeding years.Tax EvasionArticle 151. The provisions of this Section shall not apply where the transformation has as its objective tax evasion or tax avoidance. Tax evasion shall be presumed, inter alia, where the transformation is not carried out for valid commercial reasons or where the said transformation conceals the disposition of assets.Section IIITransfer of Registered Office of European Company or EuropeanCooperative SocietyApplicabilityArticle 152. Within the meaning given by this Chapter, "transfer of the registered office of a European company or a European cooperative society" shall be an operation whereby:1. the company, without being dissolved or without incorporation of a new legal person, transfers the registered office thereof from the country to another Member State of the European Community, according to Article 8 of Council Regulation (EC) No 2157/2001 or according to Council Regulation (EC) No 1435/2003, while the assets and liabilities of the company must remain effectively connected with the permanent establishment in the country and the results of exploitation of the said assets must be involved upon determination of the tax financial result, or2. the company, without being dissolved or without incorporation of a new legal person, transfers the registered office thereof from another Member State of the European Community to the country according to Article 8 of Council Regulation (EC) No 2157/2001 or according to Council Regulation (EC) No 1435/2003, while the assets and liabilities of the company must remain effectively connected with the company which commences the legal existence thereof as a result of this operation, and the results of exploitation of the said assets must be involved upon determination of the tax financial result.Legal SuccessionArticle 153. (1) For tax purposes, upon transfer of the registered office of a European company or a European cooperative society under the terms established by Item 1 of Article 152 herein:1. all acts performed by the said company for the current period and the prior periods, including the adjustments of the tax financial result, shall be considered as having been performed by the permanent establishment;2. corporation tax shall not be levied on the company for the period from the beginning of the year until the date of the operation;3. corporation tax shall not be levied on the permanent establishment for the period commencing at the beginning of the year according to the standard procedure, and the activity carried out by the company in the year of the operation shall be considered as having been carried out by the permanent establishment;4. the permanent establishment shall have the right to carry forward any tax losses not carried forward and formed by the company according to the standard procedure.(2) For tax purposes, upon transfer of the registered office of a European company to a European cooperative society under the terms established by item 2 of Article 152 herein:1. all acts performed by the said permanent establishment for the current period and the prior periods, including the adjustments of the tax financial result, shall be considered as having been performed by the company;2. corporation tax shall not be levied on the permanent establishment for the period from the beginning of the year until the date of the operation;3. corporation tax shall not be levied on the company for the period commencing at the beginning of the year according to the standard procedure, and the activity carried out by the permanent establishment in the year of the operation shall be considered as having been carried out by the company;4. the company shall have the right to carry forward any tax losses not carried forward and formed by the permanent establishment according to the standard procedure.Provisions Applicable upon Transfer of Registered OfficeArticle 154. The provisions of Section II of this Chapter in respect of the assets and liabilities, profits and losses and temporary tax differences shall furthermore apply upon a transfer of the registered office of a European company or a European cooperative society.Chapter TwentySPECIFIC RULES FOR DETERMINATION OF TAX FINANCIAL RESULT UPON TRANSFERSBETWEEN PERMANENT ESTABLISHMENT IN COUNTRY AND ANOTHER DIVISION OF SAMEENTERPRISE SITUATED OUTSIDE COUNTRYIncome from Transfer to Another Division of EnterpriseArticle 155. (1) The accounting income, accounted for at market value and originating upon a transfer from a permanent establishment in the country to another division of the same enterprise situated outside the country, shall be recognized for tax purposes where:1. the particular transfer coincides with the ordinary transactions of the said permanent establishment with third parties, or2. the ordinary activity of the said permanent establishment consists in similar transfers to the other divisions of the enterprise.(2) Any accounting income arising from cash resources provided by the permanent establishment to another division of the same enterprise situated outside the country shall not be recognized for tax purposes with the exception of financial institutions for which raising of cash resources and extending of loans is a core activity.(3) Any accounting expense related to a transfer from a permanent establishment to another division of the same enterprise situated outside the country shall not be recognized for tax purposes where accounting income, which is recognized for tax purposes, does not arise at the said permanent establishment as a result of the transfer. Where, as a result of a transfer to another division of the same enterprise, situated outside the country, the permanent establishment charges accounting income at the amount of the costs actually incurred (at cost price), the accounting expenses charged in connection with the said transfer shall be recognized for tax purposes.Expenses upon Transfer from Another Part of EnterpriseArticle 156. (1) Any accounting expenses accounted for at market value in connection with any goods, services and rights which are the result of a transfer from another division of the same enterprise, situated outside the country, shall be recognized for tax purposes in the permanent establishment in the country where the said expenses are accounted for within the ordinary activity of the permanent establishment related to a sale of the transferred goods, services or rights in an altered or unaltered state.(2) Any accounting expenses, accounted for at market value and originating upon transfer of any goods and services from another division of the same enterprise, situated outside the country, to a permanent establishment in the country, shall be recognized for tax purposes in the permanent establishment where:1. the particular transfer coincides with the ordinary transactions of the said division of the enterprise with third parties, or2. the ordinary activity of the said division of the enterprise consists in similar transfers to the other divisions of the enterprise.(3) Any accounting expenses accounted for according to the costs actually incurred (cost price) and originating upon transfer of any services from another division of the same enterprise situated outside the country, outside the cases referred to in Paragraphs (1) and (2), shall be recognized for tax purposes in the permanent establishment in the country. Sentence one shall furthermore apply in respect of the administrative management services received in direct connection with the permanent establishment.(4) Any accounting expenses, accounted for at costs actually incurred (cost price) and originating upon transfer of rights related to know-how, patents and other items of intellectual or industrial property, from another division of the same enterprise situated outside the country, outside the cases referred to in Paragraph (1), shall be recognized for tax purposes in the permanent establishment in the country. Where the said items are produced or acquired by the branch of activity of the enterprise which transfers the said items and which specialized in the creation or acquisition of any such items, the accounting expenses, accounted for at market value, shall be recognized for tax purposes.(5) Where the rights transferred under Paragraph (4) satisfy the criteria for a tax intangible fixed asset, the expenses on the acquisition thereof under Paragraph (4) shall not be recognized for tax purposes and the amounts shall be posted in the tax depreciation schedule. The tax depreciable value of the said rights shall be determined according to the standard procedure established by this Act.(6) Any accounting expenses arising from cash resources received in the permanent establishment from another division of the same enterprise situated outside the country shall not be recognized for tax purposes with the exception of:1. the financial institutions, for which raising of cash resources and extending of loans is a core activity, or2. the cases in which the cash resources are provided by a third party as an interest-bearing loan for the purposes of the permanent establishment and are used exclusively in the activity of the permanent establishment; in such case, the accounting expenses accounted for at the amount of the interest payments due to the third party shall be recognized for tax purposes upon compliance with the other provisions of this Act.Treatment of Assets upon Transfer from or toAnother Part of EnterpriseArticle 157. (1) Any assets provided to the permanent establishment in the country by another division of the same enterprise situated outside the country, which are related to the activity of the permanent establishment, outside the cases referred to in Article 156 (1) herein, shall be valued for tax purposes at the costs actually incurred (cost price) by the division of the enterprise transferring the said assets. The tax depreciable assets referred to in sentence once, which are used in the activity of the permanent establishment for a period of at least two years, shall be posted in the tax depreciation schedule according to the standard procedure established by this Act.(2) Where the tax depreciable assets referred to in Paragraph (1) are provided for temporary use for a period not exceeding two years, the permanent establishment in the country shall be recognized, for tax purposes, the accounting expenses charged to the amount of the depreciations charged by the transferring division of the enterprise for the said assets. The expenses charged may not exceed the annual tax depreciation which would have been charged if the maximum permissible annual rates of tax depreciation under Article 55 herein were used.(3) For tax purposes, the assets transferred shall be considered as having been sold at market prices at the time of transfer of assets manufactured or acquired by the permanent establishment in the country to another division of the enterprise situated outside the country and shall be written off.(4) In the cases referred to in Paragraph (3), upon determination of the tax financial result, the accounting financial result of the permanent establishment shall be credited with the profit and shall be debited with the loss arrived at as a difference between the market price of the asset and the accounting value thereof at the date of transfer. The temporary tax differences related to the said asset shall be recognized according to the standard procedure established by this Act. Article 66 (1) and (2) herein shall apply upon determination of the tax financial result.(5) Paragraphs (3) and (4) shall not apply where accounting income (profit) or costs (losses) originate from the transfer of the assets. The standard procedure established by this Act shall apply in such cases.Chapter Twenty-OneTAX REGULATION UPON DISSOLUTION THROUGH LIQUIDATION OR THROUGHADJUDICATION IN BANKRUPTCY AND UPON DISTRIBUTION OF SHARE IN LIQUIDATIONSURPLUSSection IGeneral DispositionsArticle 158. Upon dissolution through liquidation or through adjudication in bankruptcy, for the period until the expungement thereof, the taxable person shall fulfil the obligations thereof according to the standard procedure established by this Act and in compliance with the requirements of this Chapter, inter alia submitting the requisite financial statements, which shall be prepared and presented according to accounting legislation.Section IICorporation Tax upon DissolutionAssessment of Tax upon DissolutionArticle 159. (1) Corporation tax shall be due at the date of entry of the dissolution in the Commercial Register.(2) The corporation tax referred to in Paragraph (1) shall be assessed on the basis of the tax profit for the period from the beginning of the year until the date of entry of the dissolution.(3) The prepayments remitted since the beginning of the year and until the date of entry of the dissolution shall be deducted upon assessment of the tax.Remittance of Tax upon DissolutionArticle 160. (1) The corporation tax due under Article 159 herein shall be remitted within thirty days after the date of entry of the dissolution.(2) The corporation tax remitted upon dissolution shall be deducted from the annual corporation tax due for the year of dissolution or from the corporation tax due for the last tax period, where the date of submission of the motion for expungement upon liquidation or the date of expungement upon bankruptcy, as the case may be, is in one and the same year as the date of dissolution.(3) Where the date of dissolution and the date of submission of the motion for expungement upon liquidation, or the date of dissolution upon bankruptcy, as the case may be, are in different years, the financial statement prepared as at the date of dissolution and the financial statement prepared as at the 31st day of December of the year of dissolution of the taxable person shall be submitted with the annual tax return on the year of dissolution.Section IIICorporation Tax on Last Tax PeriodLast Tax PeriodArticle 161. (1) The last tax period of any taxable person dissolved through liquidation shall commence on the 1st day of January of the year in which the motion for expungement under Article 273 (1) of the Commerce Act was submitted and shall end on the date of submission of the said motion.(2) The last tax period of any taxable person dissolved through adjudication in bankruptcy shall commence on the 1st day of January of the year in which the expungement was effected and shall end on the date of expungement.(3) The last tax period of any permanent establishment of a non-resident person shall commence on the 1st day of January of the year in which the activity of the said establishment was discontinued and shall end on the date of discontinuance of the said activity.(4) The taxable person shall be liable to corporation tax in respect of the tax profit realized during the last tax period according to the standard procedure established by this Act. The corporation tax due shall be final.(5) For tax purposes, the assets manufactured or acquired by the permanent establishment in the country at the date of dissolution shall be considered as having been sold at market prices and shall be written off. Upon determination of the tax financial result for the last tax period of the permanent establishment, the tax financial result shall be credited with the profit and shall be debited with the loss arrived at as a difference between the market price of the assets referred to in sentence one and the accounting value of the said assets at the date of transformation. The temporary tax differences related to the asset shall be recognized during the last tax period according to the standard procedure established by this Act. Article 66 (1) and (2) herein shall apply upon determination of the tax financial result.Declaring of Tax on Last Tax PeriodArticle 162. (1) The tax return on the last tax period, determined under Article 161 (1) herein, shall be submitted on the date of submission of the motion for expungement together with a copy of the said motion.(2) The tax return on the last tax period, as determined under Article 161 (2) herein, shall be submitted by the holder of the position of trustee in bankruptcy within thirty days after the date of expungement of the taxable person together with a copy of the judgement of court on the expungement.(3) The tax return on the last tax period, as determined under Article 161 (3) herein, shall be submitted on the date of discontinuance of the activity.(4) Where the date of submission of the motion for expungement upon liquidation or the date of expungement upon bankruptcy, as the case may be, or the discontinuance of the activity of a permanent establishment is before the 31st day of March and the annual tax return for the last preceding year has not been submitted, the taxable person or the holder of the position of trustee in bankruptcy shall submit the said return within the time limits referred to in Paragraphs (1), (2) and (3).(5) Where the date of dissolution and the date of submission of the motion for expungement upon liquidation, or the date of expungement upon bankruptcy, as the case may be, are in one and the same year, the financial statement prepared at the date of dissolution and the financial statement prepared at the date of submission of the motion for expungement or at the date of expungement, as the case may be, shall be submitted with the tax return referred to in Paragraphs (1) and (2).Remittance of Tax on Last Tax PeriodArticle 163. (1) The corporation tax due on the last tax period, determined under Article 161 (1) herein, shall be remitted on or before the date of submission of the motion for expungement of the taxable person. The said tax shall be final.(2) In the cases referred to in Article 161 (2) herein, the corporation tax due on the last tax period shall be remitted on or before the date of expungement.(3) In the cases referred to in Article 161 (3) herein, the corporation tax due on the last tax period shall be remitted on or before the date of discontinuance of activity. The said tax shall be final.(4) Where the date of submission of the motion for expungement upon liquidation or the date of expungement upon bankruptcy or the discontinuance of activity of a permanent establishment is before the 31st day of March and the corporation tax for the preceding year has not been remitted, the taxable person shall remit the corporation tax for the preceding year within the time limits referred to in Paragraphs (1), (2) and (3).Tax Treatment upon Continuation of Activity after Date of Submission ofMotion for Expungement by Taxable Person Dissolved through LiquidationArticle 164. (1) Any taxable person, dissolved through liquidation, which continues the activity thereof after submission of a motion for expungement, shall fulfil the obligations thereof according to the standard procedure established by this Act for the period from the date of submission of the motion for expungement until the date of expungement, inter alia declaring and remitting the corporation tax due. The liquidator shall incur solidary liability with the taxable person for the tax liabilities of the said person which have arisen in connection with the continuation of activity.(2) The last period for tax purposes in the cases referred to in Paragraph (1) shall commence on the 1st day of January of the year in which the expungement was effected and shall end on the date of expungement or shall commence on the date of submission of the motion for expungement and shall end on the date of expungement, when the said two dates are in one and the same year.(3) The taxable person shall be liable to corporation tax in respect of the tax profit realized during the last tax period under Paragraph (2) according to the standard procedure established by this Act. The said tax shall be final.(4) The tax return on the last period for tax purposes in the cases referred to in Paragraph (1) shall be submitted by the holder of the position of liquidator within thirty days after the date of expungement of the taxable person together with a copy of the judgment of court on the expungement. Where the date of expungement is before the 31st day of March and the annual tax return on the preceding year has not been submitted, the holder of the position of liquidator shall submit the said return within the time limit referred to in sentence one.(5) The corporation tax due for the last period for tax purposes in the cases referred to in Paragraph (1) shall be remitted on or before the date of expungement. Where the date of expungement is before the 31st day of March and the corporation tax for the preceding year has not been remitted, the taxable person shall remit the corporation tax for the preceding year within the time limit referred to in sentence one.Tax Treatment upon Distribution of Share in Liquidation SurplusArticle 165. (1) The assets distributed as a share in a liquidation surplus at the time of distribution for tax purposes shall be considered as having been sold by the taxable person at market prices and shall be written off.(2) In the cases referred to in Paragraph (1), upon determination of the tax financial result, the accounting financial result shall be credited with the profit and shall be debited with the loss arrived at as a difference between the market price of the assets and the accounting value thereof at the date of distribution of the share in a liquidation surplus. The temporary tax differences related to the said assets shall be recognized according to the standard procedure established by the Act. Article 66 (1) and (2) herein shall apply upon determination of the tax financial result.(3) Any accounting income and expenses, accounted for in connection with the distribution of a share in a liquidation surplus in the form of assets, shall not be recognized for tax purposes.Chapter Twenty-TwoREDUCTION, RETENTION AND EXEMPTION FROM LEVY OF CORPORATION TAXSection IGeneral DispositionsConcept of RetentionArticle 166. "Corporation tax retention" shall be the right of any taxable person not to remit to the executive budget the amounts of corporation tax as assessed according to the procedure established by this Act, which subsist in the patrimony of the taxable person and are spent for purposes prescribed by a law.General Requirement for Corporation Tax Retention or ReductionArticle 167. (1) Corporation tax shall be retained or reduced and, respectively, the accounting financial result shall be debited according to the procedure established by this Chapter, subject to the condition that the taxable person does not incur at the 31st day of December of the relevant year:1. any coercively enforceable public obligations, and2. any obligations for sanctions under effective penalty decrees related to violation of statutory instruments regarding public obligations, and3. any interest payments in connection with a failure to remit the obligations referred to in Items 1 and 2 when due.(2) Fulfilment of the requirement covered under Paragraph (1) shall be certified by the taxable person in the annual tax return.Accounting for Retained and Reduced Corporation TaxArticle 168. (1) The retained corporation tax and the corporation tax reduction according to the procedure established by this Chapter shall be accounted for in owners' equity.(2) (Repealed, SG No. 110/2007). Partial Recognition of Undistributable Income or ExpensesArticle 169. (1) The portion of the undistributable income or expenses, corresponding to the activities in respect of which the corporation tax retention is enjoyed, shall be arrived at by multiplying the total amount of the undistributable income or expenses by the proportion of the net sales accruing from the activities in respect of which the corporation tax retention is enjoyed and all net sales.(2) The undistributable amounts whereby the accounting financial result is adjusted, which cannot be related to any single specific activity and which are associated with the performance of an activity in respect of which a retention is enjoyed, shall be allocated to the activity in respect of which the corporation tax is retained, and the tax financial result in respect of the said activity shall be determined on the basis of the proportion referred to in Paragraph (1).Declaring of Retained or Reduced Corporation TaxArticle 170. Where any taxable person is allowed to retain or reduce corporation tax on different grounds according to the procedure established by this Chapter, the said person shall mandatorily declare in the annual tax return the sequence in which the said person has enjoyed the different grounds for corporation tax retention or reduction.Retention of Additionally Ascertained Corporation TaxArticle 171. (1) Any taxable person, who has been allowed to retain corporation tax in a prior year, shall furthermore have the right to retention in respect of the additionally ascertained undeclared corporation tax for the relevant prior year, subject to the condition that the said person fulfils all requirements provided for in this Chapter for the relevant corporation tax retention.(2) The time limit for fulfilment of the said requirements shall begin to run as from the date of ascertainment of the additional corporation tax.Cessation of Right to RetentionArticle 172. (1) The right to reduction or retention according to the procedure established by this Chapter shall cease upon transformation of a taxable person, with the exception of transformation through change of the legal form according to the procedure established by Article 264 of the Commerce Act, as well as upon transfer of an enterprise under Article 15 of the Commerce Act.(2) Paragraph (1) shall furthermore apply upon restructuring of cooperative organizations.Non-fulfilment of RequirementsArticle 173. (1) Where any requirements of this Chapter for subsequent use (spending) of retained corporation tax are not fulfilled, the said tax shall be due according to the standard procedure established by this Act for the year for which the said tax applies.(2) Paragraph (1) shall not apply where, in the cases of transformation, the receiving companies or newly formed companies fulfil the obligations of the transferring companies in compliance with the terms and procedure established by this Chapter, referring to the transferring companies. In the cases referred to in sentence one, the receiving companies or newly formed companies shall incur solidary liability for the retained corporation tax of the transmitting companies.(3) Paragraph (2) shall furthermore apply upon restructuring of cooperative organizations.Section IIExemption from Levy of Corporation TaxCollective Investment Schemes and Investment Companiesof Closed-End TypeArticle 174. Any collective investment scheme, which has been admitted to public offering in the Republic of Bulgaria, and any licensed investment company of the closed-end type under the Public Offering of Securities Act, shall be exempt from the levy of corporation tax.Special Purpose Investment CompaniesArticle 175. Any special purpose investment company under the Special Purpose Investment Companies Act shall be exempt from the levy of corporation tax.Bulgarian Red CrossArticle 176. The Bulgarian Red Cross shall be exempt from the levy of corporation tax.Section IIIGeneral Tax ReliefsTax Incentives upon Hiring of Unemployed PersonsArticle 177. (1) Any taxable person shall have the right to debit the accounting financial result thereof upon determination of the tax financial result, where the said person has hired a person under an employment relationship for not less than twelve successive months who, at the time of the hiring thereof, was:1. registered as unemployed for more than one year, or2. a registered unemployed person who had attained the age of 50 years, or3. an unemployed person of reduced working capacity.(2) The debiting shall be performed by the amounts paid for labour remuneration and the contributions remitted for the account of the employer to the public social insurance funds and the National Health Insurance Fund during the first twelve months after the hiring. The said debiting shall be performed on a single occasion during the year wherein the twelve-month period lapses.(3) Debiting shall not be performed in respect of any amounts received under the Employment Promotion Act.(4) Debiting shall not be performed where tax relief under Article 192 herein has been enjoyed in respect of the persons hired.Enterprises Hiring People with DisabilitiesArticle 178. (1) Any legal person, which is a specialized enterprise or a cooperative within the meaning given by the Integration of Persons with Disabilities Act, which as at the 31st day of December of the relevant year, is affiliated to the nationally representative organizations of and for people with disabilities, shall be allowed to retain 100 per cent of the corporation tax due there from if:1. not less than 20 per cent of the total number of employees are blind and visually impaired persons;2. not less than 30 per cent of the total number of employees are hearing-impaired persons;3. not less than 50 per cent of the total number of employees are people with other disabilities.(2) The legal persons referred to in Paragraph (1) shall be allowed to retain the corporation tax due there from in proportion to the number of people with disabilities or occupational rehabilitees to the total of number of employees, where the conditions for the number of hired persons under Paragraph (1) are not fulfilled.(3) Retention shall be admissible where the tax retained is spent entirely on integration of people with disabilities or on the maintenance and creation of jobs for occupational rehabilitees during the two years next succeeding the year for which the retention is enjoyed. The said resources shall be planned, spent and accounted for by ordinances of the national organizations of and for people with disabilities in consultation with the Minister of Finance.Agricultural ProducersArticle 179. (1) Any legal person, which is registered as an agricultural producer, shall be allowed to retain 60 per cent of the corporation tax due there from in respect of the tax profit derived thereby from unprocessed plant and animal produce, inter alia from apicture, sericulture, freshwater fisheries in man-made water bodies and hothouse horticulture.(2) Retention shall be admissible where the tax retained is invested in tax tangible and intangible fixed assets needed for performance of the activities specified in Paragraph (1) not later than before the end of the year next succeeding the year for which the retention is enjoyed.Air Traffic Services AuthorityArticle 180. (1) The Air Traffic Services Authority State-Owned Enterprise shall be allowed to retain 60 per cent of the corporation tax due there from in respect of the tax profit derived thereby from the core activity thereof.(2) Retention shall be admissible where the tax retained is invested in and spent on implementation of the European programmes for integration and harmonization of the national air traffic control systems of the European countries and on maintenance of the pecuniary reserve provided for in the Civil Aviation Act.Social and Health Insurance FundsArticle 181. (1) Any social and health insurance fund, which has been established by a law, shall be allowed to retain 50 per cent of the corporation tax due there from in respect of the economic activity thereof which is directly related or auxiliary to the implementation of the core activity thereof.(2) Retention shall be admissible where the tax retained is invested in the core activity not later than before the end of the year next succeeding the year for which the retention is enjoyed.Section IV(Heading amended, SG No. 110/2007, effective 1.01.2007) De Minimis or Regional State Aid in the Form of Tax ReliefsTaxable Persons which May Not Enjoy Tax ReliefsArticle 182. (1) (Redesignated from Article 182 and amended, SG No. 110/2007, effective 1.01.2007) A tax relief constituting regional aid shall not apply in respect of any taxable persons which:1. are active in the sectors of coal, steel, shipbuilding, synthetic fibres manufacture, fisheries, as well as production of agricultural products listed in Annex I to the Treaty establishing the European Community, for the respective activity, or2. (amended, SG No. 110/2007, effective 1.01.2007) are placed in liquidation, or are subject to rehabilitation proceedings, or3. are defined as enterprises in difficulty.(2) (New, SG No. 110/2007, effective 1.01.2007) A tax relief constituting de minimis aid shall not apply in respect of:1. any taxable persons which are active in the fishery and aquaculture sector according to Council Regulation (EC) No 104/2000 on the common organization of the markets in fishery and aquaculture products;2. any taxable persons which are active in the primary production of agricultural products listed in Annex I to the Treaty establishing the European Community; 3. any taxable persons which are active in the processing and marketing of agricultural products listed in Annex I to the Treaty establishing the European Community; 4. any taxable persons which are active in the coal sector according to Council Regulation (EC) No 1407/2002 on State aid to the coal industry;5. any enterprise in difficulty;6. the investment in any road freight transport vehicles, where provided by a taxable person performing road freight transport for hire or reward;7. investment in any assets used in export-related activities towards third countries or Member States.(3) (New, SG No. 110/2007, effective 1.01.2007) Any tax relief constituting regional aid may not be enjoyed, either, by a taxable person in respect of which any of the conditions under Paragraph (1) occurs during the period of implementation of the relevant initial investment.(4) (New, SG No. 110/2007, effective 1.01.2007) Any tax relief constituting de minimis aid may not be enjoyed, either, by a taxable person in respect of which a condition under Paragraph (2) occurs during the period of investment.Municipalities with Unemployment Rate Above National AverageArticle 183. (1) The municipalities where the rate of unemployment is by 35 per cent or more higher than the national average shall be designated annually by an order of the Minister of Finance on a motion by the Minister of Labour and Social Policy, which shall be promulgated in the State Gazette.(2) The municipalities where the rate of unemployment is by 50 per cent or more higher than the national average shall be designated annually by an order of the Minister of Finance on a motion by the Minister of Labour and Social Policy, which shall be promulgated in the State Gazette.(3) A municipality whereof the administrative centre is situated in another municipality shall be included in the list referred to in Paragraphs (1) and (2) on the basis of the average weighted level of unemployment in the relevant municipalities, determined on the basis of the size of the economically active population therein.Tax Relief for Carrying Out Manufacturing Activities in Municipalitieswith Unemployment Rate Above National AverageArticle 184. (Amended, SG No. 110/2007, effective 1.01.2007) Any taxable person shall be allowed to retain up to 100 per cent of the corporation tax [due there from] in respect of the tax profit derived thereby from the manufacturing activities carried out, including processing of materials supplied by customers, where the following conditions are simultaneously fulfilled:1. the taxable person carries out manufacturing activities solely in municipalities where the rate of unemployment for the year preceding the current year was by 35 per cent or more higher than the national average for the same period;2. (amended, SG No. 110/2007, effective 1.01.2007) the conditions covered under:(a) Article 188 - in the cases of de minimis aid, or(b) Article 189 - in the cases of regional aidare fulfilled.Specific Cases of RetentionArticle 185. (1) Where a municipality drops out of the scope of municipalities referred to in Article 183 herein as a result of an increase in employment, the person which has acquired the right to corporation tax retention shall preserve the said right during the next five successive years, reckoned from the year during which the region drops out of the list, subject to fulfilment of the rest of the conditions for retention.(2) Where the taxable person satisfied the conditions referred to in Item 1 of Article 184 herein in the year preceding the year in which the municipality dropped out of the scope of municipalities referred to in Article 183 herein but did not carry out manufacturing activity during the said period owing to performance of preparatory work and the said manufacturing activity commences during a subsequent year, the right to tax retention shall accrue as from the year of commencement of the manufacturing activity and shall be preserved during the next four successive years, subject to fulfilment of the rest of the conditions for retention.Investment Tax CreditArticle 186. (Amended, SG No. 110/2007, effective 1.01.2007) (1) Any taxable person shall have the right to reduce the corporation tax due there from for 2007 by up to 10 per cent of the value of the material and immaterial fixed assets acquired according to accounting legislation, where the conditions covered under Article 188 herein are fulfilled.(2) The right referred to in Paragraph (1) shall accrue subject to the condition that the assets acquired are used in an activity implemented in municipalities where the rate of unemployment for the year preceding the current year was by 50 per cent or more higher than the national average for the same period.Tax Relief for CooperativesArticle 187. (1) (Amended and supplemented, SG No. 110/2007, effective 1.01.2007) Any cooperative and any enterprise formed thereby, which is affiliated to a cooperative union within the meaning given by Chapter Four of the Cooperatives Act, shall be allowed to retain up to 60 per cent of the corporation tax [due there from] where the conditions for de minimis aid under Articles 188 herein are fulfilled.(2) Any cooperative and any enterprise formed thereby shall transfer 50 per cent of the corporation tax so retained to the investment funds of the cooperative unions within the time limits for crediting the said tax to Budget Revenue.(3) Annually, on or before the 31st day of March, the cooperative unions shall account to the Ministry of Finance for the raising and the spending of the corporation tax so retained on the assigned purpose. Should it be established that the conditions for retention have not been fulfilled, the tax retained which has accrued to the cooperative unions shall be refunded thereby to the executive budget with the interest due.Tax Relief Constituting De Minimis AidArticle 188. (Amended, SG No. 110/2007, effective 1.01.2007) (1) A tax relief constituting de minimis aid shall be available where the sum total of de minimis aids received by the taxable person during the last three years, including the current years, regardless of the form or source of acquisition of the said aids, does not exceed the lev equivalent of EUR 200,000, and in respect of taxable persons in the road transport sector, the lev equivalent of EUR 100,000, determined according to the official exchange rate of the lev against the euro. These ceilings shall apply regardless of whether the aid is financed in whole or in part by resources of the European Community. The sum total of de minimis aids received shall furthermore include the reduced or retained corporation tax due from the taxable person for the last three years, including the corporation tax which is subject to reduction or retention for the current year. The sum total of de minimis aids received shall not include the retained corporation tax in respect of which the conditions of Article 189 herein are fulfilled.(2) The retained tax under Article 184 herein and the part of the retained tax under Article 187 herein, which is not transferred to the investment funds of the cooperative unions, must be invested in material or immaterial fixed assets according to accounting legislation within four years after the beginning of the year for which the tax is retained.(3) The retained tax, invested in the assets referred to in Paragraph (2), and the reduction of the tax under Article 186 herein, shall be cumulated with other State aid approved by decision of the European Commission or authorized under Article 9 of the State Aids Act in respect of the said assets, up to the maximum permissible intensity of the aid determined by the National Regional State aid map (OJ No. C 73 of 30 March 2007).(4) The taxable person shall declare the amount of de minimis aids received, regardless of the form or source of acquisition of the said aids, during the last three years, including the current year, in the annual tax return for the year for which the corporation tax is retained.Tax Relief Constituting Regional AidArticle 189. (Amended, SG No. 110/2007, effective 1.01.2007) (1) Taxable persons must fulfil the following conditions for the grant of regional aid:1. the retained corporation tax must be invested in material and immaterial assets which form part of an initial investment;2. the initial investment must be made within four years after the beginning of the year for which the tax was retained;3. the initial investment must be made in municipalities where the rate of unemployment for the year of retention is by 35 per cent or more higher than the national average for the same period;4. the activity related to the initial investment must continue to be implemented in the respective municipality for a period of at least five years after the year of completion of the initial investment; this circumstance shall be declared annually by the annual tax returns until the lapse of the five-year period;5. at least 25 per cent of the value of the material and immaterial assets forming part of the initial investment must be self-financed or debt-financed by the taxable person; the corporation tax retained, as well as other resources containing any State aid element whatsoever, shall not be treated as self-financing or debt-financing;6. the material and immaterial forming part of the initial investment must have been acquired under market conditions not differing from the conditions between unrelated parties; the immaterial assets forming part of the initial investment must be depreciable assets;7. the value of the eligible expenditure on the immaterial assets forming part of the initial investment must not exceed 50 per cent of the sum total of eligible expenditure on the material and immaterial assets forming part of the initial investment;8. the immaterial assets forming part of the initial investment must be used solely in the activity of the taxable person and must be included in the assets thereof for a period of at least five years;9. the tax retained must not exceed 50 per cent of the present value of the material and immaterial assets forming part of the initial investment, determined at the 31st day of December of the year of retention; the interest rate for the purposes of determination of the present value of the initial investment shall be the reference interest rate for the year of retention set by the European Commission;10. the projected amount of the initial investment and the period of implementation thereof shall be declared by the annual tax return for the year for which the corporation tax is retained.(2) The retained corporation tax shall be cumulated with other State aid approved by decision of the European Commission or authorized under Article 9 of the State Aids Act in respect of the same initial investment, up to the maximum permissible intensity of the aid determined by the National Regional State aid map.(3) In the cases where the tax relief is granted for a large investment project which has received aid from all sources whereof the total value exceeds the lev equivalent of EUR 37.5 million, determined according to the official exchange rate of the lev against the euro, the tax relief may be enjoyed for the relevant year solely if:1. the taxable person has notified the revenue authority of the project at the latest before commencement of the implementation thereof;2. a positive decision from the European Commission has been received following a notification procedure provided for in Article 88 (3) of the Treaty establishing the European Community. The Minister of Finance shall inform the European Commission according to the procedures established in the State Aids Act. The taxable person shall be obligated to provide the Minister of Finance with the information necessary for the transmission of a notification to the European Commission.(4) Where Paragraph (3) must not be applied to a large investment project, the tax relief may be enjoyed solely if the adjusted regional aid ceiling for large investment project is complied with as laid down in the Decision of the European Commission approving a National Regional State aid map.(5) For the purposes of Paragraph (3), the value of the aid and the value of the eligible expenditure on the material and immaterial assets included in a large investment project shall be determined at present value at the date of notification of the European Commission according to the procedure established by the Article 88 (3) of the Treaty establishing the European Community. For the purposes of Paragraph (4), the value of the aid and the value of the eligible expenditure on the material and immaterial assets included in a large investment project shall be determined at present value at the date of commencement of the implementation of the project.Restrictions upon Enjoyment of Tax ReliefsArticle 190. (Amended, SG No. 110/2007, effective 1.01.2007) (1) A taxable person may not enjoy more than one tax relief under this Section during one and the same year.(2) The assets in which a tax retained according to Article 188 (2) herein is invested shall be excluded from the scope of the initial investment.Section VTax Reliefs Satisfying Requirements for Permissible State Aid forEmploymentTaxable Persons which May Not Enjoy Tax ReliefsArticle 191. The tax relief under this Section may not be enjoyed by any taxable persons which:1. carry out activities in the sectors of coal, steel, transport and shipbuilding, for the respective activity, or2. are subject to bankruptcy proceedings, are placed in liquidation, or are subject to rehabilitation proceedings, or3. are defined as enterprises in difficulty, or4. receive any aids to export-related activities, namely aids directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current expenditure linked to export activity, or5. receive any aids contingent upon the use of domestic over imported goods.Tax Relief for Employment PromotionArticle 192. (1) Upon determination of the tax financial result, the accounting financial result may be debited with the compulsory social insurance contributions remitted for the current year for the account of the employer in respect of the newly created jobs, where the conditions covered under Article 193 herein are fulfilled. The said reduction shall be enjoyable on a single occasion in the year during which the persons are appointed.(2) The right referred to in Paragraph (1) shall accrue subject to the condition that the jobs have been created in municipalities where the rate of unemployment for the year preceding the current year is by 50 per cent or more higher than the national average for the same period.General ConditionsArticle 193. (1) Any taxable persons which apply this Section must fulfil the conditions for the grant of State aid for employment according to European Commission Regulation (EC) No 2204/2002, including:1. the average number of employees for the current year must have increased compared to the preceding year as a result of the newly created jobs, and persons registered as unemployed must be appointed to the newly created jobs under an employment contract;2. the newly created jobs must be maintained for a minimum period of three years;3. the State aid referred to in Article 192 herein, together with other State aids for employment in respect of the same newly created jobs, must not exceed 50 per cent of the relevant percentage according to the applicable regional aid map, as adopted by a Council of Ministers decree, of the cost of wages and compulsory social insurance contributions for the newly created jobs for two years;4. the State aid referred to in Article 192 herein, together with other regional aids and State aids for employment, must not exceed 50 per cent of the relevant percentage according to the applicable regional aid map, as adopted by a Council of Ministers decree, of the sum total of the initial investment and the cost of wages and compulsory social insurance contributions for newly created jobs, related to the initial investment, for two years.(2) Where the State aid for employment referred to in Article 192 herein, including other State aids for employment, exceeds BGN 30 million for three years, the reduction shall be valid where the conditions under this Section are fulfilled and the taxable person has been granted a permissibility authorization by the European Commission under the terms and according to the procedure established by the State Aids Act.(3) The fulfilment of the conditions under this Section shall be declared by the annual tax return.PART THREEWITHHOLDING TAXChapter Twenty-ThreeSCOPE OF TAXATIONWithholding Tax on Income from Dividend and Shares in LiquidationSurplusArticle 194. (1) A tax withheld at source shall be levied on any dividends and shares in a liquidation surplus, as distributed (apportioned) by any resident legal person in favour of:1. any non-resident legal persons, with the exception of the cases where the dividends accrue to a non-resident legal person through a permanent establishment in the country;2. any resident legal persons which are not merchants, including any municipalities.(2) The tax referred to in Paragraph (1) shall be final and shall be withheld by the resident legal persons distributing dividends or shares in a liquidation surplus.(3) Paragraph (1) shall not apply where the dividends and shares in a liquidation surplus are distributed in favour of:1. any resident legal person which participates in the capital of the company as a representative of the State;2. any common fund.Tax Withheld on Income of Non-resident PersonsArticle 195. (1) Any income which has its source inside the country, referred to in Article 12 (2), (3), (5) and (8) herein, accruing to any non-resident legal person, were not accruing through a permanent establishment, shall be subject to levy of a tax withheld at source which shall be final.(2) The tax referred to in Paragraph (1) shall be withheld by the resident legal persons, the sole traders or the permanent establishments in the country which charge the income to the non-resident legal persons, with the exception of the income referred to in Article 12 (3) and (8) herein.(3) Where the payer of the income is not a taxable person covered under Article 2 herein and in respect of the income referred to in Article 12 (3) and (8) herein, the tax shall be withheld from the recipient of the income.(4) Paragraphs (1) and (2) shall furthermore apply where the non-resident person, acting through a permanent establishment, charges the said income to other divisions of the enterprise thereof situated outside the country, with the exception of the cases where accounting expenses are not recognized for tax purposes or accounting expenses or assets, accounted for at the costs actually incurred (cost price) are recognized for tax purposes of a permanent establishment.(5) The prepayments in connection with the income referred to in Paragraph (1) shall not be subject to levy of a tax withheld at source.Securities Traded on Regulated MarketArticle 196. Any income from disposition of shares in public companies, negotiable rights attaching to shares in public companies, and shares in and units of collective investment schemes, shall not attract a tax withheld at source where the said disposition is effected on a regulated Bulgarian securities market.Chapter Twenty-FourTAXABLE AMOUNTTaxable Amount for Withholding Tax on Dividend IncomeArticle 197. The taxable amount for assessment of the tax withheld at source on any income accruing from dividends shall be the gross amount of the dividends distributed.Taxable Amount for Withholding Tax on Liquidation Surplus ShareArticle 198. The taxable amount for assessment of the tax withheld at source on any income accruing from shares in a liquidation surplus shall be the difference between the market price of the claim by the relevant shareholder or member and the documented cost of acquisition of the shares or interests thereof.Taxable Amount for Withholding Tax on Non-resident Persons' IncomeArticle 199. (1) The taxable amount for assessment of the tax withheld at source on the income referred to in Article 195 (1) herein shall be the gross amount of the said income, with the exception of the cases referred to in Paragraphs (3) and (4).(2) The taxable amount for assessment of the tax withheld at source on any income accruing to any non-resident legal persons from interest payments under financial lease contracts, in the cases where the contract does not stipulate the rate of the said interest, shall be determined on the basis of the market rate of interest.(3) The taxable amount for assessment of the tax withheld at source on any income accruing to any non-resident legal persons from acts of disposition of financial assets shall be the positive difference between the selling price of the said assets and the documented cost of acquisition thereof.(4) The taxable amount for assessment of the tax withheld at source on any income accruing to any non-resident legal persons from disposition of immovable property shall be the positive difference between the selling price and the documented cost of acquisition of the immovable property.(5) The selling price, for the purposes of Paragraphs (3) and (4), shall be the valuable consideration under the transaction, including the reward other than money, which shall be valued at market prices as at the date of charging of the income.(6) Upon termination of a financial lease contract before expiry of the term of validity thereof and without passing of the right of ownership to the relevant assets which are subject of the contract, the non-refundable lease payments shall be considered income from use of property acquired by the non-resident legal person at the time of termination. The withholding tax on the income from interest payments, remitted until the time of termination of the lease contract, shall be deducted from the withholding tax due on income from use of the property.Chapter Twenty-FiveRATES OF TAXRates of TaxArticle 200. (1) (Amended, SG No. 110/2007) The rate of tax on the income covered under Article 194 herein shall be 5 per cent.(2) The rate of tax on the income covered under Article 195 herein shall be 10 per cent.Chapter Twenty-SixDECLARING OF TAXDeclaring of Tax. Certificate on Tax Withheld onNon-resident Persons' IncomeArticle 201. (1) (Supplemented, SG No. 110/2007) The persons, who or which have withheld and remitted the tax at source under Articles 194 and 195 herein, and the persons who or which have charged the income referred to in Article 12 (3) and (8) herein, shall declare this circumstance to the National Revenue Agency territorial directorate exercising competence over the place of registration or over the place where the payer of the income is registrable, by means of a declaration in a standard form. Any such declaration shall be submitted each quarter not later than at the end of the month next succeeding the quarter during which the tax was remitted.(2) Where the payer of the income is not registrable, the tax declaration shall be submitted to the Sofia Territorial Directorate of the National Revenue Agency.(3) In the cases where the payer of the income is a person who or which is not obligated to withhold and remit a tax, the declaration shall be submitted by the recipient of the income before submission of the request for the issuance of a certificate referred to in Paragraph (4) or within the time limit referred to in Paragraph (1), whichever of the two is the earlier.(4) A certificate on the tax remitted according to the procedure established by this Act on income accruing to non-resident legal persons shall be issued in a standard form at the request of the interested party. Any such certificate shall be issued by the National Revenue Agency territorial directorate where the tax is subject to remittance.Chapter Twenty-SevenTAX REMITTANCETax RemittanceArticle 202. (1) Any payers of income withholding the tax at source under Article 194 herein shall be obligated to remit the taxes due as follows:1. within three months after the beginning of the month next succeeding the month during which a decision was made on distribution of dividends or shares in a liquidation surplus: in the cases where the owner of the income is a resident of a State wherewith the Republic of Bulgaria has an effective convention for the avoidance of double taxation;2. not later than at the end of the month next succeeding the month during which a decision was made on distribution of dividends or shares in a liquidation surplus: in all other cases.(2) Any payers of income withholding the tax at source under Article 195 herein shall be obligated to remit the taxes due as follows:1. within three months after the beginning of the month next succeeding the month of charging of the income: in the cases where the owner of the income is a resident of a State wherewith the Republic of Bulgaria has an effective convention for the avoidance of double taxation;2. not later than at the end of the month next succeeding the month of charging of the income: in all other cases.(3) The tax due referred to in Paragraphs (1) and (2) shall be remitted to the relevant National Revenue Agency territorial directorate exercising competence over the place of registration or over the place where the payer of the income is registrable.(4) Where any payer of income referred to in Paragraph (2) is not a taxable person and in respect of any income referred to in Article 12 (3) and (8) herein, the tax shall be remitted by the recipient of the income within the time limit referred to in Paragraph (2), and the income shall be considered to be charged as from the date of receipt of the said income by the non-resident legal person. The tax due shall be remitted to the relevant National Revenue Agency territorial directorate exercising competence over the place of registration or over the place where the payer of the income is registrable. Where the payer of the income is not registrable, the tax shall be remitted to the Sofia Territorial Directorate of the National Revenue Agency.(5) Any overremitted tax shall be refunded by the National Revenue Agency territorial directorate whereto the tax is subject to remittance.LiabilityArticle 203. Where the tax referred to in Articles 194 and 195 herein has not been withheld and remitted according to the relevant procedure, the said tax shall be due solidarily by the persons which incur tax liability for the relevant income.PART FOURTAX ON EXPENSESChapter Twenty-EightGENERAL DISPOSITIONSScope of TaxationArticle 204. A tax on expenses shall be levied on the following expenses supported by documents:1. any business entertainment expenses;2. any expenses on fringe benefits provided in kind to factory and office workers and to persons hired under a management and control contracts (hired persons); the expenses on fringe benefits provided in kind shall furthermore include:(a) the expenses on contributions (premiums) for voluntary retirement and health insurance and voluntary unemployment and/or vocational-training insurance, and/or life assurance and life assurance linked to an investment fund;(b) the expenses on food vouchers;3. the expenses related to operation of means of transport where used to service management operations.Expenses on Fringe Benefits Not Provided in KindArticle 205. Any expenses on fringe benefits, which are not provided in kind and which constitute income of a natural person, shall be taxed under the terms and according to the procedure established by the Income Taxes on Natural Persons Act.Recognition of Tax on ExpensesArticle 206. (1) The expense and the tax thereon shall be recognized for tax purposes in the year of charging and shall not form a temporary tax difference according to the procedure established by Chapter Eight herein.(2) The tax on expenses shall be final.Taxable PersonsArticle 207. (1) Taxable persons in respect of the tax referred to in Items 1 and 3 of Article 204 herein shall be the persons which are subject to levy of corporation tax.(2) Taxable persons in respect of the tax referred to in Item 2 of Article 204 herein shall be all employers or commissioning entities under management and control contracts.Exemption from Taxation of Fringe Benefit Expenses on Contributionsand Premiums for Supplementary Social Insurance and Life AssuranceArticle 208. No tax shall be levied on any expenses on fringe benefits referred to in Item 2 (a) of Article 204 herein not exceeding the amount of BGN 60 per month per hired person, where the taxable persons do not incur any coercively enforceable public obligations at the time of incurrence of the expenses.Exemption from Taxation of Fringe Benefit Expenses on Food VouchersArticle 209. (1) No tax shall be levied on any expenses on fringe benefits referred to in Item 2 (b) of Article 204 herein not exceeding the amount of BGN 40 per month, provided in the form of food vouchers to each hired person, where the following conditions are simultaneously fulfilled:1. (amended, SG No. 110/2007) the agreed basic monthly remuneration of the person in the month of provision of the vouchers is not lesser than the average monthly agreed basic remuneration of the said person for the last preceding three months;2. the taxable person does not incur any coercively enforceable public obligations at the time of provision of the vouchers;3. the vouchers are provided to the taxable person by a person which has obtained authorization to carry on operator business from the Minister of Finance on the basis of a competitive procedure;4. the amounts on the vouchers as provided, paid by the taxable person to the operator, may be used solely for settlement through bank transfer with the persons which have concluded a contract for provision of services with the operator, or for refunding to the taxable person, up to the amount of the nominal value of the vouchers, in the cases where the said vouchers have not been used;5. the persons wherewith the operator has concluded a contract for provision of services to the hired persons are registered under the Value Added Tax Act .(2) The right to carry on operator business shall be limited to a person which has obtained authorization from the Minister of Finance and which:1. has a paid up share (registered) capital of at least BGN 2 million at the time of submission of the documents for the grant of authorization;2. is registered under the Value Added Tax Act;3. is not subject to bankruptcy proceedings or is not placed in liquidation;4. does not incur any coercively enforceable public obligations at the time of submission of the documents for authorization;5. is represented by any persons who:(a) have not been convicted of a premeditated offence at public law, unless rehabilitated;(b) have not been members of a supervisory body or a management body of any corporation dissolved through bankruptcy during the two years last preceding the date of the judgment on institution of bankruptcy proceedings, if any creditors have been left unsatisfied.(3) The authorization shall be granted by the Minister of Finance on the basis of a competitive procedure and shall be withdrawn when the person ceases to satisfy the requirements covered under Paragraph (2).(4) The grant, refusal of authorization or withdrawal of an authorization granted shall be effected by a written order of the Minister of Finance.(5) Any refusal to grant an authorization and any withdrawal of an authorization shall be appealable according to the procedure established by the Administrative Procedure Code.(6) The procedure for the conduct of a competitive procedure, for the grant and withdrawal of an authorization, the terms and a procedure for the printing of vouchers, the number of vouchers issued, the terms for organization and control of the conduct of operator business shall be established by an ordinance of the Minister of Labour and Social Policy and the Minister of Finance.Exemption from Taxation of Fringe Benefit Expenses on Transportationof Factory and Office Workers and Persons Hired under Managementand Control ContractArticle 210. (1) No tax shall be levied under Item 2 of Article 204 herein on any expenses on fringe benefits incurred on transportation of factory and office workers and of persons hired under a management and control contract from the place of residence to the place of work and back.(2) Paragraph (1) shall not apply where any such transportation is carried out by passenger car or by extra bus services.(3) Paragraph (1) shall furthermore apply where the transportation of factory and office workers is carried out by passenger car to inaccessible and remote areas and the taxable person cannot ensure the implementation of the activity thereof without incurrence of the expense. For more information visit www.solicitorbulgaria.com id: 333 Mon, 04 Aug 2008 06:23:41 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-2 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-2 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/CORPORATE_INCOME_TAX_ACT1.JPG EUR http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-2 legal 80 negotiable Bulgarian Customs Act, part 1 info@solicitorbulgaria.com (SolicitorBulgaria) PART ONEBASIC PROVISIONSChapter OneGENERAL PROVISIONSArticle 1. This Act shall regulate the customs administration structure and organization and the activities performed by its authorities.Article 2. (1) (Amended and supplemented, SG No. 63/2000) Customs authorities' activities shall consist of performance of customs supervision and control on the country's customs territory upon the imports, exports and transit of goods to, from and through the Republic of Bulgaria, the collection of customs duties, the imposition of administrative penal provisions and investigations of crimes in the cases, under the terms and procedures provided for in the Criminal Procedure Code. (2) Customs supervision shall be a set of actions undertaken with the purpose of ensuring compliance with the customs legislation and with other provisions applicable to goods subject to customs supervision.(3) Customs control shall be the performance by the customs authorities of specific acts such as examinations of goods,… For more information visit http://www.solicitorbulgaria.com id: 336 PART ONEBASIC PROVISIONSChapter OneGENERAL PROVISIONSArticle 1. This Act shall regulate the customs administration structure and organization and the activities performed by its authorities.Article 2. (1) (Amended and supplemented, SG No. 63/2000) Customs authorities' activities shall consist of performance of customs supervision and control on the country's customs territory upon the imports, exports and transit of goods to, from and through the Republic of Bulgaria, the collection of customs duties, the imposition of administrative penal provisions and investigations of crimes in the cases, under the terms and procedures provided for in the Criminal Procedure Code. (2) Customs supervision shall be a set of actions undertaken with the purpose of ensuring compliance with the customs legislation and with other provisions applicable to goods subject to customs supervision.(3) Customs control shall be the performance by the customs authorities of specific acts such as examinations of goods, transport, trade, accounting and other documents of natural and legal persons, of vehicles, luggage and other goods carried through the state border, other such actions with a view of ensuring compliance with customs legislation and observance of other provisions applicable to goods subject to customs supervision, as well as collection of customs duties.Article 3. Persons and vehicles, as well as goods carried by, or on, them shall cross the state border through the border control crossing points and shall be subject to customs supervision and control, which shall be carried out in places specially designated for this purpose. The procedure under which customs supervision and control shall be carried out shall be established in the Regulations on the Application of this Act, referred to hereinafter as "the Regulations."Article 4. (1) (Amended and supplemented SG No. 37/2003) Any person shall be obliged to inform the customs authorities forthwith about any goods left with, found by or seized by them, including vehicles, known or supposed to be imported without performing the respective customs formalities. These goods shall be presented to the customs authorities.(2) (Amended SG No. 37/2003) If the owner of goods left, found or seized, including vehicles, is a foreign person, an unknown person or a native person whose address is unknown and claims them within six months from the day of presenting them before the customs authorities, the person shall perform the respective formalities for obtaining a customs clearance of the goods after paying all the expenses incurred by for the customs office in relation to them.(3) Goods left, found or seized, including vehicles, shall be deemed abandoned in favour of the state when:1. (amended SG No. 37/2003) the owner is a foreign person, an unknown person or a native person whose address is unknown and six months have elapsed from the day of their presentation before the customs authorities;2. (amended SG No. 37/2003) the owner is a native person with a known address in the country and three months have elapsed since the day of delivering the notice of the customs office on moving the goods. The notice shall be sent within one week from the day of presenting the goods before the customs authority.Article 5. (1) (Supplemented SG No. 45/2005) Any person, including state authorities within their competence, shall support the customs authorities in the performance of their activities. They shall be obliged within 14 days after receiving a request from the customs authorities to provide information on the facts and circumstances specified therein.(2) No one shall be permitted to dispose with goods under customs supervision without the knowledge and the permission of the customs authorities.(3) (New SG No. 37/2003) Actions performed in violation of Paragraph 2 shall be null and void in relation to the customs authorities.Article 6. Any person related to the operations on importing, exporting or transiting goods, shall be obliged, for the purpose of customs supervision and control, to present to the customs authorities, on their demand and in a term specified by them, all information and documents on the specific operations regardless of their carrier.Chapter TwoCUSTOMS ADMINISTRATIONSection IStructure and OrganizationArticle 7. (Amended, SG No. 83/1999 and SG No. 63/2000) (1) The Customs administration shall be a centralized administrative structure, organized within the Customs Agency under the Minister of Finance, which shall be a legal person financed by the state budget, with a seat in Sofia.(2) The Customs Agency shall be structured into a Central Customs Directorate and regional customs directorates. The general and the specialized administrations within the Central Customs Directorate shall be organized in departments.(3) The regional customs directorate shall be structured as a regional customs department and customs offices. The general and the specialized administrations within the regional customs department shall be organized in departments.(4) The customs office shall be structured as a territorial customs office and customs bureaus and/or customs posts. The general and the specialized administrations within the customs office shall be organized in departments.(5) The Central Customs Directorate shall organize, manage, control and report on the activities of the customs administration, and shall perform customs activities.(6) The regional customs department shall organize, manage, control and report on the activities of the customs offices included in the structure of the regional customs directorate, shall perform customs activities, and shall provide information services to the customs offices and to the Central Customs Directorate.(7) The territorial customs office shall organize, manage, control and report on the activities of the customs bureaus and/or customs posts and jointly with them shall be the main executor of customs supervision and control.(8) (Supplemented, SG No. 91/2005) The general management and control over the activities of the customs administration shall be performed by the Minister of Finance or by one of the Deputy-Ministers designated by him. Officials from the inspectorate to the Minister of Finance shall be entitled to access to any data and documents in the customs administration in connection with the inspections conducted by them.(9) The Customs Agency may publish specialized printed editions.Article 8. (Amended, SG No. 63/2000) Regional customs directorates, customs offices, customs bureaus and customs posts shall be created, transformed and closed down by the Minister of Finance on a proposal of the Director of the Customs Agency. The Director of the Customs Agency shall define their structure and staff number within the framework of the total staff number of the Customs Agency.Article 9. (Amended, SG No. 63/2000) (1) The Customs Agency shall be managed and represented by a Director, who shall be appointed and discharged by the Minister of Finance, in coordination with the Prime Minister.(2) In performing his functions the Director of the Customs Agency shall be assisted by Deputy-Directors. The number of Deputy Directors shall be specified in the Agency's Rules of Organization.(3) The Deputy-Directors of the Customs Agency shall be appointed and discharged by the Minister of Finance upon a proposal submitted by the Agency's Director.(4) The structure of the Customs Agency shall include an inspectorate subordinated directly to the Agency's Director, which will exercise control over the activities of the customs administration.Article 10. (1) Any legally able Bulgarian citizen, who has never been convicted for a premeditated crime of a general nature, and has never been legally debarred from the right to occupy such a position, and meets the requirements for work in the customs administration, may be appointed as customs officer.(2) Customs officers shall be prohibited:1. to be sole traders, unlimited partners or to participate personally or through proxies in the management of commercial companies, cooperatives or other economic organizations;2. to sign additional employment contracts, save as associates in research institutes and lecturers in educational establishments.3. (new, SG No. 37/2003, amended SG No. 95/2003) to be in a hierarchic relationship of management and control with a spouse, a direct relative without limitation, on a collateral line up to the fourth degree inclusive and by marriage up to the fourth degree inclusive.(3) (New SG No. 63/2000) Customs officers occupying their position under a regular labour contract need to comply also with the requirements under Article 7 of the Civil Servants Act. (4) (New SG No. 37/2003) On appointment customs officers shall sign a sworn statement on the circumstances under Paragraphs 1 and 2.(5) (New SG No. 37/2003, supplemented SG No. 38/2004) On appointment and dismissal and every year by 31 May at the latest customs officers shall be obliged to declare before the Director of the Customs Agency their property state as well as the property state of their spouses and minor children on a statement form approved by the Minister of Finance.(6) (New, SG 37/2003, amended, SG No. 105/2005) On a written request of the Director of the Customs Agency the authorities of the National Revenue Agency shall provide information on the income and property of customs officers.(7) (New SG No. 37/2003) The provisions of the Personal Data Protection Act shall apply in relation to the protection and the access to the data under Paragraphs 5 and 6.(8) (New SG No. 37/2003) Incompatibility under Paragraphs 1 and 2 as well as the failure to submit the statement under Paragraph 5 shall be grounds for unilateral termination of labour or official relations with the customs officer without prior notice.Article 11. (Amended, SG No. 63/2000) (1) The Council of Ministers, upon proposal submitted by the Minister of Finance, shall adopt Rules of Organization of the Customs Agency and shall determine the staff number in the Agency and in the Central Customs Directorate.(2) The Rules of Organization of the Customs Agency may stipulate additional requirements for occupying positions in the customs administration.(3) The Minister of Finance, upon proposal submitted by the Director of the Customs Agency, shall approve Rules of Organization and Operation of the Regional Customs Directorates.Article 12. The customs authorities shall collect fees for additional services rendered and in cases as defined in the Regulations. The fees shall not account as customs duties. The amount of such fees shall be specified by the Council of Ministers.Article 13. (Amended SG No. 63/2000) The Customs Agency shall collect revenues from contracts concluded with natural or legal persons for activities approved by the Minister of Finance within the zones of the border checkpoints and other places where these activities require additional customs control.Article 14. (Amended, SG No. 83/1999) (1) (Amended, SG No. 63/2000) The Customs Agency shall be the administrator of:1. the revenues under Article 12;2. the revenues under Article 13;3. ninety per cent of the revenues under Article 240, Item 2;4. (amended, SG No. 37/2003) the revenues from the use of real estate that is owned by the state and from provision of information;5. (supplemented, SG No. 45/2005) twenty per cent of the fines and pecuniary sanctions collected for customs and currency violations; twenty per cent of the fines collected for customs and currency violations;6. (amended, SG No. 63/2000, effective 1.01.2000) revenues from printed editions under Article 7, Item 9;7. incomes from the holiday facilities;8. (new, SG No. 63/2000, effective 1.01.2000, supplemented SG No. 37/2003) the revenues under Article 17, Item 3 of the Foreign Exchange Act and under Article 251, Paragraph 2 of the Criminal Code; 9. (new, SG No. 63/2000, effective 1.01.2000, amended, SG No. 59/2007) the payments under Article 78, Paragraphs 6 and 8 of the Code of Civil Procedure. (2) (Amended, SG No. 63/2000, effective 1.01.2001, supplemented, SG No. 109/2007) The Minister of Finance, upon proposal of the Director of the Customs Agency, shall determine the employees who are to receive additional remuneration for their participation in prevention of customs and foreign exchange violations and offences, for their participation in detection of excise legislation and for material incentives.(3) (New, SG No. 63/2000, effective 1.01.2001) The funds under Paragraph 2 shall amount to twenty five per cent of the annual amount of the funds for salaries in the budget of the Customs Agency for the respective year and shall be incorporated in the State Budget Act for the same year.(4) (New, SG No. 63/2000, effective 1.01.2001) The procedure for determining the individual amount of the additional remuneration under Paragraph 2 shall be established by an ordinance issued by the Minister of Finance.Section IIFunctions and ResponsibilitiesArticle 15. (1) The customs administration shall:1. participate in the development the customs policy of the Republic of Bulgaria and shall implement it;2. participate in the development and implementation of international agreements related to customs activity;3. maintain international customs relations;4. collect, process, analyse, file and provide information concerning customs activity and develop customs statistics. The terms and procedure for the performance of these activities shall be set forth in an ordinance issued by the Minister of Finance;5. ensure training and retraining of customs officers;6. (new, SG No. 37/2003) insure customs officers against accidents and with life insurance at the expense of its own budget.(2) The customs authorities shall:1. perform customs supervision and control on goods, vehicles and persons in the zones of the border checkpoints and throughout the state's customs territory;2. calculate, collect or require security for duties levied on imports, exports or transit of goods;3. enforce, within their competence, the tariff and trade policy measures of the Republic of Bulgaria;4. protect, within their competence, the economic interests of the country;5. (amended and supplemented SG No. 63/2000, SG No. 37/2003) conduct customs intelligence and investigation for combating customs and currency violations;6. organize and perform prevention and detection of the illegal traffic of drugs and precursors;7. exercise foreign exchange control within the limits of their competence assigned by law;8. issue decisions on the application of customs rules;9. (new, SG No. 63/2000, repealed, SG No. 86/2005) 10. (new, SG No. 63/2000) perform activities related to establishing administrative violations and imposition of administrative sanctions;11. (new, SG No. 63/2000) participate in operative and investigative activities jointly with bodies of the Ministry of the Interior, under the terms and procedures of the Ministry of the Interior Act; 12. (new, SG No. 37/2003) apply border control measures for protecting intellectual property rights.(3) (New, SG No. 63/2000) The terms and procedures of interaction between the customs bodies and the bodies of the Ministry of the Interior for prevention and detection of customs and foreign exchange violations shall be stipulated by a joint instruction of the Minister of Finance and the Minister of the Interior.(4) (Previous (3), SG No. 63/2000) The customs authorities shall perform other activities as assigned by law.Section IIIPowers of the Customs AuthoritiesArticle 16. (1) While performing their professional duties customs officers shall be entitled:1. to conduct inspections related to customs supervision and control of goods, vehicles and persons in the zones of border checkpoints and throughout the customs territory of the country;2. to undertake the necessary measures, allowed by law, for performing customs control;3. to require the presentation or delivery of goods, documents, data or other information carriers related to customs supervision and control;4. to require presentation of personal identification documents;5. to require written or oral explanations;6. to perform follow-up customs control of goods and documents related to importation, exportation and transit;7. to collect sums: for customs duties for imported and exported goods; for unfulfilled liabilities and guarantees; for payment of the equivalent amount for goods confiscated in favour of the state when they are missing or expropriated and for any state receivables, collectable by the customs authorities;8. to levy, according to the procedure established by the law, distrait and injunctions for securing due customs duties and other state receivables collectable by them;9. to carry out individual searches of persons crossing the state border;10. (amended, SG No. 63/2000, amended and supplemented, SG No. 45/2005) to conduct searches and seize goods that have been or should have been subject to customs supervision and control and related documentation in offices, official and other premises, as well as personal searches of the persons located therein, in compliance with the procedures of the Criminal Procedure Code; 11. to execute controlled deliveries jointly with the competent authorities of the Ministry of the Interior and with the permission of the respective prosecution office.(2) (Repealed, SG No. 63/2000).(3) The customs officers shall be entitled to carry firearms and use them in cases of inevitable self-defence as a last resort;(4) (New SG No. 76/2002) When exercising the powers under Paragraph 1, Item 1 specialised control bodies of the Customs Agency shall be entitled to stop vehicles inside the country under terms and procedures pursuant to Article 15, Paragraph 3;(5) (New SG No. 76/2002, amended, SG No. 105/2005) On a written request of the Director of the Customs Agency, the directors of regional customs directorates and the heads of customs offices the authorities of the National Revenue Agency shall provide information on follow-up transactions related to the quantity, type, value and origin of goods subject to import-export operations, on sums subject to payment or reimbursement under the Value Added Tax Act and the Excise Tax Act, as well as on violations established by the internal revenue bodies, perpetrated by persons engaging in import and export activities;(6) (New SG No. 37/2000, amended, SG No. 105/2005) The procedure and modalities for electronic exchange of information between the customs administration and the National Revenue Agency shall be specified in a joint instruction of the director of the Customs Agency and the executive director of the National Revenue Agency.(7) (New, SG No. 45/2005) When conducting inspections within the framework of follow-up control or in the course of a customs investigation for establishing customs liabilities or violations, when there is information on withholding facts and circumstances that are substantial for the inspection or the investigation as well as in case of hindering their conduct, the customs authorities may carry out searches and seizures under the procedure of the Criminal Procedure Code. In these cases the customs authorities conducting the inspection or the investigation shall have the powers of the authorities of pre-trial proceedings.(8) (New, SG No. 45/2005) The provisions of the Criminal Procedure Code shall apply also to the powers and procedural actions of customs authorities under Paragraph 1, Item 10 when conducting inspections under Paragraph 7 as well as concerning the rights and obligations of the inspected persons in relation to the grounds of the search and the seizure, the authorities that are carrying them out and the attending persons, as well as in relation to the protection of the inspected persons.Article 17. (1) While performing their professional duties the customs officers shall be obliged:1. to observe the organization of work at the customs office;2. to protect the property, rights and freedoms of persons;3. to present a customs sign and an official identification card;4. (supplemented, SG No. 63/2000) to wear uniform when this is required for the respective positions under the Rules of Organization of the Customs Agency;5. (new, SG No. 37/2003) to observe the norms of conduct of the customs officer approved with an order of the Minister of Finance;6. (amended and supplemented, SG 63/2000, renumbered from Item 5, SG No. 37/2003, supplemented, SG No. 91/2005) not to divulge circumstances and facts they have become aware of during or in relation to the performance of their official duties specified herein as official secret except on the request of a state body when provided by law at the request of the officials from the inspectorate to the Minister of Finance or of another customs body when performing its powers herein. The terms and procedures for providing information about circumstances and facts constituting official secret to another customs body shall be defined by the Director of the Customs Agency.(2) Violations of the duties under Paragraph 1 shall be subject to disciplinary sanctions.Article 17a. (New, SG No. 45/2005) (1) The customs authorities shall collect and process personal data for the purposes of customs supervision and control.(2) The administrator of the personal data shall be the Director of the Customs Agency who shall assign personal information processing to persons authorised by him/her under the terms and procedures of the Personal Data Protection Act. (3) Personal data collected and processed by the customs authorities may be provided to authorities of a foreign state in compliance with international agreements to which Bulgaria is a party under the terms and procedures of the Personal Data Protection Act. Chapter ThreeRIGHTS AND LIABILITIES OF PERSONSSection IRepresentationArticle 18. (1) Any person may be represented before the customs authorities for performing the actions and formalities laid down herein and in the statutory instruments for the implementation of this act, including by a customs agent.(2) The Regulations shall establish the terms and procedures applicable to performing representation by a customs agent.(3) The representative must be a native person, save in cases expressly specified herein.(4) The customs authorities shall require any person stating that he/she is acting as an agent to produce evidence in writing thereof.Section IIDecisions of the Customs AuthoritiesArticle 19. (1) When a person requests that the customs authorities take a decision in relation to the application of customs rules that person shall supply all the information and documents required by those authorities.(2) The decision under Paragraph 1 shall be taken and notified to the applicant within a term defined in the Regulations. Where a request for a decision is made in writing, the decision shall be made within the period laid down in the Regulations, starting from the date on which the said request is received by the customs authorities. Such a decision shall be notified to the applicant in writing.(3) When the customs authorities are unable to take a decision within the specified term due to the need of collecting additional information they shall be obliged to inform the applicant before its expiry stating the grounds and the period of time they shall need in order to give the requested ruling.(4) Decisions of the customs authorities, which either reject requests or are detrimental to the persons, shall be substantiated.Article 20. (1) A decision favourable to the respective person which is based on incorrect or incomplete information shall be annulled when:1. the applicant knew or should reasonably have known that the information was incorrect or incomplete, and2. such decision could not have been taken on the basis of correct or complete information.(2) The person shall be notified of the annulment of the decision.(3) The annulment shall take effect from the date on which the decision was taken.Article 21. (1) In cases different than those referred to in Article 20, a decision favourable to the interested person shall be revoked or amended when one or more of its conditions were not or are no longer fulfilled.(2) A decision favourable to the interested person may be revoked when this person fails to fulfil an obligation imposed on him/her under that decision.(3) The person to whom the decision is addressed shall be notified of its revocation or amendment.(4) (Amended SG No. 63/2000) The revocation or amendment of the decision shall take effect from the date of notification referred to in Paragraph 3. In exceptional cases when the legitimate interests of the interested person so require, the Central Customs Directorate may defer the date when revocation or amendment takes effect.Section IIIInformationArticle 22. (1) The customs authorities shall present to any interested person information concerning the application of customs legislation. The customs authority may refuse to respond when the request does not relate to importation or exportation operations actually envisaged.(2) The information under Paragraph 1 shall be supplied free of charge. The costs incurred shall be paid when they are connected with analyses, with expert review of the goods, with their return to the applicant, etc.Article 23. (1) (Supplemented, SG No. 37/2003) The customs authorities shall issue binding tariff information or binding information concerning the origin of goods with a decision upon written request and in accordance with the procedures set forth in Article 19.(2) The information under Paragraph 1 shall be binding on the customs authorities and on its holder only in respect of the tariff classification of goods or of defining the origin of a specific product when the customs formalities on the goods are completed after the date on which the information was supplied.(3) In the course of customs clearance of the goods the holder of the received information shall certify before the customs authorities the exact compliance:1. between goods reported and goods described in the information for tariff purposes;2. between goods reported and the circumstances defining the way the goods acquired their origin and the circumstances described in the information for the purposes of the origin.(4) The binding information shall be valid for a period of three years from the date of issue. The binding information shall be annulled when it is based on inaccurate or incomplete information from the applicant regardless of the terms under Article 20, Items 1 and 2.(5) Tariff information shall cease to be valid:1. on the adoption of a statutory instrument when it no longer conforms to its provisions;2. when it is incompatible with the interpretation of the nomenclatures referred to in Article 26. Incompatibility with the interpretation may be:(a) (amended SG No. 37/2003) on a national level, due to changes of the national interpretation notes to the customs tariff nomenclature or by decision of the court;(b) on an international level due to issuing of a classification opinion or an amendment to the explanatory notes to the nomenclature of the Harmonized Commodity Description and Coding System adopted by the World Customs Organisation;3. on its revocation or amendment under the provisions of Article 21 when the holder of the information is notified of its revocation or amendment.(6) The information about origin shall cease to be valid:1. on the adoption of a new statutory instrument or the Republic of Bulgaria signs an international agreement when it no longer conforms to their provisions;2. when it is no longer compatible:(a) on a national level - with the explanatory notes and opinions adopted for the purposes of interpreting the rules or upon a decision of the court;(b) on an international level - with the International Agreement on Rules of Origin established by the World Trade Organization or with the explanatory notes or opinions on origin adopted for interpreting the Agreement;3. on revocation or amendment pursuant to Article 21 provided the holder is notified of its revocation or amendment.(7) (Amended SG No. 63/2000) The holder of binding information which ceases to be valid pursuant to Paragraph 5, Items 2 or 3 and Paragraph 6, Items 2 and 3 may still use that information for a period not longer than six months from the date of respective acts come into force under terms and procedures specified in the Regulations.(8) When the statutory instruments or the agreement pursuant to Paragraph 5, Item 1 and Paragraph 6, Item 1 provide for a different period than the one under Paragraph 7, the period specified by them shall apply.(9) The classification or definition of the goods' origin in the binding tariff information shall be applied only for:1. determining import or export customs duties;2. (new SG No. 37/2003) calculating export subsidies and any other financial grants in cases of exportation or importation of goods as part of the agricultural policy of the Republic of Bulgaria;3. (previous (2) SG No. 37/2003) using export licences and import and export certificates which are presented for the acceptance of the customs statement of the goods provided these certificates are issued on the basis of this binding information.PART TWOELEMENTS ON THE BASIS OF WHICH IMPORT AND EXPORT DUTIES AND OTHERMEASURES PROVIDED IN RESPECT OF TRADE WITH GOODS ARE APPLIED(Title - SG No. 37/2003)Chapter FourCUSTOMS TARIFF. TARIFF CLASSIFICATION(Title - SG No. 37/2003)Article 24. (Amended SG No. 63/2000, SG No. 37/2003) (1) Goods carried across the state border of the Republic of Bulgaria shall be charged with import or export customs duties unless otherwise provided herein, in another act or in an international agreement to which the Republic of Bulgaria is a party.(2) Import or export customs duties due on the occurrence of the customs debt shall be based on the Customs Tariff of the Republic of Bulgaria.Article 25. (Amended SG No. 37/2003) Other measures in relation to specific fields related to trade with goods provided for in statutory instruments and beyond the ones specified in Article 24 shall be introduced according to the tariff classification of those goods.Article 26. (Amended SG No. 37/2003) (1) The Customs Tariff shall include:1. the Combined Nomenclature of the Republic of Bulgaria2. any other nomenclature which is based in whole or in part on the Combined nomenclature of the Republic of Bulgaria or adds subsections to it and which is adopted with a statutory instrument regulating specific fields in relation to applying tariff measures related to trade with goods;3. the rates and other elements charging duties applicable to goods included in the Combined Nomenclature in relation to:a. customs duties, andb. charging the import of goods in compliance with agricultural policy or in compliance with specific provisions applicable to goods obtained from the processing of agricultural products;4. preferential tariff measures including in agreements to which the Republic of Bulgaria is a party providing for granting preferential tariff treatment;5. preferential tariff measures adopted unilaterally by the Republic of Bulgaria in favour of countries, groups of countries or territories;6. autonomous measures introduced by the Council of Ministers which temporarily reduce or abolish applicable import customs duties in relation to certain goods (autonomous suspension measures); the terms and procedures for introducing autonomous suspension measures shall be specified with an ordinance of the Council of Ministers;7. other tariff measures provided for in other statutory instruments.(2) In compliance with the rules for charging with a single customs rate the measures under Paragraph 1, Items 4, 5 and 6 shall apply instead of the ones specified in Item 3 on the reporting person's request when the goods conform to the conditions laid down for these measures. The request may be granted also at a later date in case the respective conditions are met.(3) When the application of the measures under Paragraph 1, Items 4, 5 and 6 is restricted to a certain volume or cost of imports their application shall cease:1. in the case of tariff quotas, as soon as the stipulated limit on the volume or cost of imports is reached;2. in the case of tariff ceilings, as from a time fixed by a statutory instrument.Article 26a. (New SG No. 37/2003) (1) Before the end of each calendar year the Council of Ministers shall adopt the Combined Nomenclature of the Republic of Bulgaria and shall determine customs duty rates in compliance with the linked duty rates of the Republic of Bulgaria under the List of Obligations and Concessions attached to the General Agreement on Tariffs and Trade of 1994 (conventional customs duty rates) which shall apply as from the first day of the following year.(2) The Combined Nomenclature, the conventional customs duty rates and the autonomous customs duty rates shall be published in the State Gazette.Article 27. (Amended SG No. 37/2003) (1) The tariff classification of goods shall be the determination pursuant to the rules established with a statutory instrument of.1. the sub-positions of the nomenclature under Article 26, Paragraph 1, Item 1 or of any other nomenclature under Article 26, Paragraph 1, Item 2. or2. the sub-positions of any other nomenclature which is wholly or partially based on the Combined Nomenclature of the Republic of Bulgaria or adds subsections thereto and which is adopted with a statutory instrument regulating specific areas in relation to the application of measures different from the tariff measures related to trade with goods.(2) Additional tariff classification rules may be specified with an ordinance of the Minister of Finance in compliance with:1. the explanatory notes to the Harmonised Commodity Description and Coding System;2. the explanatory notes to the Combined Nomenclature applied in the European Union member-states;3. the opinions on commodity classification adopted by the Harmonised System Committee of the World Customs Organisation;4. the decisions on commodity classification applied in the European Union member-states.Article 28. (1) (Amended SG No. 63/2000, SG No. 37/2003) The terms under which certain commodities may be entitled to a more favourable tariff treatment due to their nature or specific designation shall be established in the Regulations. When permission is required the provisions of Articles 92 and 93 shall apply.(2) (Amended SG No. 37/2003) In the meaning of Paragraph 1 "more favourable tariff treatment" shall be understood to mean any reduction or abolition of (suspension from) import customs duties, even within the frameworks of the tariff quota.Chapter FiveORIGIN OF GOODSSection INon-Preferential OriginArticle 29. The non-preferential origin of goods specified in Articles 30, 31 and 32 shall serve for the purposes of:1. (amended SG No. 37/2003) applying the Customs Tariff, with the exception of the preferential tariff measures referred to in Article 26, Paragraph 1, Items 4 and 5;2. applying measures other than the tariff measures established by an act of the Council of Ministers;3. the preparation and issue of certificates of origin.Article 30. (1) Goods originating in a country shall be the goods wholly obtained or produced in that country.(2) Goods wholly obtained or produced in a given country shall be the following:1. minerals extracted within that country;2. vegetable products harvested therein;3. live animals raised therein;4. products derived from live animals raised therein;5. products of hunting or fishing carried out therein;6. products of sea-fishing and other products extracted from the sea, outside the inland sea waters and the territorial sea waters of that country by vessels registered in the country and flying the flag of that country;7. goods obtained or produced on board factory-ships from the products referred to in Item 6 originating in that country provided such factory- ships are registered in that country and fly its flag;8. products taken from the seabed or its subsoil outside the inland sea of the territorial sea provided that country has exclusive rights to exploit that seabed or subsoil;9. waste and scrap products, derived from manufacturing operations performed in the country and used articles provided they were collected therein and are fit only for the recovery of raw materials;10. goods which are produced in the country exclusively from goods referred to in Items 1 to 9, or from their derivatives at any stage of production.(3) Whereas Paragraph 2 shall apply, the customs territory of the country shall include its inland sea waters and the territorial sea.Article 31. (1) Goods whose production involves more than one country shall be deemed to originate in the country where they underwent their last, substantial, economically justified processing or treatment in an enterprise equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture.(2) Any processing or treatment in respect of which it is established or there is sufficient data that that its sole objective was to circumvent the provisions applicable in the Republic of Bulgaria towards goods from specific countries, shall under no circumstances be deemed to confer on the goods thus produced the origin of the country where it is carried out.Article 32. (1) The documents certifying the origin of goods shall be presented when required by a customs or other statutory instrument.(2) Notwithstanding the presentation of a document ascertaining the origin of goods the customs authorities shall be entitled in the event of reasonable doubt to require other evidence confirming that the reported origin complies with the rules for non preferential origin established in the Republic of Bulgaria.Section IIPreferential OriginArticle 33. (Amended SG No. 37/2003) The conditions for acquiring preferential origin of goods with the purpose of applying the measures under Article 26, Paragraph 1, Items 4 and 5 shall be regulated by:1. the international agreements of the Republic of Bulgaria establishing preferential tariff measures;2. the statutory instruments on preferential tariff measures adopted unilaterally by the Republic of Bulgaria.Chapter SixCUSTOMS VALUEArticle 34. The customs value shall be the value of goods in Bulgarian national currency determined for customs purposes. The provisions of this chapter shall regulate the determination of the customs value of goods for the purposes of applying the Customs Tariff of the Republic of Bulgaria, as well as of non-tariff measures established by a statutory instrument.Article 35. (1) The customs value of imported goods determined under this article shall be the contract value which shall be the price of goods actually paid or payable when they are sold for export to the Republic of Bulgaria, adjusted in accordance with Article 38, provided:1. there is no restriction as to the disposal or use of the goods by the buyer, other than restrictions which:(a) are established by statutory instruments of the Republic of Bulgaria;(b) specify the geographical area in which the goods may be resold, or(c) do not substantially affect the value of the goods;2. the sale or price is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued;3. no part of the proceeds of any subsequent resale, granted right to use or dispose with the goods by the buyer shall accrue directly or indirectly back to the seller, unless an adjustment can be made in accordance with Article 38; and4. the buyer and seller are not related persons, or, when the buyer and seller are related persons provided the contract value is acceptable for customs purposes under Paragraph 2.(2) Circumstances that shall be taken into consideration in the case of related persons:1. in determining whether the transaction value is acceptable for the purposes of Paragraph 1 the fact that the buyer and the seller are related persons shall not in itself be sufficient grounds for regarding the transaction value as unacceptable. Where necessary the circumstances of the sale shall be examined and the transaction value shall be accepted provided the relationship did not influence the price. If in the light of information provided by the buyer or another source the customs authorities have grounds to consider that the relationship has influenced the price, they shall communicate their grounds to the reporting person and he shall be given a reasonable opportunity to respond. If the reporting person so requests the communication of the grounds shall be in writing;2. in a sale between related persons the contract value shall be accepted and the goods valued in accordance with Paragraph 1 when the reporting person proves that such value closely approximates one of the following values determined at or about the same time:(a) the contract value in sales of identical or similar goods sold for export to the Republic of Bulgaria, between buyers and sellers who are not related persons;;(b) the customs value of identical or similar goods, as determined under Article 36, Paragraph 2, Item 3;(c) the customs value of identical or similar goods, as determined under Article 36, Paragraph 2, Item 3.(3) In applying Paragraph 2, Item 2 due account shall be taken of differences in commercial levels, the levels listed in Article 38 and costs incurred by the seller in sales in which he and the buyer are not related persons and when such costs are not incurred by the seller in sales in which he and the buyer are related persons. The methods set forth in Paragraph 2, Item 2 shall be applied at the initiative of the reporting person and only for comparison purposes, and not as a basis for determining the customs value.(4) The price actually paid or payable shall be the total payment made or to be made by the buyer to or for the benefit of the seller and shall include all payments made or to be made as a condition of the sale by the buyer to the seller or by the buyer to a third party to satisfy an obligation of the seller. The payment need not necessarily take the form of a transfer of money but may be made by way of a letter of credit or negotiable instrument and may be made directly or indirectly.(5) Activities, including marketing activities, undertaken by the buyer on his own account, other than those for which an adjustment is provided in Article 38, shall not be considered to be an indirect payment to the seller even when they might be regarded as of benefit to the seller or have been undertaken by agreement with the seller, and their cost shall not be added to the price actually paid or payable in determining the customs value of imported goods. "Marketing activities" in the meaning herein shall be any activities related to the advertising or the promotion of the sale of the valued goods and all warranty activities in relation to the goods.Article 36. (1) When the customs value cannot be determined under Article 35, it is to be determined by applying sequentially the provisions of Paragraph 2, Items 1 to 4 until the first provision in the sequence allows its application An exception from the specified procedure shall be admissible for the application of Items 3 and 4 if the reporting person requests the sequence of these Items to be reversed. It is only when such value cannot be determined under a particular subparagraph in the sequence specified that the provisions of the next subparagraph can be applied in a sequence established by virtue of this paragraph.(2) The customs value as determined under this Article shall be:1. the contract value of identical goods sold for export to the Republic of Bulgaria and exported at or about the same time as the goods to be valued;2. the contract value of similar goods sold for export to the Republic of Bulgaria and exported at or about the same time as the goods being valued;3. the value based on the unit price at which the imported goods for identical or similar imported goods are sold within the Republic of Bulgaria in the greatest aggregate quantity to persons not related to the sellers;4. the computed value, consisting of the sum of:(a) the cost of materials and manufacture or other operations related to the processing of the imported goods,(b) a sum of the profit and general expenses equal to that usually calculated for sales of goods of the same class or type as the goods being valued which are manufactured by producers in the country of export for export to the Republic of Bulgaria,(c) the cost referred to in Article 38, Paragraph 1, Item 5.(3) Any additional conditions and rules for the application of Paragraph 2 shall be determined by the Regulations.Article 37. (1) When the customs value of imported goods cannot be determined under Articles 35 or 36, it shall be determined through methods compatible with the principles and the general provisions of the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade, and the provisions of this chapter.(2) No customs value shall be determined under Paragraph 1 on the basis of:1. the selling price in the Republic of Bulgaria of goods produced in the Republic of Bulgaria;2. a system which provides for the acceptance for customs purposes of the higher of two alternative values;3. the price of goods on the domestic market of the country of exportation;4. production costs, other than the computed values which have been determined for identical or similar goods in accordance with Article 36, Paragraph 2, Item 4;5. prices for goods sold for export which was not intended for the Republic of Bulgaria;6. minimum customs values;7. arbitrary or fictitious values.Article 38. (1) In determining the customs value under Article 35 to the price actually paid or payable for the imported goods the following shall be added:1. (amended, SG No. 63/2000) the following costs, to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the goods:(a) commissions and brokerage, except purchase commissions;(b) the cost for containers which, for customs purposes, are treated as being one with the goods in question;(c) packing cost, including labour and materials.2. The value, apportioned as appropriate, on the following goods and services when supplied directly or indirectly by the buyer free of charge or at discount prices for use in connection with the production and sale for export of the imported goods, insofar as such value has not been included in the price actually paid or payable:(a) materials, components, parts and the like incorporated in the imported goods;(b) tools, dies, moulds and the like used in the production of the imported goods;(c) materials consumed in the manufacture of the imported goods;(d) engineering, development, artwork, design work, and plans and sketches undertaken elsewhere than in the Republic of Bulgaria and necessary for the production of the imported goods;3. royalties and license fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;4. the value of any part of the proceeds of any subsequent resale, granting the right to dispose of or use the imported goods that accrues directly or indirectly to the seller;5. expenses for:(a) transport of the imported goods to their entry point into the territory of the Republic of Bulgaria;(b) loading/unloading and handling operations associated with the transport of the imported goods to entry border crossing point of the Republic of Bulgaria;(c) insurance of the imported goods.(2) Additions to the price actually paid or payable shall be made under this article only on the basis of objective and quantifiable data.(3) No additions shall be made to the price actually paid or payable in determining the customs value except as provided in this article.(4) (New, SG No. 63/2000) In this chapter the term 'purchase commission' shall mean fees paid by an importer to his agent for the service of representing him in the supply of goods being valued.(5) (Previous (4) SG No. 63/2000) Notwithstanding Item 3 of Paragraph 1:1. charges for the right to reproduce the imported goods in the Republic of Bulgaria shall not be added to the price actually paid or payable for the imported goods in determining the customs value;2. payments made by the buyer for the right to distribute or resell the imported goods shall not be added to the price actually paid or payable for the imported goods if such payments are not a condition for the sale of the goods for export to the Republic of Bulgaria.Article 39. The customs value of the imported goods shall not include the following costs provided they are shown separately from the price actually paid or payable:1. transport costs of goods on the territory of the Republic of Bulgaria after their arrival;2. costs for construction, installation, assembly, maintenance or technical assistance, undertaken for the goods after their import;3. charges for the right to reproduce imported goods in the Republic of Bulgaria;4. purchase commissions;5. import duties, taxes, excise charges and fees payable in the Republic of Bulgaria by reason of the import or sale of the goods;6. interest under a financing arrangement of the buyer relating to the purchase of imported goods, irrespective of whether the credit is provided by the seller, by a bank or a third person, provided the interest is separated from the price payable, the financing agreement has been made in writing and the buyer can prove that:(a) such goods are sold at the moment of evaluation at the price reported as the price actually paid or payable, and(b) the reported interest rate does not exceed the level for such transactions prevailing in the country where, and at the time when, the financing was provided.Article 40. Specific rules may be laid down in the Regulations for determining the customs value of imported information carrier media intended for use in electronic data processing equipment and bearing data or instructions.Article 41. (Amended, SG No. 37/2003) The procedure for determining the customs value in specific cases shall be established by a Council of Ministers decree.Article 42. (1) The transfer of foreign exchange into Bulgarian currency for determining the customs value shall be done according to the exchange rate for foreign currencies announced by the Bulgarian National Bank.(2) The period of implementing the corresponding currency exchange rate shall be determined in the Regulations.Article 43. (1) The provisions of this chapter shall not affect the specific provisions for determining the customs value when importing goods under a different a customs destination.(2) Notwithstanding the provisions of Articles 35-37 the customs value of perishable goods usually delivered on consignment may at the request of the reporting person be determined under simplified procedures, defined in the Regulations.PART THREEENTRY OF GOODS INTO THE CUSTOMS TERRITORY OF THE REPUBLIC OFBULGARIA UNTIL THEY OBTAIN A CUSTOMS ASSIGNMENTChapter SevenENTRY OF GOODS INTO THE CUSTOMS TERRITORY OF THE REPUBLIC OF BULGARIAArticle 44. (1) From the time of their entry into the customs territory of the Republic of Bulgaria the goods shall be subject to customs supervision and may be subject to customs control in accordance with the provisions in force by the date of entry.(2) The goods shall remain under customs supervision until their customs status is determined. With the exception of cases referred to in Article 88, Paragraph 1 foreign goods shall remain under customs supervision also until their customs status is changed, or they enter a free zone or a free warehouse, or they are re exported or destroyed in accordance with Article 180.Article 45. (1) Goods brought into the customs territory of the country shall without delay be transported by the person bringing them into the country according to the instructions of the customs authorities to the designated customs office or to any other place designated by those authorities. Should this be necessary the customs authorities may specify the route for transporting the goods.(2) The person who assumes responsibility for the transport of goods after they have been brought into the customs territory of the Republic of Bulgaria shall become responsible for compliance with the obligation laid down in Paragraph 1.(3) Paragraph 1 shall not preclude the implementation of provisions of any other statutory instruments with respect to:1. parcels;2. tourist traffic;3. shipment of goods with negligible economic importance, on condition customs supervision and customs control possibilities are not thereby jeopardized.(4) Paragraphs 1,2 and 3 as well as Articles 46 to 60 shall not apply to goods which leave temporarily the customs territory of the Republic of Bulgaria, while being shipped between two points in that territory by sea or air, provided the carriage has been effected by a direct route by regular air service or shipping line without a stop outside of the customs territory of the Republic of Bulgaria.(5) Paragraph 1 shall not apply to goods on board a vessel or an aircraft crossing the territorial waters or airspace of the Republic of Bulgaria without having as their destination a port or airport on the country's customs territory.Article 46. (1) When, by reason of force majeure or unforeseeable circumstances, the person cannot comply with the obligation laid down in Article 45, Paragraph 1, he shall inform immediately the nearest customs authorities. When the goods are not destroyed or lost in total the customs authorities shall be informed of their exact location.(2) When, by reason of force majeure or unforeseeable circumstances, a vessel or an aircraft is forced to put into port or land temporarily in the customs territory of the Republic of Bulgaria and the obligation laid down in Article 38, Paragraph 1 cannot be complied with, the person bringing the vessel or aircraft into the customs territory of the country or any other person acting in his place shall inform immediately the customs authorities.(3) The customs authorities shall determine the measures in the cases referred to in Paragraphs 1 and 2 to be taken for customs supervision and, where appropriate, for ensuring the shipping of the goods to a customs office or to another location designated by them.Chapter EightPRESENTATION OF GOODS TO CUSTOMS AUTHORITIESArticle 47. Goods which have been transported pursuant to Article 45, Paragraph 1 shall be presented to the customs authorities by the person who has brought them into the customs territory of the Republic of Bulgaria or by the person who had undertaken the carriage of the goods following such entry.Article 48. For goods carried by travellers or placed under customs regime, but not presented to customs, other provisions for presentation may apply as provided in the Regulations.Article 49. Once goods have been presented to customs, they may be subject to examination or sample-taking, for specifying their customs assignment with the permission of the customs authorities.Chapter NineMANIFESTATION AND UNLOADING OF GOODS PRESENTED TO CUSTOMS AUTHORITIESArticle 50. (1) For goods presented to customs authorities a customs manifest shall be submitted.(2) The customs manifest shall be submitted immediately after the goods have been presented to customs. The customs authorities may allow a different period for submitting the manifest which shall not extend beyond the first working day following the day on which the goods were presented to customs.Article 51. (1) The manifestation of goods shall be done under terms and procedures specified in the Regulations. The customs authorities may accept also a commercial or other document instead of a customs manifest if it contains the particulars necessary for identification of the goods.(2) The customs manifest shall be submitted by:1. the person who has brought the goods into the customs territory of the Republic of Bulgaria or by the person who has undertaken the carriage of the goods following such entry; or2. the person in whose name the persons referred to in Item 1 had acted.Article 52. The cases when the customs authorities may submit a manifest ex officio or waive the submission of a customs manifest shall be defined in the Regulations.Article 53. (1) Goods shall be unloaded or reloaded from the vehicles carrying them solely with the permission of the customs authorities in places designated by them.(2) No permission shall be required in the event of a breakdown or other circumstances necessitating the immediate unloading of all or parts of the goods. In that case, the customs authorities shall be informed forthwith.(3) For the purpose of customs control and inspection of goods, including the vehicles carrying them, the customs authorities may at any time require goods to be unloaded and unpacked.Article 54. Goods shall be removed from their original location only with the permission of the customs authorities.Chapter TenOBLIGATION TO PERFORM FORMALITIES ON OBTAINING A CUSTOMSASSIGNMENT FOR THE GOODS PRESENTED TO THE CUSTOMS AUTHORITIES(Title - SG No. 37/2003)Article 55. (Supplemented SG No. 37/2003) Foreign goods presented to the customs authorities shall obtain an admissible customs assignment.Article 56. (1) (Amended SG No. 37/2003) The respective formalities for obtaining a customs assignment shall be performed for the manifested goods within the following deadlines:1. forty five days from the date of submitting the customs manifest for goods carried by sea;2. twenty days from the date of submitting the customs manifest for goods carried otherwise than by sea;(2) Depending on the specific circumstances the customs authorities may set deadlines shorter or longer than the periods referred to in Paragraph 1. The extension shall not exceed the period actually required in the specific case.Chapter ElevenTEMPORARY STORAGE OF GOODSArticle 57. Until obtaining a customs assignment the goods presented to the customs authorities shall have the status of "goods in temporary storage."Article 58. (1) Goods in temporary storage shall be stored only in places approved by the customs authorities and under conditions laid down by them.(2) (Supplemented, SG No. 153/1998) The customs authorities shall be entitled to require the person holding the goods to provide security for any customs debt that may arise under Article 199, Paragraph 1, Items 5, 6 and 7 as well as also taxes and excise duties.Article 59. Goods in temporary storage shall not be subject to handling other than the one intended for ensuring their preservation in an unchanged state without modifying their appearance or technical characteristics. This provision shall not prejudice the provisions of Article 49.Article 60. (1) (Amended SG No. 37/2003, SG No. 109/2007) Without prejudice to the provisions on arising of customs debts, for goods, in respect of which the respective formalities for obtaining an admissible customs assignment have not been performed, the customs authorities shall notify the consignee of those goods in writing with recorded delivery that within a period of thirty days from the date of receiving such notification the good would be treated as abandoned in favour of the state.(2) (Supplemented, SG No. 109/2007) After the expiry of the period referred to in Paragraph 1 the goods shall be considered as abandoned in favour of the state, unless the customs debt is discharged within the above term or is treated as not having arisen under the provisions of the customs legislation.(3) (Amended SG No. 37/2003, SG No. 109/2007) When the consignee of the goods is a foreign person, or an unknown person, a native person with address unknown or who cannot be located on the address indicated, no notification as referred in Paragraph 1 shall be sent and the goods shall be deemed abandoned in favour of the state after the expiration of six months from the day of their manifestation.(4) (Amended SG No. 37/2003, SG No. 109/2007) The customs authorities may, after assuming the responsibility and the costs from the holder of the goods, allow their transfer to a different location under customs supervision.Chapter TwelveFOREIGN GOODS WITH A TRANSIT STATUSArticle 61. The provisions of Article 45, with the exception of Paragraph 1, and of Articles 46 to 60, shall not apply when goods that have been placed under a transit regime are brought into the customs territory of the Republic of Bulgaria.Article 62. Once foreign goods which have been moved under the transit regime reach their destination in the customs territory of the Republic of Bulgaria and have been presented to the customs authorities in accordance with the provisions governing transit, Articles 49 to 60 shall apply.Chapter ThirteenOTHER PROVISIONSArticle 63. When circumstances so require, the customs authorities shall be entitled to order the destruction of the goods presented to them for customs clearance, after informing the holder of the goods thereof. The cost for destroying the goods shall be borne by the holder.Article 64. When the customs authorities find that goods have been brought illegally into the customs territory of the Republic of Bulgaria or have been withheld from customs supervision, they shall take the legal measures provided, including the sale of the goods.PART FOURCUSTOMS ASSIGNMENTSTITLE ONEGENERAL PROVISIONSArticle 65. (1) In case there are no statutory restrictions or prohibitions the goods may obtain the requested customs assignment under the conditions laid down in this Act irrespective of their type, quantity, origin, consignment or destination.(2) Paragraph 1 shall not preclude the imposition of prohibitions or restrictions in relation to national security, public order or morality, the protection of health and life of humans, animals or plants, the protection of the national heritage of artistic, historic or archaeological value or the protection of industrial and commercial property.(3) (New, SG No. 37/2003) When performing customs control under Paragraph 2, unless otherwise provided, the customs authorities may postpone with a substantiated decision for a period of up to five working days the permission for the assignment requested for the goods and shall inform forthwith the authorities competent for exercising supervision and control related to the respective prohibitions or restrictions.TITLE TWOCUSTOMS REGIMESChapter FourteenPLACING GOODS UNDER CUSTOMS REGIMESArticle 66. (1) All goods intended to be placed under a customs regime shall be subject to reporting for the appropriate regime.(2) Local goods reported for exportation, temporary exportation, outward processing, transit or customs warehousing regime shall be subject to customs supervision form the time of their reporting before the customs office until their leaving the customs territory of the Republic of Bulgaria or destruction or the invalidation of the export manifest.Article 66a. (New, SG No. 63/2000) (1) The Director of the Customs Agency may designate in an order individual customs institutions, which perform customs activities with respect to certain types of goods and/or in compliance with the customs regimes under which they will be placed.(2) The order under Paragraph 1 shall be published in the State Gazette.Article 67. (Amended, SG No. 63/2000) (1) The reporting before the customs authorities shall be made:1. in writing;2. electronically;3. orally;4. by means of any other act whereby the holder of the goods expresses his wish to place them under a customs regime.(2) The terms and procedure for reporting in the cases under Paragraph 1, Items 2, 3 and 4 of shall be established in the Regulations.Section IReporting in Writing under the Normal ProcedureArticle 68. (1) Reports in writing shall be made with a customs statement on a standard form and under a procedure established by the Minister of Finance.(2) (New SG No. 37/2003) The customs statement must be signed and shall contain all data required for applying the provisions of the customs regime for which the goods have been reported.(3) All documents specified statutorily for allowing the customs regime for which the goods have been reported shall be enclosed with the customs statement in order of allow the customs regime for which the goods have been reported.Article 69. Customs statements which comply with the provisions laid down in Article 68 shall be accepted by the customs authorities immediately, provided the reported goods are presented to them.Article 70. (1) (Amended, SG No. 63/2000) Reporting may be performed by any person, including an agent, who is able to present the goods in question or to have them presented to the competent customs authority, together with all the documents required for allowing the customs regime in respect of which the goods are reported.(2) (Amended, SG No. 63/2000) When the acceptance of a customs statement imposes particular obligations on a specific person, the reporting must be performed by that person or on his behalf.(3) The reporting person must be established in the Republic of Bulgaria. This condition shall not apply to persons who:1. (amended, SG No. 63/2000) report for transit or temporary importation; or2. report goods on an occasional basis, provided that the customs authorities consider the reporting to be admissible.Article 71. (1) Once the customs statement is accepted, on the request of the reporting person the customs authorities may allow him to amend one or more of the particulars in the statement. No goods other than those originally reported in the statement shall be included in the amendments.(2) No amendment shall be allowed when the request has been made after the customs authorities have:1. informed the reporting person that they intend to examine the goods;2. established an inaccurate data in the customs statement;3. allowed goods to be released.Article 72. (1) The customs authorities shall, at the request of the reporting person, invalidate a customs statement already accepted, when the reporting person proves that the goods were reported by mistake for the respective customs regime or that, as a result of special circumstances, remaining of the goods under the reported customs regime is unjustified.(2) When the customs authorities have informed the reporting person of their intention to examine the goods, the request for invalidation of the customs statement may be accepted after the examination has taken place.(3) The customs statement shall not be invalidated after the permission on releasing the goods, except in cases defined in accordance with the Regulations.(4) Invalidation of the customs statement shall not prevent the application of the penal provisions.Article 73. The date used for the purposes of applying the customs regime for which the goods were reported shall be the date of acceptance of the customs statement by the customs authorities unless otherwise provided for by a statutory instrument.Article 74. For verification purposes of the accepted customs statements the customs authorities may perform:1. document control of the customs statement and the documents accompanying it. The customs authorities may require the reporting person to present other documents for verifying the accuracy of the particulars contained in the customs statement;2. examination of the goods and taking samples for analysis or control.Article 75. (1) Transport of the goods to the places where they are to be examined, samples to be taken and all the handling necessities shall be carried out and be under the responsibility of the reporting person. The costs incurred shall be borne by the reporting person.(2) The reporting person shall be entitled to be present when the goods are examined and when the samples are taken. The customs authorities shall require the presence of the reporting person or his agent when the goods are examined or samples are taken, in order to facilitate the performance of the examination.(3) When samples are taken in accordance with the provisions in force the customs authorities shall not owe any compensation but shall bear the costs of their analysis or examination.Article 76. (1) When only a part of the goods covered by a customs statement is examined, the results of the examination shall be taken to apply to all the goods covered by that customs statement.(2) The reporting person may request a further examination of the goods if he considers that the results of the partial examination are not valid as regards to the remainder of the goods reported.(3) For the purposes of Paragraph 1, when a customs statement form contains several types of goods, the particulars relating to each of those types shall be deemed to constitute a separate customs statement.Article 77. (1) The results of the verification of the customs statement shall be used for the purpose of applying the customs regime under which the goods are placed.(2) When the customs statement is not verified, the provisions of the basis for applying the customs regime shall be the particulars reported in the customs statement.Article 78. (1) The customs authorities shall take the measures necessary to identify the goods as required in order to ensure compliance with the terms of the customs regime for which the goods have been reported.(2) Means of identification affixed to the goods or in cargo sections of vehicles may be removed or destroyed only by the customs authorities or with their permission. This provision shall not be applied in cases of force major or unforeseeable circumstances in view of ensuring the protection of the goods and vehicles.Article 78a. (New SG No. 37/2003) (1) The customs authorities shall postpone with a substantiated decision giving permission on releasing goods reported for import regime and shall inform forthwith the competent market supervision authorities when in the course of the inspection they establish that:1. the goods contain certain characteristics giving rise to reasonable doubts on the existence of serious and immediate risk for health and safety in case of their use in normal foreseeable conditions, or2. the goods are not accompanied by the documents required pursuant to the safety rules or are not marked in compliance with these rules.(2) When in the cases under Paragraph 1 the competent authorities consider that the goods do not represent serious and immediate risk for health and safety the customs authorities shall allow the release of the goods provided all other requirements and formalities for placing the goods under an import regime have been complied with.(3) In case the customs authorities are not notified within three working days from the day following the actions under Paragraph 1 by the competent market supervision authorities on measures adopted by them, the release of the goods shall be allowed provided all other requirements and formalities provided in applicable law for placing the goods under import regime have been complied with.(4) The customs authorities shall not allow the release of the goods and their placement under import regime when they have been notified by the competent market supervision authorities that the goods pose a serious and immediate risk for health and safety and prohibition measures have been taken in relation to their release on the market. In these cases the customs authorities shall place on the invoice and the other documents accompanying the goods the text "Dangerous product - import regime not allowed".(5) The customs authorities shall not allow the release of the goods and their placement under import regime when they have been notified by the competent market supervision authorities that the goods do not comply with applicable safety rules and prohibition measures have been taken in relation to their release on the market. In these cases the customs authorities shall place on the invoice and the other documents accompanied the goods the text "Product incompatible with requirements - import regime not allowed".(6) The provisions of this article shall apply to goods of which the customs authorities have been notified in advance by the market supervision authorities that they are subject to control on compliance with safety rules. The notification shall be performed under a procedure coordinated between the customs authorities and the market supervision authorities.(7) The article shall apply inasmuch a statutory instrument does not provide otherwise in relation to the organisation of border control of specific goods.Article 78b. (New SG No. 37/2003) The provisions of Article 78a shall not apply when veterinary and zoo-technical control and control in relation to protecting plants and animals have been regulated with a statutory instrument.Article 79. (1) (Amended SG No. 37/2003) In compliance with the provisions of Article 80, when the conditions for placing the goods under a specific regime are met and provided the goods are not subject to any prohibitive and restrictive measures, the customs authorities shall allow the release of the goods as soon as the particulars in the customs statement have been verified or accepted without verification. Permission for release of the goods shall be granted also when the verification cannot be completed within a reasonable period of time and the presence of the goods is no longer required its performance.(2) The release of the goods shall be allowed for the entire amount of goods reported in the same customs statement. When a customs statement covers several types of goods the particulars relating to each type shall be deemed to constitute a separate customs statement.Article 80. (1) When the acceptance of a customs statement gives rise to a customs liability, the release of the goods covered by this customs statement shall be allowed only if the customs liability has been paid or secured. This provision shall not apply to the temporary importation regime with partial exemption from import customs duties in compliance with the provisions of Paragraph 2.(2) When the regime for which the goods are reported requires security the customs authorities shall allow the release of the goods only after its institution.(3) Goods dangerous for health, for the environment, flammable and perishable goods may be released with the written permission of the customs authorities even before security is provided.Article 81. The customs authorities shall undertake the legally provided measures, including confiscation and sale in favour of the state, of goods which:1. cannot be released due to the following reasons:(a) it has been impossible to undertake or perform examination of the goods within the period prescribed by the customs authorities for reasons attributable to the reporting person;(b) the documents required for placing the goods under the requested customs regime have not been produced;(c) the import or export customs duties have nor been paid or secured within the prescribed term;(d) are subject to prohibition or restriction measures;2. (Amended SG No. 153/1998) are not removed within the period after giving the permission.Section IIReporting in Writing Under the Simplified ProcedureArticle 82. (1) In order to simplify customs formalities, while ensuring procedures for reporting and the terms specified in the regulations, the customs authorities shall grant permission:1. for submitting a simplified customs statement being the customs statement under Article 68 omitting certain of the particulars or not containing some of the required documents;2. instead of the customs statement under Article 68 to submit a commercial or administrative document, accompanied by an application for placing the goods under the respective customs regime.3. to perform the reporting of the goods for the respective customs regime through entering them in the accounting records of the reporting person. In this case the customs authorities shall be entitled to waive the requirement that the reporting person presents the goods.(2) The simplified customs statement, the commercial or administrative documents or the entry of the goods in the accounting records must contain the particulars necessary for identifying the goods. The entry of the goods in the accounting records must contain also the date on which it is done.(3) Except in cases to be determined in the Regulations, the reporting person shall be obliged to furnish a supplementary customs statement, which may be of general, periodic or recapitulative nature.(4) The supplementary customs statement under Paragraph 3 shall be considered a single document indivisible from the documents referred to in Paragraph 1, Items 1, 2 and 3 which shall take effect on the date of acceptance by the customs authorities. In the cases referred to in Paragraph 1, Item 3 entry in the records of the accounting documents shall have the same legal force as acceptance of the customs statement under 68.(5) Special simplified procedures for the transit regime shall be laid down in the Regulations.Section IIIOther Types of ReportingArticle 83. (1) (Supplemented, SG No. 63/2000, previous Article 83, SG No. 37/2003) When reporting before the customs authorities is made electronically, orally or through other means as referred to in Article 67, the provisions of Articles 68 to 82 shall apply mutatis mutandis without prejudice to the principles set out therein.(2) (New SG No. 37/2003) When reporting before the customs authorities is made electronically the customs authorities may not require the attachment of the documents under Article 68, Paragraph 3. In these cases the documents must be available to the customs authorities for the purposes of customs control.(3) (New SG No. 37/2003) The Minister of Finance shall specify the terms and procedures for reporting electronically to the customs authorities mutates mutandis.Section IVSubsequent Control of ReportingArticle 84. (1) After the permission for release of the goods the customs authorities shall be entitled, at their own initiative or at request of the reporting person, to perform subsequent control of the customs statement.(2) The customs authorities shall be entitled, after releasing the goods for the purpose of establishing the truthfulness of the customs statement, to perform control of the commercial documents and data relating to the import and export operations in respect of the goods reported or of subsequent commercial operations with them. Such control shall be carried out at the premises of the reporting person, of any other person directly or indirectly involved in the said operations as well as of any other person in possession of the said documents and data. The customs authorities may also examine the goods when it is possible for them to be produced.(3) When during a second inspection of the customs statement or subsequent control it is established that the respective customs regime has been applied on the basis of incorrect or incomplete information, the customs authorities shall take the necessary measures while taking into account the new circumstances.(4) Any person involved directly or indirectly in activities of importation, exportation and transit operations of goods shall be obliged to keep for a period of five years the entire documentation on the specific operations, regardless of the type of the carrier media used. The period shall start running from the end of the calendar year during which:1. for goods, processed under the importation customs regime, other than those mentioned in Item 2, or processed under the exportation customs regime, the corresponding customs statements have been accepted;2. for goods, processed under the importation customs regime with reduced or zero-rate duty due to their specific usage, these goods cease to be subject of customs control;3. for goods placed under another customs regime, the respective customs regime comes to an end;4. for goods placed in a free zone or a free warehouse, these goods leave the free zone or the free warehouse.Article 84a. (New, SG No. 45/2005) (1) Follow-up control on reporting shall be carried out in respect of all persons who are engaged or involved in an activity the control over which is assigned to the customs authorities by law.(2) In the course of follow-up control an inspection shall be carried out of the compliance with the law of the actions of the inspected person for applying the respective regimes, procedures and trade policy measures, as well as of the fulfilment of its obligations for paying public state receipts collected by the customs authorities.(3) Customs authorities shall be obliged to establish impartially the facts and circumstances under Paragraph 2 both to the detriment and in favour of the inspected person. In the course of the inspection the inspected person shall be entitled to receive information on the facts and circumstances established insofar as this would not impede its carrying out.(4) The inspection shall comprise the goods, the stocks, the accounting records, the trade, accounting and other documentation of the inspected person that is material for the specific case.(5) (Amended, SG No. 105/2005) The customs authorities shall be obliged to make clear to the inspected person and to the other participants in the proceedings under this Act their procedural rights provided for in the Tax and Social Insurance Procedure Code, according Criminal Procedure Code and to ensure the possibilities that they should be exercised.Article 84b. (New, SG No. 45/2005) (1) Follow-up control shall be exercised by customs officials in specialised units for follow-up control in the Central Customs Directorate and in the regional customs directorates. Should this be required follow-up control units may be created also in the territorial customs directorates under the procedure of Article 11, Paragraph 3.(2) The competence of the follow-up control units shall be determined according to the registered address, the permanent address respectively, of the inspected person. The competence of the follow-up control unit at the Central Customs Directorate shall be national.(3) Should it be needed to establish facts and circumstances related to the activity of the inspected person, its affiliate, facility, business or property which is within the competence of another follow-up control unit the Director of the Customs Directorate may permit that the entire inspection or individual actions be performed by that unit.(4) Should specific knowledge and qualifications be needed other customs officers who command them may participate in the inspection or expert opinions may be requested from them.Article 84c. (New, SG No. 45/2005) (1) An inspection within the follow-up control framework shall be carried out on the basis of an assignment order.(2) The order under Paragraph 1 shall be issued by:1. The Director of the Customs Agency or by officials from the Customs Agency authorised by him/her.2. A Director of a regional customs directorate and head of customs office and the Director of the Customs Agency shall be notified thereof.(3) The order under Paragraph 1 shall be issued in writing and shall contain:1. the legal and factual grounds for conducting the inspection;2. the names and positions of the customs officers who shall carry out the inspection;3. information on the inspected person;4. the inspection period;5. the type and scope of the inspection;6. the initial date of commencing the inspection and the time of its completion;(4) The order under Paragraph 1 shall be handed over to the inspected person by the customs officers at the start of the inspection. The inspected person may be notified in advance of the start of the inspection should this not threaten its objective.(5) The order under Paragraph 1 may be amended by a new substantiated order of the body that has assigned the inspection. The amendment shall be deemed done as of the date of issuing the new order which shall be handed over to the inspected person.(6) The period for carrying out the inspection within the follow-up control framework shall not exceed two months.(7) In case of justified need the period under Paragraph 6 may be extended by not more than four months with a new substantiated order of the body that has assigned the inspection.(8) The body that has assigned the inspection shall stop proceedings:1. in case of force majeure - as of the date of its occurrence;2. when judicial or administrative proceedings have been instituted that are material to the inspection's outcome - on presenting a certificate thereof issued by the body before which proceedings have been instituted;3. under other circumstances provided for by law.(9) The body that has assigned the inspection may direct that it be suspended for a certain period but for not longer than 30 days subject to a substantiated application by the inspected person and following a verification of the circumstances.(10) The period for carrying out the inspection shall not run as of the date of occurrence of the relevant circumstance for its suspension until the date of its resumption.(11) The inspection shall be resumed on an order of the body that has assigned it after the grounds for its suspension have become defunct. The resumption order shall be delivered to the inspected person.(12) Orders on assigning, amending, suspending and resuming an inspection shall not be subject to appeal.Article 84d. (New SG No. 45/2005) (1) The inspected person shall be obliged to cooperate with the customs authorities when they are clarifying facts and circumstances that are material to the inspection by:1. providing commercial, accounting and other documentation;2. providing explanations requested by the customs authorities;3. drawing up information memoranda;4. certifying information memoranda and copies of documents requested by the customs authorities;5. ensure access to official premises, warehouses and cash offices;6. ensure space and conditions for carrying out the inspection;7. appoint persons to grant cooperation in conducting the inspection.(2) The inspected person shall be obliged, within reasonable time specified by the customs authorities but not less than 24 hours, to provide any information, data, documents, papers, things, information carriers and other evidence relating to the facts and circumstances subject to establishment in the course of the inspection and to specify all persons, state and municipal bodies with which they may be found. This term may be extended should important reasons so require.(3) The inspected person shall be obliged to ensure to the customs authorities access to its IT system when collection, storing and processing of the information under Paragraph 2 is done by such a system.(4) In case it is impossible to carry out the inspection at the premises of the inspected person it shall be performed at the customs office. In this case the customs authorities shall compile a protocol and an inventory of the documents, things and other evidence that are handed over to them.Article 84e. (New SG No. 45/2005) (1) The evidence in the proceedings under this section may be factual data related to circumstances that are material to the purposes of the inspection, contribute to their clarification and are collected and verified under the procedure herein.(2) The evidence shall be collected and verified through written explanations, information memoranda and statements of the inspected persons or of their representatives, minutes on explanations of third persons who are not participating in the administrative proceedings, protocols on the actions of the customs authorities, expert opinions, official documents received through information exchange with the administrations of other states within international cooperation as well as through other means provided for by law.(3) Any person, state and municipal authority shall be obliged, within seven days after the receipt of a request by the customs authorities, to provide information, data, documents, papers, things, information carriers and other evidence relating to the facts and circumstances specified in the request. This term may be extended by the body that has assigned the inspection.(4) When conducting an inspection the customs authorities may request cooperation in writing from other bodies in performing actions for the purpose of establishing obligations or liabilities of the inspected person.(5) When special knowledge that the customs authorities do not possess is required to clarify circumstances and issues that have arisen in the course of the inspection on their initiative or on request by the inspected person the body that has assigned the inspection shall institute an expert examination. When the expert examination has been instituted on request by the inspected person the costs for its carrying out shall be at the expense.Article 84f. (New SG No. 45/2005) (1) In the course of an investigation the customs authorities may take action for securing evidence through distraint or through searches and seizures under the procedure of Article 16, Paragraph 7 and 8 of documents, papers and other information carriers, goods and data processing means, as well as through copying data from and on technical carriers allowing its reproduction, taking the necessary steps to preserve its authenticity.(2) Where no other possibility exists to secure evidence the customs authorities may seal off offices, pay desks, warehouses, trade and other premises for a period of 72 hours.(3) A statement shall be drawn up for the actions under Paragraphs 1 and 2 a copy of which shall be handed over to the inspected person.(4) Before the expiry of the term under Paragraph 2 the body that has assigned the inspection may request from the district court within the jurisdiction of which the facility is located to extend the period of the sealing off. The court shall issue a ruling in a closed sitting on the day the request is received and shall determine a term for the sealing off. The ruling shall not be subject to appeal.(5) The customs authorities shall lift the sealing off if before the expiry of the term under Paragraph 2 the district court has not allowed its extension.(6) The actions to secure evidence may be appealed against within three days before the body that has assigned the inspection, which shall take a substantiated decision not later than the day following the day of the receipt of the appeal. With its decision the body that has assigned the inspection may confirm in whole or in part or revoke the actions appealed against.(7) (Amended, SG No. 30/2006, effective 1.03.2007) Should the body under Paragraph 6 fail to make a decision within the term prescribed or in case the appeal is rejected the actions to secure evidence may be appealed against in respect of their compliance with the law within seven days after the expiry of the term for making a decision under Paragraph 6, of the receipt of the decision respectively, before the administrative court within the jurisdiction of which the body that has assigned the inspection is located. The court shall issue a ruling within 14 days, which shall not be subject to appeal.(8) The appeal shall not suspend the actions to secure evidence.(9) The decision under Paragraph 6 or the ruling under Paragraph 7, which order to discontinue the actions to secure evidence, shall be implemented by the customs authority that has undertaken them.Article 84g. (New SG No. 45/2005, amended, SG No. 105/2005) The provisions of Tax and Social Insurance Procedure Code shall apply to the issues relating to collection, verification and securing evidence and to preparing means of evidence that are not regulated respectively.Article 84h. (New SG No. 45/2005) In the course of conducting the inspection the customs authorities may impose interim security measures under the procedure of Chapter Twenty Six, Section Ia to prevent actions relating to disposition with the property of the inspected person that may result in impossibility or substantial difficulties to collect customs duties or other public state receivables.Article 84i. (New SG No. 45/2005) (1) The customs authorities carrying out an inspection within the framework of follow-up control may accept as established the levy elements determined by them as well as to accept as established the avoidance of trade policy measures when one of the following circumstances exists:1. lack or failure to present accounting information pursuant to the Accountancy Act or the way the accounting is kept does not allow to establish or to determine the amount of the public state receivables as well where the documents required to establish the amount of the public state receivables and to apply trade policy measures have been destroyed at variance with the established procedures;2. the required documents are missing or damaged in a way to make them unfit for use;3. the required additional information and data cannot be obtained since the inspected person has not been found at the registered address or at the permanent address following a conscientious and documented search by the customs authorities;4. in the course of the inspection the inspected person has failed to produce the relevant evidence within the time limit under Article 84d, Paragraph 2.(2) In the cases under Paragraph 1 the customs authorities shall take into consideration any of the circumstances related to the inspected person concerning:1. the type and nature of the activity carried out;2. the customs duties and other public state receivables paid;3. the transactions and the balance in the bank accounts;4. the official and private documents;5. the contracts concluded by the inspected person related to its business;6. the difference between the raw materials and resources supplied and input in production;7. aggregate information on the profit realised, respectively on the income or revenues from other persons engaged in the same or similar business under the same or similar conditions;8. price and other terms of the transactions concluded, including information on such transactions between persons related to the inspected person;9. the supplies received and carried out and the right to tax credit used;10. other evidence material to the specific case.(3) The circumstances under Paragraphs 1 and 2 shall be pointed out in the inspection report.(4) When the circumstances under Paragraph 1, Items 1,2 and 4 exist the customs authorities shall inform the inspected person that they accept as established the levy elements determined by them and that they accept as established the avoidance of the trade policy measures and shall determine a deadline for producing documents and an opinion.Article 84j. (New, SG No. 45/2005) (1) When in the course of an inspection evidence is collected within the time limit under Article 84c on customs violations committed or on a different amount of the customs duties and other public state receivables due, the customs authorities conducting the inspection shall hold with the inspected person a final discussion of the circumstances established in the course of the inspection and of the ensuing legal consequences unless the inspected person rejects the discussion in writing. Within seven days after the final discussion the inspected person may present an opinion in writing on the preliminary findings as well as new evidence.(2) Minutes shall be drawn up of the final discussion, which shall be signed by the customs officers who have conducted the inspection and by the inspected person.(3) In case the inspected person rejects the final discussion or does not sign the minutes under Paragraph 2 this fact shall be certified by two witnesses.Article 84k. (New, SG No. 45/2005) (1) Within 14 days after the expiry of the term under Article 84c, Paragraph 3, Item 6 a written report on the findings shall be drawn up which shall contain:1. number and date;2. the names and positions of the customs officers who have conducted the inspection;3. the factual and legal grounds for the inspection;4. information on the inspected person;5. the type and scope of the inspection;6. the actions carried out and the established facts and circumstances;7. the findings made;8 the steps taken to secure the evidence and the public state receivables;9. proposals on determining the amount of the customs duties and the other public state receivables and on instituting administrative penal proceedings;10. list of the evidence enclosed;11. signatures of the customs officers who have drawn up the report and of the head of the respective follow-up control unit.(2) The evidence enclosed with the report shall be an integral part thereof. The originals of the collected written evidence shall be enclosed with the copy of the report intended for the customs body that has assigned the inspection and certified copies thereof shall be enclosed with the copy intended for the inspected person.(3) The factual findings in the report must be supported with evidence and shall be deemed true unless proven otherwise.(4) Within seven days after its completion the inspection report and the evidence enclosed therewith shall be handed over to the inspected person against signature and shall be presented to the body that has assigned the inspection for follow-up action. In case it is impossible to hand over the report to the inspected person in person the customs authorities shall dispatch it by registered mail with a return receipt.(5) The inspected person may present written objections and produce additional evidence before the body that has assigned the inspection within 14 days after the date of receipt of the report.Article 84l. (New, SG No. 45/2005) The provisions of Article 211d shall apply to handing over notices and documents in the course of carrying out inspections within the framework of follow-up control.Chapter FifteenIMPORTATIONArticle 85. (1) Release for importation shall confer upon foreign goods the customs status of local goods.(2) Importation shall entail application of trade policy measures, completion of the formalities laid down in respect of importation of goods and the levying of the customs duties due.Article 86. (1) If after the date of acceptance of the importation customs statement but before the goods are released, the rate of customs duties or the charges with equivalent effect are reduced the reporting person may request application of the more favourable rates or charges. In such cases the provisions of Article 73 shall not apply.(2) Paragraph 1 shall not apply when the goods have not been released for reasons attributable to the reporting person.Article 87. When a consignment contains goods with different tariff classifications, the separate reporting of which leads to processing and costs disproportionate to the import duties chargeable, the customs authorities shall be entitled, at the request of the reporting person, to agree that import duties be charged on the whole consignment on the basis of the tariff classification of the goods with highest customs duty rate.Article 88. (1) (Amended SG No. 37/2003) Goods which due to their use for specific purposes are placed under import regime with reduced or zero rates of customs duties or with exemption of customs duties shall remain under customs supervision. Customs supervision shall come to an end when:1. the conditions laid down for granting a reduced or zero rate of duty or for exemption of import customs duties cease to apply;2. the goods are exported or destroyed; or3. the use of the goods for purposes other than those laid down for the application of a reduced or zero rate of duty or for exemption of customs duties is permitted subject to payment of the customs duties due.(2) The provisions referred to in Article 94 Paragraphs 2 and 3 and Article 96 shall apply, mutatis mutandis, to goods referred to in Paragraph 1.Article 89. Imported goods shall lose their status of local goods when:1. the import customs statement is invalidated after their release; or2. the import duties payable on those goods are repaid or remitted under terms and procedures laid down in the Regulations.Chapter SixteenSUSPENSIVE ARRANGEMENTS REGIMES AND CUSTOMS ECONOMIC REGIMESSection IGeneral ProvisionsArticle 90. (1) For the purposes of application of the regimes referred in Articles 91 to 96:1. the term "suspensive arrangements regime" shall refer to foreign goods, placed under the following regimes:(a) transit;(b) customs warehousing;(c) inward processing with deferred payment;(d) processing under customs control;(e) temporary importation.2. the term "customs economic regime" shall refer to goods placed under the following regimes:(a) customs warehousing;(b) inward processing;(c) processing under customs control;(d) temporary importation;(e) outward processing.(2) Goods placed under a deferred payment regime and goods under the inward processing regime in the form of the drawback system, that have undergone the formalities for import and the formalities provided in Article 128, Paragraph 4 shall be considered imported goods.(3) Imported goods, which under the inward processing regime or the customs control processing regime have undergone no form of processing, shall be considered goods in unaltered state.Article 91. The use of any customs economic regime shall be conditional upon authorization being issued by the customs authorities.Article 92. The authorizations referred to in Article 91 and in Article 106, Paragraph 1 shall be granted in compliance with the conditions provided for the respective regime:1. (amended and supplemented, SG No. 63/2000) to persons who are in a position to ensure the proper conduct of the operations; and2. (amended, SG No. 63/2000) when the customs authorities are in a position to ensure the supervision and control of the regime without having to introduce administrative requirements that do not correspond to the economic need for using the regime.Article 93. (1) The conditions under which the respective regime is applied shall be set out in the authorization.(2) The holder of the authorization shall be obliged to notify the customs authorities of any change occurring after its issuing which might influence its contents and the conditions for its application.Article 94. (1) In cases specified in the Regulations or when goods produced from goods under the suspensive arrangements customs regime shall not be considered as local, but as placed under the same customs regime.(2) For placing goods under the suspensive arrangements customs regime the customs authorities may require security for the customs debt.(3) Specific provisions may be laid down in the Regulations for providing the respective security for each customs regime with suspensive arrangementsArticle 95. (Amended and supplemented, SG No. 63/2000) (1) A customs economic regime with suspensive arrangements shall be concluded when the goods under this regime or the received compensating or processed products obtain a new permissible customs-approved assignment.(2) The customs authorities shall take all necessary measures prescribed in the Regulations in relation to the goods in respect of which the regime has not been concluded according to the conditions prescribed.Article 96. The rights and obligations of the holder of a customs economic regime may, on the conditions laid down by the customs authorities, be transferred consecutively to other persons who comply with the requirements for using the respective regime.Section IITransitArticle 97. (1) (Amended and supplemented, SG No. 37/2000) The transit regime shall allow the movement from one point to another point within the customs territory of the Republic of Bulgaria of:1. foreign goods without being charged with import customs duties and without being subject to trade policy measures;2. (amended, SG No. 63/2000, SG No. 37/2003; effective 1.11.2003) local goods in cases and under terms specified in the Regulations for which restrictive or promotional export measures have been provided for with the aim that these measures should not be avoided or used illegally.(2) (SG No. 37/2003; effective 1.11.2003) Movement as referred to in Paragraph 1 shall take place:1. under the provisions of the transit regime in the Republic of Bulgaria;2. under cover of a TIR Carnet used as transit guaranty document under the Customs Convention for International Transport of Goods under cover of TIR Carnet (TIR Convention 1975) where:(a) (amended, SG No. 37/2003; effective 1.11.2003) the movement began or is to end outside the country; or(b) (amended, SG No. 37/2003; effective 1.11.2003) the movement relates both to consignments of goods which must be unloaded in the country and to goods to be unloaded outside the country;3. under cover of an ATA Carnet used as transit guaranty document under the prescriptions of the Customs Convention for Temporary Admission of Goods (ATA Convention, 1961), as well as other international conventions, to which the Republic of Bulgaria is a party;4. (new, SG No. 37/2003; effective 1.11.2003) under the cover of form 302 (NATO MANIFEST 302) pursuant to the ratified, promulgated and effective international agreements of the Republic of Bulgaria with the North Atlantic Treaty Organisation, the NATO member-countries and the partner countries participating in "Partnership for Peace";5. (previous Item 4, SG No. 37/2003, effective 1.11.2003) by post (including parcel post).(3) The transit regime shall apply without prejudice to the specific provisions applicable to the movement of goods placed under an economic customs regime.Article 98. (Amended, SG No. 37/2003; effective 1.11.2003) (1) The transit regime shall end and the obligation of the holder of the regime shall be concluded when the goods placed under the regime and the required documents are presented at the customs office of destination in accordance with the provisions of the regime.(2) The customs authorities shall conclude the transit regime when they establish on the basis of comparing the information available at the sending with the information available at the receiving customs office that the transit regime has ended normally.Article 99. (Amended, SG No. 37/2003; effective 1.11.2003) The transit regime for carrying goods through the territory of another country shall be applied when:1. this possibility is provided under an international agreement;2. carriage through the other country is effected on the basis of a single transport document issued in the customs territory of the Republic of Bulgaria. In such cases the operation of that regime shall be suspended temporarily on the territory of the other country.Article 100. (Amended, SG No. 37/2003; effective 1.11.2003) (1) The persons responsible for the transit regime shall be obliged to provide security in order to ensure the payment of the customs debt and of the other public state receivables that might arise for the goods.:(2) The security may be:1. one-off, covering a single transit operation. or2. general, covering several transit operations when the customs authorities have permitted the person responsible to use such genera; security.(3) The permission under Paragraph 2, Item 2 shall be given to native person who:1. use regularly the transit regime or about whom the customs authorities know that they are capable of fulfilling their obligations for this regime, and2. have not committed serious or repeated violations of the customs or the tax legislation.(4) Persons who prove before the customs authorities that they meet higher reliability requirements may receive permission to use a general security of a reduced size or permission for exemption from the obligation to provide security. The additional criteria for this permission shall include:1. the correct use of the transit regime during a certain period;2. cooperation with the customs authorities, and3. in relation to the permission for exempting from the obligation to provide security - a sufficiently stable financial condition for covering the liability of the persons.(5) The detailed terms for applying the criteria as well as the procedure for giving the permission under Paragraph 4 shall be specified in the Regulations.(6) The permission for exempting from the obligation to provide security under Paragraph 4 shall not apply to transit operations comprising goods specified in the Regulations as high risk goods.(7) Taking into consideration the principles in Paragraphs 4 the use of a general security of a reduced size for the transit regime may be temporarily prohibited as an exceptional measure under special circumstances.(8) Taking into consideration the principles in Paragraphs 4 the use of a general security of a reduced size for the transit regime may be temporarily prohibited for goods which, when the general security regime is used, have been identified and are the subject of a wide range of fraud.(9) The measures under Paragraphs 7 and 8 shall be introduced with an order of the Director of the Customs Agency which shall be published in the State Gazette.Article 101. (Amended, SG No. 37/2003; effective 1.11.2003) No provision of security shall be required for:1. carriage by water or by air;2. carriage by electric lines and pipelines3. carriages by rail performed by the licensed railway carriers and carriage of postal Items, including parcels;4. carriage specified by a statutory instrument of the Council of Ministers.Article 102. (Amended and supplemented, SG No. 63/2000, amended, No. 37/2003; effective 1.11.2003) (1) The person responsible shall be the holder of the transit regime. The person responsible shall be obliged:1. to present the goods in the receiving customs office in an unchanged state within the prescribed term and in compliance with the measures taken by the customs authorities for their identification;2. to observe the provisions for the transit regime.(2) Notwithstanding the obligations of the person responsible under Paragraph 1 the carrier or the consignee who accepts the goods and knows that they have been placed under a transit regime shall also be obliged to present them in an unchanged state at the receiving customs office within the prescribed term and in compliance with the measures taken by the customs authorities for their identification.Article 103. (1) (Previous Article 103, SG No. 37/2003, effective 1.11.2003) The terms, procedure and exemptions in the application of the transit regime shall be established in the Regulations.(2) (New, SG No. 37/2003; effective 1.11.2003) While observing the measures provided for the goods in the Regulations it shall be allowed:1. to introduce through bilateral or multilateral agreements less strict formalities valid for certain types of goods or activities, pursuant to criteria specified in the agreements;2. to introduce with a Council of Ministers act less strict formalities for goods under certain conditions.Section IIICustoms WarehousingArticle 104. (1) The customs warehousing regime shall allow the placing and storage in a customs warehouse of:1. foreign goods which shall not be charged with import duties and shall not be subject to trade policy measures;2. local goods, for which pursuant to existing provisions the application of measures normally pertinent to export shall be used when placing them in a customs warehouse.(2) Customs warehouse shall mean any place approved by and under the supervision of the customs authorities where goods may be stored under certain conditions.(3) The cases in which the goods referred to in Paragraph 1 may be placed under the customs warehousing regime without being stored in a customs warehouse shall be determined in the Regulations.Article 105. (1) A customs warehouse may be either public or private. A public warehouse shall mean a warehouse available for use by any person for the warehousing of goods while a private warehouse shall mean a customs warehouse which can be used only for warehousing of goods by the warehouse keeper.(2) The warehouse keeper shall be a person authorized to manage the customs warehouse.(3) The depositor to the warehouse shall be the person bound by a customs statement to place the goods under customs warehousing regime or to whom these rights and obligations have been transferred.Article 106. (1) The opening and managing of a customs warehouse shall be allowed after the issue of an authorization by the customs authorities, unless the said authorities operate the customs warehouse themselves.(2) Any person wishing to open and manage a customs warehouse shall make a request in writing to the customs authorities containing the information required for granting the authorization and proving the economic viability for warehousing. The authorization shall lay down the conditions for opening and managing the customs warehouse.(3) The authorization shall be granted only to local persons.Article 107. The warehouse keeper shall be obliged:1. to ensure that while the goods are in the customs warehouse they are not removed from customs supervision;2. (amended SG No. 37/2003; effective 1.11.2003) to observe the obligations that arise from the storage of goods;3. to comply with the terms specified in the authorization.Article 108. (1) (Amended SG No. 37/2003) When the authorization concerns a public warehouse the responsibilities referred to in Article 107, Items 1 and/or 2 may be assigned exclusively upon the depositors in the warehouse.(2) The depositor shall be responsible at all times for complying with the obligations arising from the placing of goods under the customs warehousing regime.Article 109. The rights and obligations of a warehouse keeper maybe transferred to another person with the agreement of the customs authorities.Article 110. The customs authorities, without prejudice to the provisions laid down in Article 94, may demand that the warehouse keeper provides a guarantee in connection with the responsibilities specified in Article 107.Article 111. (1) The stock records of all goods placed under the customs warehousing regime shall be kept by a person approved by the customs authorities under terms and according to a procedure endorsed by them, except where the public warehouse is managed by the customs authorities.(2) Goods placed under the customs warehousing regime shall be entered in the records immediately after their entry in the warehouse.(3) Subject to the application of Article 92, the customs authorities may not require keeping stock records when:1. (amended SG No. 63/2000, supplemented, SG No. 37/2003; effective 1.11.2003) the responsibilities referred to in Article 107, Items 1 and/or 2 lie exclusively with the depositor; and2. the goods are placed under customs warehousing regime on the basis of a written report forming part of the normal procedure or a commercial or other document accompanied with a request for placing the goods under that customs regime.Article 112. (1) Where a reasonable economic need exists and customs supervision is not adversely affected thereby, the customs authorities shall be entitled to allow:1. local goods, other than goods referred to Article 104, Paragraph 1, Item 2 to be stored in a customs warehouse;2. foreign goods to be processed in the customs warehouse admitted under the inward processing regime, subject to the conditions provided for by that regime;3. foreign goods to be processed in the customs warehouse under the customs control processing regime, subject to the conditions provided for by that regime;4. formalities that may not be performed in a customs warehouse under Items 2 and 3 pursuant to the Regulations.(2) In the cases referred to in Paragraph 1 the goods shall not be placed under the customs warehousing regime.(3) The customs authorities may require the goods referred to in Paragraph 1 to be entered in the stock records under the procedure of Article 111.Article 113. (1) There shall be no limit to the length of time the goods may remain under the customs warehousing regime.(2) The Regulations may set certain cases where the customs authorities shall be entitled to set a time limit before the expiration of which the principal shall be obliged to apply for another customs assignment.Article 114. (1) While being under the customs warehousing regime, imported goods may be subject to the usual operations listed in the Regulations intended to ensure their preservation, improve their commercial appearance or quality or prepare them for distribution or resale.(2) The operations under Paragraph 1 shall be coordinated in advance with the customs authorities, which shall lay down the conditions for their performance.Article 115. (1) When specific circumstances so warrant, goods placed under the customs warehousing regime may temporarily be removed from the customs warehouse. The removal of the goods must be authorized in advance by the customs authorities, which shall lay down the conditions under which it may be carried out.(2) While they are outside the customs warehouse the goods may undergo the operations under Article 114 on the conditions set out therein.Article 116. The customs goods placed under customs warehousing regime may be transferred from one customs warehouse to another with the permission of the customs authorities.Article 117. (Amended SG No. 63/2000, SG No. 37/2003; effective 1.11.2003) (1) When a customs debt occurs for the import of goods and the customs value of these goods is determined on the basis of the price actually paid or payable that includes expenses for storing the goods and their preservation while the goods are kept in the warehouse, these expenses shall not be included in the customs value provided they have been separated from the price of the goods actually paid or payable.(2) When foreign goods have undergone the usual operations in the meaning of Article 114, on the request of the reporting person for determining the import customs duties, the data on the type, quantity and the customs value shall apply that would have been applicable at the moment of the occurrence of the customs debt for these goods had they not undergone the operations specified. The exceptions from these provisions shall be set out in the Regulations.(3) When foreign goods are placed under import regime pursuant to Article 82, Paragraph 1, Item 3 without they being presented before the customs authorities the type, customs value and the quantity of these goods at the moment of placing them under the customs warehousing regime shall be valid for determining the amount of the import customs duties provided these levy elements had been accepted or allowed by the customs authorities when placing the goods under the customs warehousing regime and the interested person has not submitted a request for applying the levy elements valid at the moment of the occurrence of the customs debt. The customs processing performed shall not prevent the application of the follow-up control provisions. For more information visit www.solicitorbulgaria.com id: 336 Mon, 04 Aug 2008 06:44:09 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-1 http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-1 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/CUSTOMS_ACT1.jpg EUR http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-1 legal 80 negotiable Bulgarian Customs Act, part 2 info@solicitorbulgaria.com (SolicitorBulgaria) Section IVInward ProcessingArticle 118. (1) Without prejudice to Article 119, the inward processing regime shall allow the following goods to be used in the customs territory of the Republic of Bulgaria in one or more processing operations:1. foreign goods intended for re-export in the form of compensatory products, without being subject to import duties or trade policy measures;2. (supplemented, SG No. 63/2000) imported goods with reimbursement of or exemption from the import duties chargeable if they are exported from the customs territory of the Republic of Bulgaria.(2) For the purposes of the inward processing customs regime, the following meanings shall apply:1. suspension payment system shall mean the inward proceeding regime as provided for in Paragraph 1, Item 1;2. drawback system shall mean the inward proceeding regime as provided for in Paragraph 1, Item 2;3. processing operations shall mean:(a) the treatment of goods including installing or assembling them to other goods;(b)… For more information visit http://www.solicitorbulgaria.com id: 335 Section IVInward ProcessingArticle 118. (1) Without prejudice to Article 119, the inward processing regime shall allow the following goods to be used in the customs territory of the Republic of Bulgaria in one or more processing operations:1. foreign goods intended for re-export in the form of compensatory products, without being subject to import duties or trade policy measures;2. (supplemented, SG No. 63/2000) imported goods with reimbursement of or exemption from the import duties chargeable if they are exported from the customs territory of the Republic of Bulgaria.(2) For the purposes of the inward processing customs regime, the following meanings shall apply:1. suspension payment system shall mean the inward proceeding regime as provided for in Paragraph 1, Item 1;2. drawback system shall mean the inward proceeding regime as provided for in Paragraph 1, Item 2;3. processing operations shall mean:(a) the treatment of goods including installing or assembling them to other goods;(b) the processing of goods;(c) the repair of goods, including restoring them entirely;(d) the use of certain goods defined in the Regulations which are not contained in the compensating products but which allow or facilitate their production even if they are entirely or partially used in the manufacturing process;4. compensating products shall mean all products resulting from operations for improving the goods;5. equivalent goods shall mean all Bulgarian goods used instead of imported goods for the manufacture of the compensating products;6. rate of yield shall mean the quantity or percentage of compensating products obtained in the course of processing a given quantity of imported goods.Article 119. (1) The customs authorities shall allow:1. compensating products to be obtained from equivalent goods;2. compensating products obtained from equivalent goods to be exported from the customs territory of the Republic of Bulgaria before importation of the imported goods.(2) Equivalent goods must be of the same quality and have the same characteristics as the imported goods. In cases determined by the Regulations, equivalent goods may be allowed to be at a more advanced stage of manufacture than the imported goods.(3) Where Paragraph 2 applies the imported goods shall be regarded for customs purposes as equivalent goods and the equivalent - as imported goods.(4) (Amended and supplemented, SG No. 37/2003; effective 1.11.2003) The application of the measures in Paragraph 2 may be prohibited, restricted or facilitated under terms and procedures specified in the Regulations.(5) Where Paragraph 2, Item 2 applies and the compensating products would be subject to export customs duties and they were not exported or re- exported under an inward processing regime, the holder of the authorization shall provide security to ensure payment of the duties, should the imported goods not be imported within the period prescribed.Article 120. The authorization for inward processing shall be issued at the request of the person who carries out or orders the processing operations.Article 121. The authorization shall be issued to local persons or to foreign persons in respect of imports of a non-commercial nature:1. (supplemented SG No. 37/2003; effective 1.11.2003) when the imported goods can be identified in the compensating products with the exception of goods mentioned in Article 118, Paragraph 2, Item 3 (d) or in the cases referred to in Article 119, when compliance with the conditions laid down in respect of equivalent goods can be verified;2. (supplemented SG No. 37/2003; effective 1.11.2003) when the inward processing regime can help create more favourable conditions for exportation or re-exportation of compensating products, provided that the essential economic interests of producers in the Republic of Bulgaria are not adversely affected (trade conditions). The cases in which trade conditions shall be deemed complied with shall be specified in the Regulations.Article 122. (1) The customs authorities shall specify a term within which the compensating products must be exported or re exported or assigned another customs assignment. This term shall be determined taking into account the duration of the processing operations and disposing with the compensating products.(2) (Supplemented, SG No. 63/2000) The term shall run from the date on which the foreign goods are placed under the inward processing regime. The customs authorities may grant an extension of this term upon submission of a duly substantiated request by the holder of the authorization. The customs authorities may allow a term, which shall start running within a calendar month or quarter, to expire on the last day of the subsequent calendar month or quarter respectively.(3) Where the provisions of Item 2 of Article 119 (1) apply, the customs authorities shall specify the term for importing and reporting foreign goods for the regime. This term shall run from the date of acceptance of the export manifest relating to compensating products obtained from the equivalent goods.(4) Special terms may be laid down in the Regulations for certain imported goods or processing operations.Article 123. (1) The customs authorities shall set either the rate of yield of the processing operations or the method of determining such rate. The rate of yield shall be determined on the basis of the actual terms under which the processing operation is, or should be, carried out.(2) Based on acquired data for generally performed processing operations, the Regulations may set a standard rate of yield for processing operations for goods with the same characteristics under the same technological conditions, leading to the manufacture of a compensating product with constant quality.Article 124. The cases and conditions under which the goods in unaltered state or compensating products shall be considered to have been placed under regime for importation shall be specified in the Regulations.Article 125. (1) Subject to the provisions laid down in Article 126, when a customs liability occurs, its amount shall be determined on the basis of levying elements corresponding to the imported goods at the time of accepting the report for placing these goods under the inward processing regime.(2) (Amended, SG No. 63/2000) If at the time of acceptance of the customs statement for a preferential tariff treatment within tariff quotas or ceilings exists for identical goods as those reported, these goods may be eligible for the envisaged preferential treatment, provided at the moment of acceptance of the statement for placing the imported goods under an inward processing regime they complied with the terms for preferential tariff treatment.Article 126. Beyond the cases under Article 125 the compensating products:1. (amended, SG No. 63/2000) shall be subject to the import customs duties for these products when they are placed under importation and are included in a list attached to the Regulations and if they are in amounts which correspond to the rate of yield of the exported part of the compensating products, not included in that list. The holder of the authorization may request for the duty on those products to be assessed under the conditions referred to in Article 125;2. shall be subject to import customs duties determined in accordance with the provisions applicable to suspensive arrangements or free zone or free warehouse regime, if they had been placed under such regime or are in a free zone or in a free warehouse, and:(a) the person concerned may request the duty to be assessed in accordance with Article 125;(b) when the compensating products have been assigned one of the customs assignments specified, other than processing under customs control, the amount of the import customs duties shall not be less than the amount calculated in accordance with Article 125;3. may be assessed under the customs control processing regime if the imported goods may be placed under that regime;4. (supplemented SG No. 63/2000) shall enjoy a more favourable tariff treatment owing to their special purpose, provided such treatment is envisaged for the imported identical goods;5. (supplemented SG No. 63/2000) shall be exempt from import customs duties if such exemption is provided for the imported identical goods in the cases under Article 181, Paragraph 1.Article 127. (1) The compensating products or goods in unaltered state or parts thereof may be exported temporarily for the purpose of further processing operations outside the customs territory of the Republic of Bulgaria under the terms of the outward processing regime.(2) When a customs debt occurs in respect of re-imported products and goods under Paragraph 1, the following shall be charged:1. (supplemented SG No. 63/2000) the compensating products or goods in unaltered state under Paragraph 1 whose import customs duties shall be calculated pursuant to Articles 125 and 126, and2. the re-imported products after their processing outside the customs territory of the Republic of Bulgaria, the amount of import customs duties of which shall be calculated pursuant to the provisions of the outward processing regime under the same terms that would have been applied had the products exported under the said regime been admitted for importation before such exportation took place.Article 128. (1) (Amended SG No. 37/2003; effective 1.11.2003) The drawback system may be applied to all goods, with the exception of the cases for which, at the time the accepting the import customs statement:1. there are quantitative import restrictions for imported goods;2. tariff measure within quotas are applied to imported goods;3. import or export licences are required for imported goods or certificates within the agricultural policy;4. export subsidies or charges are provided for compensating products.(2) (Amended SG No. 37/2003; effective 1.11.2003) No drawback shall be performed if at the moment of accepting the export manifest of compensating products the presentation of import or export licences is required for them or certificates within the agricultural policy or export subsidies or charges are provided for them.(3) (Amended SG No. 37/2003; effective 1.11.2003) The exceptions from Paragraphs 1 and 2 may be specified in the Regulations.(4) The import customs statement must contain indications that the drawback system is being used as well as the number and the date of the authorization for its application.Article 129. Under the drawback system the provisions laid down in Article 119, Paragraph 1, Item 2 and Paragraphs 3 and 5, Article 122, Paragraph 3, Article 124, Article 125, Article 126, Item 3 and Article 132 shall not apply.Article 130. Temporary exportation of compensating products carried out as provided for in Article 127, Paragraph 1, shall not be considered to be exportation within the meaning in Article 131 except where such products are not re-imported in the Republic of Bulgaria within the terms prescribed.Article 131. (1) The holder of the authorization shall be entitled to request the import duty to be reimbursed or remitted when he provides proof to the customs authorities that the imported goods under the drawback SYSTEM or the compensating products obtained from them are:1. exported; or2. placed, with a view of being subsequently re-exported, under one of the following customs regimes: transit, customs warehousing, temporary importation, inward processing with suspensive arrangement or in a free zone or a free warehouse.(2) The provision in Paragraph 1 shall be applied provided all conditions for using the respective regime have been met.(3) For obtaining a customs assignment under Paragraph 1, Item 2 imported goods and compensating products shall be deemed to be foreign goods.(4) The reimbursement application shall be made within a period specified in the Regulations.(5) (Amended SG No. 153/1998, No. 63/2000) Compensating products or goods in an unchanged state placed under a customs regime or in a free zone or a free warehouse pursuant to the provisions of Paragraph 1 may be placed under importation regime only with the authorized by the customs authorities. In such cases, in compliance with the provisions laid down in Article 126, Item 2, the amount of customs duties reimbursed or remitted shall correspond to the amount of the customs debt.(6) For the purpose of determining the amount of import customs duties to be reimbursed or remitted, the provisions in Article 126, Item 1 shall apply, mutatis mutandis.Article 132. When the inward processing regime applies under the suspension payment system compensating products shall be exempted from export customs duties collectable for identical products obtained form local goods instead of imported ones.Section VProcessing Under Customs ControlArticle 133. The customs control processing regime shall allow foreign goods to be admitted to the customs territory of the Republic of Bulgaria for processing with the purpose of altering their appearance or state without being subject to import customs duties or trade policy measures. Products resulting from such processing (processed products) shall be cleared for importation in the country after paying the import customs duties due for them.Article 134. (Supplemented SG No. 37/2003; effective 1.11.2003) The cases and the specific terms under which the customs control processing regime may be used shall be determined in the Regulations.Article 135. (1) Authorization for the customs control processing regime shall be granted at the request of the person who carries out the processing or arranges for it to be carried out.(2) The authorization shall be granted only to local persons when:1. (supplemented SG No. 153/1998, SG No. 63/2000) the imported goods can be identified in the processed products;2. after processing the goods it is not economically viable to restore the appearance they had before being placed under the regime;3. the use of the regime will not lead to circumvention of the rules on origin and quantitative restrictions applicable to imported goods;4. (supplemented SG No. 37/2003; effective 1.11.2003) the application of the regime stimulates the development of the respective activity in the country without affecting adversely essential economic interests of local manufacturers of similar goods (economic terms). The cases in which economic terms shall be complied with shall be specified in the Regulations.Article 136. The provisions laid down in Article 122, Paragraphs 1 and 2 and Article 123 shall apply as well in cases of processing under customs control, mutatis mutandis.Article 137. When a customs debt occurs in respect of goods in an unaltered state or products in an intermediate stage of processing in relation to that provided for in the authorization, the amount of that debt shall be determined on the basis of the levying elements established for the imported goods at the time of acceptance of the report relating for the processing of the goods under customs control.Article 138. (1) (Amended SG No. 37/2000) When allowing customs control processing regime if the imported goods qualified for the conditions of preferential tariff treatment and such treatment was applicable to products identical to the processed products cleared for importation the preferential customs rates shall apply for calculating the import customs duties for the processed products..(2) The provisions of Paragraph 1 shall apply also in cases of tariff quotas or ceilings. In these cases the quantity of imported goods actually used in the manufacture of the processed products shall be deducted from the quantity of the imported goods.Section VITemporary ImportationArticle 139. The temporary importation regime shall allow the use of the customs territory of the Republic of Bulgaria with total or partial exemption from import customs duties and without applying trade policy measures for foreign goods intended for re-export without undergoing any changes except for the normal depreciation due to their use.Article 140. Authorization for temporary importation shall be granted at the request of the person who uses the goods or arranges for them to be used.Article 141. (1) The customs authorities shall not authorise temporary importation when it is impossible to identify the imported goods.(2) The customs authorities may authorize temporary importation regime without identification of the goods when their nature or the operations to be carried out will not bring about any abuse of the regime.Article 142. (1) The customs authorities shall determine the period within which imported goods must be re-exported or obtain a new customs assignment. This period must be sufficient for carrying out the authorized use.(2) (Supplemented SG No. 63/2000) The maximum period during which the goods may remain under the temporary importation regime shall be twenty four months in compliance with the provisions on the specific terms under Article 143. The customs authorities may specify a shorter period with the consent of the person concerned.(3) (Supplemented SG No. 63/2000) In case of exceptional circumstances the customs authorities may, at the request of the person concerned, extend the terms under Paragraphs 1 and 2 within reasonable limits for carrying out the authorized use.Article 143. The cases, terms and conditions under which the temporary importation procedure may be used with total exemption from import duties shall be determined in the Regulations.Article 144. (1) (Supplemented SG No. 37/2003; effective 1.11.2003) The use of temporary import regime with partial exemption form import customs duties shall be authorised for goods which are not indicated in the cases under Article 143 or are indicated but do not comply with all conditions provided for the authorisation of temporary importation with full exemption form import customs duties.(2) (Amended SG No. 37/2003; effective 1.11.2003) The terms for using temporary import regime with partial exemption from import customs duties as well as the goods for which this regime may be used shall be determined in the Regulations.Article 145. (1) (Amended SG No. 153/1998) The amount of import customs duties payable in respect of goods placed under temporary importation regime with partial exemption from import duties shall be set at 3 per cent, for every month or fraction of a month, of the amount of customs duties which would have been payable for the said goods had they been allowed under importation regime on the date on which they were placed under the temporary importation regime.(2) The amount of the partial import customs duties due shall not exceed the, amount of customs duties which would have been due if the goods concerned had been cleared under the importation regime on the date they were placed under the temporary importation regime, without adding the interest due.(3) The transfer of the rights and obligations deriving from the temporary importation regime pursuant to Article 96 shall not require the application of the same exemption arrangement to each of the periods of use.(4) Where the transfer of the rights and obligations has been effected under the regime with partial exemption for two holders of the regime during the same month the holder of the initial authorization shall be liable for the amount of import customs duties due for the whole month.Article 146. (1) (Amended SG No. 63/2000) When a customs debt occurs in respect of imported goods its amount shall be determined on the basis of the levy elements appropriate to those goods at the time of acceptance of the customs statement for their placing under the temporary importation regime. In cases referred to in Article 143, specified in the Regulations, the amount of debt shall be determined on the basis of the levy elements appropriate to the goods in question at the time the corresponding customs debt occurred.(2) When, for a reason other than placing of goods under temporary importation regime with partial exemption from import duties a customs debt occurs in respect of such goods, the amount of that debt shall be equal to the difference between the amount of customs duties calculated pursuant to Paragraph 1 and the customs duties calculated pursuant to Article 145.Section VIIOutward ProcessingArticle 147. (1) Without prejudice to the provisions of Articles 156 to 161 and to Article 127 applicable under the standard exchange system the outward processing regime shall allow local goods to be exported temporarily from the customs territory of the Republic of Bulgaria in order to undergo processing operations and the products resulting from those operations to be cleared for importation regime with full or partial exemption from import customs duties.(2) The temporary export of local goods shall include their levying with export duties, application of trade policy measures and other formalities provided for the exportation of local goods outside the territory of the Republic of Bulgaria.(3) For the purposes of the outward processing regime, the following definitions shall apply:1. temporarily exported goods shall mean goods placed under the outward processing regime;2. processing operations shall mean the operations referred to in Article 118, Paragraph 2, Item 3 (a), (b) and (c);3. compensating products shall mean all products resulting from processing operations;4. rate of yield shall mean the quantity or percentage of compensating products obtained from the processing of a given quantity of temporarily exported goods.Article 148. (1) Local goods shall not be placed under the outward processing regime, when:1. their exportation gives rise to reimbursement or remission of import customs duties;2. (amended SG No. 37/2003, effective 1.11.2003) prior to the exportation they have been under the importation regime with full exemption from import duties by virtue of their use for specific purposes as long as the conditions for granting such exemption continue to apply;3. their exportation allows the receipt of subsidy.(2) Derogations from the provisions in Paragraph 1, Item 2 may be specified in the Regulations.Article 149. (1) Authorization for outward processing shall be issued at the request of the person who arranges the performance of the processing operations.(2) When the processing operations consist of incorporating goods with Bulgarian origin in the meaning herein into goods obtained outside the Republic of Bulgaria and imported as compensating products, authorization for the use of the outward processing regime may be granted to another person. The authorization shall be granted if the sale of the exported goods is facilitated without adversely affecting the essential interests of local producers of products identical or similar to the imported compensating products.(3) The cases and the specific arrangements under which the provisions laid down in Paragraph 2 shall apply shall be determined in the Regulations.Article 150. Authorization shall be granted to local persons when:1. it will be possible to establish that the compensating products have resulted from processing of the goods exported temporarily. Derogations from this provision may be specified in the Regulations;2. the authorization to use the outward processing regime shall not seriously harm the essential economic interests of local producers.Article 151. (1) The customs authorities shall specify the period within which the compensating products must be re-imported into the customs territory of the Republic of Bulgaria. Such period may be extended on submission of a duly substantiated request by the holder of the authorization.(2) The customs authorities shall set the rate of yield of the operation and, where necessary, the method for determining that rate.Article 152. (1) Full or partial exemption from import customs duties under Article 153, Paragraph 1 shall be authorised provided the compensating products have been reported for import on behalf of or at the expense or:1. the holder of the authorization; or2. any other local person, who has obtained the agreement of the holder of the authorization and if the condition of the authorization is met.(2) The total or partial exemption from import customs duties provided for in Article 153, Paragraph 1 shall not be authorised when one or some of the conditions or obligations under the outward processing regime are not fulfilled with the exception of cases where such non-fulfilment has not adversely affected the functioning of the regime.Article 153. (1) The total or partial exemption from import duties under Article 147, Paragraph 1 shall be effected by deducting from the amount of the import customs duties applicable to the imported compensating products the amount of the import customs duties that would have been applicable on the same date to the temporarily exported goods had they been imported into the customs territory of the Republic of Bulgaria from the country where they underwent the processing operation or the last processing operation.(2) (Supplemented SG No. 37/2003; effective 1.11.2003) The amount deducted under Paragraph 1 shall be calculated on the basis of the quantity and type of the temporarily exported goods on the date of acceptance of the statement placing them under the outward processing regime and on the basis of the other levy elements applicable to them on the date of acceptance of the customs statement for the compensating products. Where Paragraph 1 is applied the value of the temporarily exported goods shall be the one that shall be taken into consideration for these goods when assessing the customs value of the compensating products pursuant to Article 38, Paragraph 1, Item 2 (a) or if the value cannot be assessed in this way - the difference between the customs value of the compensating products and the processing costs determined through any other appropriate method.(3) (Amended SG No. 37/2003; effective 1.11.2003) For the purposes of applying Paragraph 2:1. the Regulations shall specify the costs that shall not be taken into consideration when assessing the deduction sum;2. when the temporarily exported goods, before their placement under the outward processing regime, have been placed under import regime with reduced customs duties by reason of their use for specific purposes and until the conditions specified for applying the reduced customs duties remain in force, the deduction sum shall be the amount of the import customs duties actually collected before their release under the import regime;(4) (New SG No. 37/2003; effective 1.11.2003) In case the goods exported temporarily could have used reduced or zero-rate customs duties due to their designation for specific purposes had they been placed under import regime, this amount of the customs duties shall be taken into consideration provided these goods had been subject to the same operations provided for such specific use in a country where they underwent the operation or the last processing operation.(5) (New SG No. 37/2003; effective 1.11.2003) When the compensating products use the preferential tariff measure in the meaning of Article 26, Paragraph 1, Item 4 or 5 and if such measure is applicable for goods with the same tariff number as the one of the goods exported temporarily, the amount of the customs duties that shall be taken into account when calculating the deduction sum under Paragraph 1 shall be the one that would have been applicable had the goods exported temporarily complied with the terms under which this preferential tariff measure could be applied;(6) (Previous (4) SG No. 37/2003; effective 1.11.2003) If within the trade turnover between the Republic of Bulgaria and third countries provisions have been made for exemption from import duties in respect of certain compensating products, the provisions laid down in this Article shall not apply.Article 154. (1) When the purpose of a processing operation is the repair of the goods exported temporarily their subsequent importation shall take place with full exemption from import customs duties if it is proven that the repairs were carried out free of charge due either to a warranty obligation or to a manufacturing defect.(2) Paragraph 1 shall not apply when the defect was established and taken into account at the time of the original importation of these goods.Article 155. (1) (Previous Article 155, SG No. 37/2003; effective 1.11.2003) When the purpose of the processing operation is the repair of the goods exported temporarily for payment the partial exemption from import customs duties shall be the establishing of the amount of the customs duties due on the basis of the levy elements of the compensating products at the date of acceptance of the import customs statement for those products, and the customs value shall be equal to the repair costs, provided that those costs represent the only payment by the holder of the authorization and are not influenced by any links between him and the repairer.(2) (New SG No. 37/2003; effective 1.11.2003) As a departure from the provisions of Article 153 the Regulations may specify in which cases and under what specific conditions the goods may be placed under import regime following outward processing, taking the processing costs as a basis for determining the customs value for the purposes of applying the Customs Tariff of the Republic of Bulgaria.Article 156. (1) The compensating product may be replaced by imported goods (replacement product) when applying the standard exchange system and in compliance with the provisions of Articles 156 to 161.(2) The customs authorities shall authorise the standard exchange system to be used when the processing operation involves the repair of Bulgarian goods.(3) The provisions applicable to compensating products shall also apply to replacement products with the exception of the ones under Article 149, Paragraphs 2 and 3 and Article 149.(4) The customs authorities may permit, under conditions they lay down, advance import of replacement products before the exportation of the goods exported temporarily.(5) In case of advance import of a replacement product security shall be instituted for the import customs duties.Article 157. (1) Replacement products shall have the same tariff classification, the same trade quality and technical characteristics as the goods exported temporarily intended for the envisaged repairs.(2) When the goods exported temporarily have been used before being exported, the replacement products must also have been used. The customs authorities may allow the replacement product not to be used if it has been supplied free of charge due to a warranty obligation or to manufacturing defect.Article 158. Standard exchange shall be authorized only when it is possible to verify that the conditions laid down in Article 157 are met.Article 159. (1) In case of advance import the export of goods exported temporarily shall be carried out within two months from the date of acceptance of the import customs statement for the replacement products.(2) The customs authorities may extend the period under Paragraph 1 on submission of a duly substantiated request by the holder of the authorization.Article 160. In case of advance import and when the provisions of Article 153 are applied the amount to be deducted shall be determined on the basis of the levy elements of goods exported temporarily on the date of acceptance of the statement placing them under the outward processing regime.Article 161. Article 149, Paragraphs 2 and 3 and Article 150 shall not apply vis a vis standard exchange.Article 162. The procedures provided for the outward processing regime shall also apply to goods using trade tariff policy measures other than the tariff.Chapter SeventeenEXPORTATIONArticle 163. (1) The exportation regime shall represent export of local goods outside the customs territory of the Republic of Bulgaria and shall entail the application of formalities provided for the exportation of goods, including trade policy measures and, where applicable, export customs duties.(2) Local goods intended for exportation shall be placed under the exportation regime. This provision shall not apply to goods placed under the outward processing regime or the temporary exportation regime.(3) The export manifest shall be submitted at the customs office in the area where the goods are packed or loaded for export. Exceptions from this provision may be specified in the Regulations.(4) To local goods for which the act provides fiscal preferences for export the exportation regime may apply even in cases where the goods do not leave the customs territory of the Republic of Bulgaria under terms and procedures specified in the Regulations.Article 164. Exportation shall be authorised provided the goods leave the customs territory of the Republic of Bulgaria in the same state they were in when the export manifest was accepted.Chapter EighteenTEMPORARY EXPORTATIONArticle 165. (1) The temporary exportation regime shall allow the export of local goods outside the customs territory of the Republic of Bulgaria under the condition that they be re-imported without having undergone any change except the normal depreciation due to their use.(2) (Amended, SG No. 63/2000) The terms, procedures and time limits concerning the temporary exportation regime shall be established in the Regulations.TITLE THREEOTHER CUSTOMS ASSIGNMENTSChapter NineteenFREE ZONES AND FREE WAREHOUSESSection IGeneral ProvisionsArticle 166. Free zones and free warehouses shall be separate parts of the customs territory of the Republic of Bulgaria or premises situated in that territory in which:1. for the purpose of import customs duties and trade policy importation measures foreign goods are considered as being outside the customs territory of the Republic of Bulgaria provided they have not been placed under import regime or another customs regime and have not been used or consumed in contravention to the customs regulations;2. local goods may use the measures applicable for exportation of goods if this is provided for in another act or instrument of the Council of Ministers.Article 167. (1) (Amended SG No. 37/2003; effective 1.11.2003) Free zones shall be enclosed with the exception of the ones under Article 168a. Free zones and free warehoused shall have defined entry and exit checkpoints.(2) New construction in a free zone shall be coordinated with the customs authorities regarding the possibility of exercising customs supervision and control. Coordination shall take place within a period of thirty days. If the customs authorities do not notify the applicant within this period the coordination shall be deemed completed.Article 168. (1) (Supplemented SG No. 37/2003; effective 1.11.2003) The perimeter and the entry and exit points of free zones or free warehouses shall be subject to supervision by the customs authorities save for the free zones specified in Article 168a.(2) The customs authorities shall be entitled to exercise customs control on persons, vehicles and goods conveyed by them that enter or leave a free zone or a free warehouse.(3) Access to a free zone or a free warehouse may be denied to persons who do not follow the rules provided herein.(4) Goods entering, leaving or remaining in a free zone or a free warehouse may be subject to control by the customs authorities. To enable such control all necessary documents accompanying the goods entering or leaving a free zone or a warehouse shall be presented to the customs authorities or a person designated by them who shall keep them at their disposal. The customs authorities may require presentation of other documents. When control is exercised the goods shall be made available to the customs authorities.Article 168a. (New SG No. 37/2003; effective 1.11.2003) (1) The Council of Ministers may establish free zones in which customs inspections and formalities shall be carried out pursuant to the customs warehousing regime applying the provisions for this regime related to customs duties. Articles 170, 176 and 179 shall not apply to these free zones.(2) The provisions under Article 44 (2), Article 2, Item 8 of Article 199 (1), Item 6 of Article 199 (3), Item 5 of Article 202 (1) shall not be applied for the free zones in compliance with para 1.Section IIPlacing Goods in Free Zones or Free WarehousesArticle 169. (1) Both local and foreign goods may be placed in a free zone or a free warehouse.(2) The customs authorities shall be entitled to require that goods which present a danger or are likely to damage other goods or which require special preservation conditions be placed in premises or locations specially equipped for such goods.Article 170. (1) Without prejudice to Article 168, Paragraph 4 the entering of goods in a free zone or a free warehouse shall not be reason for their presentation to the customs authorities, neither for filing a customs statement.(2) For carrying out the customs formalities provided, goods shall be presented before the customs authorities which:1. have been placed under a customs regime which is concluded when they enter a free zone or a free warehouse. Presentation of the goods shall not be necessary if it is not required under the provisions of the respective customs regime;2. are subject to authorisation for reimbursing or remitting import customs duties provided such authorisation allows to place these goods in free zone or free warehouse;3. qualify for the measures under Article 166, Item 2.(3) The customs authorities shall be notified of the goods subject to export customs duties or to other export regulation provisions.(4) At the request of the persons concerned the customs authorities shall certify the foreign or local status of goods placed in a free zone or a free warehouse.Section IIIOperation of Free Zones and Free WarehousesArticle 171. (1) There shall be no limit to the length of time goods may remain in free zones or free warehouses.(2) Time limits may be specified in the Regulations for some goods remaining in free zones or free warehouses.Article 172. (1) Any industrial and commercial activity as well provision of services shall be authorized in a free zone or a free warehouse in compliance with the provisions herein. The carrying out of such activities shall be notified in advance to the customs authorities.(2) The customs authorities shall be entitled to prohibit or restrict the activities referred to in Paragraph 1, depending on:1. the nature of the goods concerned;2. the requirements of customs supervision.(3) The customs authorities shall be entitled to prohibit persons who do not observe the provisions herein from carrying on an activity in a free zone or a free warehouse.Article 173. (1) Foreign goods located in a free zone or a free warehouse may:1. be placed under import regime pursuant to the requirements laid down for that regime and the provisions of Article 178;2. be subject to the usual operations specified in Article 114, Paragraph 1, without authorization;3. be placed under the inward processing regime pursuant to the requirements for that regime;4. be placed under the customs control processing regime pursuant to the requirements for that regime;5. be placed under the temporary import regime pursuant to the requirements for that regime;6. be abandoned in accordance with the provisions of Article 180;7. be destroyed provided the person concerned supplies the customs authorities with the required information.(2) When goods are placed under one of the regimes referred to in Paragraph 1, Items 3, 4 and 5 the control methods shall be complied with the conditions for operation of the free zones or the free warehouses and customs supervision within them.Article 174. (1) Local goods under Article 166, Item 2 may be subject to operations intended for their preservation. Such operations may be undertaken without the authorization of the customs authorities.(2) Local goods referred to in Article 166, Item 2 may be subject to operations other than the ones intended for their preservation under the control of the customs authorities provided they leave the customs territory of the Republic of Bulgaria after finishing these operations.(3) Local goods which have not made use of the measures referred to in Article 166, Item 2 may be subject to operations other than the ones intended for their preservation under the control of the customs authorities.Article 175. (1) Goods located in free zones and in free warehouses with the exception of foreign goods where Article 173 is applied and of local goods which have not made use of the measures provided for in Article 166, Item 2 shall not be used or consumed.(2) With the exception of the provisions applicable to product supplies of ships, aircraft and trains performing international transport, and to the extent allowed by the respective regime, Paragraph 1 shall not apply when goods are used or consumed which under import regime or temporary import regime are not charged with import customs duties and are not subject to trade policy measures.Article 176. (1) Any person engaging in storage, treatment or processing, or sale or purchase of goods in a free zone or a free warehouse shall keep stock records in a form approved by the customs authorities as soon as they are brought in the free zone or the free warehouse. The stock records must allow the customs authorities to identify the goods and to track their movements.(2) When goods are reloaded within a free zone or a free warehouse, the documents relating to the operation shall be kept at the disposal of the customs authorities. The short-term storage of goods in connection with such reloading shall be considered as part of the reloading.Section IVRemoval of Goods from Free Zones or Free WarehousesArticle 177. (1) In compliance with the special customs regulations goods leaving a free zone or free warehouse may be:1. exported or re-exported from the customs territory of the Republic of Bulgaria;2. brought into another part of the customs territory of the Republic of Bulgaria(2) With the exception of Articles 55 to 60 relating to local goods the provisions of Part Three shall apply also to goods brought into other parts of the customs territory of the country from free zones and free warehouses. These provisions shall not apply to goods which leave the free zone by sea or air without being placed under a transit or another customs regime.Article 178. (1) When a customs debt occurs in respect of foreign goods whose customs value is formed on the basis of a price actually paid or payable and which includes the cost of warehousing or preserving goods while they remain in the free zone or the free warehouse such costs shall not be included in the customs value provided they are shown separately from the price actually paid or payable for the goods.(2) When foreign goods have undergone usual operations in a free zone or free warehouse under the procedure of Article 114, Paragraph 1 the data on the type, quantity and customs value of the goods that are used for determining the amount of the import customs duties shall be the data that would have been applied at the moment of the occurrence of the customs debt had it not undergone the operations in question. This provision shall be applied at the request of the person reporting and provided the operations have been coordinated under the procedure in Article 114, Paragraph 2.(3) Derogations from the cases under Paragraph 1 may be determined in the Regulations.Article 179. (1) When goods are introduced or reintroduced from a free zone or a free warehouse in another part of the customs territory of the Republic of Bulgaria or when they are assigned a customs regime the certification pursuant to Article 170, Paragraph 4 may be used to prove the local or foreign status of these goods.(2) When no defined status has been determined for the goods they shall be considered as:1. local goods - for the purposes of charging export customs duties and for applying the export trade policy.2. foreign goods in all other cases.Chapter TwentyRE-EXPORTATION, DESTRUCTION, AND ABANDONMENT OF GOODS IN FAVOUR OFTHE STATE(Title supplemented - SG No. 37/2003)Article 180. (1) Foreign goods may be:1. re-exported from the customs territory of the Republic of Bulgaria;2. destroyed or abandoned in favour of the with the authorisation of the customs authorities.(2) (Amended SG No. 37/2003) The formalities for goods leaving and the trade policy measures shall apply in case of re-exportation.(3) (Amended SG No. 37/2003) The Council of Minister may specify cases where foreign goods may be placed under suspensive arrangements with a view of not applying trade policy measures in case of exportation.(4) (Amended SG No. 37/2003) The customs authorities shall be notified in advance of the re-export or the destruction. The customs authorities shall prohibit the re-export when the formalities under Paragraph 2 so require.(5) (New SG No. 37/2003) When goods are re-exported which during their stay in the customs territory of the Republic of Bulgaria have been under the customs economic regime a customs manifest shall be presented pursuant to the provisions of Articles 66 to 84 and Article 163, Paragraphs 3 and 4.(6) (Previous (4), supplemented SG No. 37/2003) The destruction and the abandonment of goods in favour of the state shall be carried out in compliance with the provisions of the Regulations. The destruction and the abandonment of goods in favour of the state shall not result in any costs for the state.(7) (Previous (5), SG No. 37/2003) Any waste or scrap resulting from the destruction of the goods shall obtain their own customs assignment as prescribed for foreign goods. It shall remain under customs supervision until the time laid down in Article 44, Paragraph 2.Article 180a. (New SG No. 37/2003) Goods that leave the customs territory of the country shall be under customs supervision. They may be subject to inspections by the customs authorities pursuant to applicable provisions. The goods must leave the customs territory of the country along the routes and in the ways specified by the competent authorities.PART FIVECUSTOMS REBATESChapter Twenty-OneEXEMPTION FROM CUSTOMS DUTYArticle 181. (1) The cases of granting exemption from customs duty both in exportation and importation of goods shall be specified in the Regulations.(2) Exemption from fees provided in other statutory instruments shall not include exemption of fees under Article 12 herein except when this is regulated expressly.(3) No exemption from customs duties shall be allowed for goods sold within the customs control zones in the border checkpoints, except for:1. the usual supplies of fuel and products for ships and aircraft;2. retail sale of goods in ports and airports after the customs control;3. retail sale of goods aboard aircraft and ships performing international transport;4. retail in specialized shops servicing the diplomatic corps.Chapter Twenty-TwoSEA-FISHING PRODUCTS AND OTHER PRODUCTS EXTRACTED FROM THE SEAArticle 182. Without prejudice to the requirements of Article 30, Paragraph 2, Item 6 the following shall be exempt from import customs duties when they are assigned import regime:1. sea-fishing products and other products extracted outside the territorial sea of the Republic of Bulgaria by vessels registered in the Republic of Bulgaria and flying its flag;2. goods obtained from products under Item 1 on board factory ships registered in the Republic of Bulgaria and flying its flag.Chapter Twenty-ThreeRETURNED GOODSArticle 183. (1) (Amended SG No. 63/2000) Local goods which, having been exported from the customs territory of Bulgaria, are returned to that territory within three years shall, at the request of the person concerned, be granted exemption from import customs duties.(2) (Amended SG No. 63/2000) The three years period may be extended by the Director of the Customs Agency or by a person authorized by him in order to take account of special circumstances.(3) (Amended SG No. 63/2000) When prior to their exportation from the customs territory of Bulgaria the returned goods had been subject to import regime at reduced or zero-rate customs duty because of their use for a specific purpose, the exemption from duty under Paragraph 1 shall be granted only if they are to be used for the same purpose. If these goods no longer have the same purpose the amount of import duties payable shall be reduced by the amount of customs duty paid on the original import. When the deduction sum is larger than the sum due for the returned goods no refund shall be allowed.(4) Exemption from importation customs duties under Paragraph 1 shall not be allowed for goods exported from the customs territory of the Republic of Bulgaria within the outward processing regime save for the cases when the goods are in the state in which they were exported.Article 184. Exemption from import customs duties under Article 183 shall be allowed for goods that are re-imported in the same state in which they were exported. Cases and circumstances in which exceptions from this provision shall be allowed may be specified in the Regulations.Article 185. (1) (Amended SG No. 63/2000) The provisions of Articles 183 and 184 shall apply, mutatis mutandis, to compensating products originally exported or re-exported subsequent to an inward processing regime.(2) The amount of import customs duty owed shall be determined pursuant to the rules applicable under the inward processing regime, the date of re-exportation of the compensating product being regarded as the date of their importation.PART SIXCUSTOMS DEBTChapter Twenty-FourSECURITY TO COVER CUSTOMS DEBTArticle 186. (1) When applying customs rules the customs authorities shall require security for customs debt to be provided; such security shall be provided by the person who is liable or who may become liable for that debt.(2) The customs authorities shall require only one security to be provided in respect of one customs debt.(3) The customs authorities may allow that the security be provided by a person other than the person that is required.(4) (Amended SG No. 63/2000) When the person who has incurred or who may incur a customs debt is a public or a local authority, the Director of the Customs Agency may exempt the said person in whole or in part of the obligation to provide security.(5) The customs authorities may waive the requirement for provision of security for insignificant sums the amount of which shall be specified in the Regulations.Article 187. (1) When customs provisions do not envisage an obligatory provision of security such security shall be required at the discretion of the customs authorities insofar as the payment of a customs debt, which has occurred or may occur is not certain within the prescribed period.(2) When the security under Paragraph 1 is not required the customs authorities may require from the person under Article 186, Paragraph 1 to undertake in writing a liability for the existing debt.(3) The security under Paragraph (1) shall be required:1. at the time of applying the provisions envisaging the possibility of requiring such security; or2. at any subsequent time when the customs authorities find that the payment of the customs debt that has occurred or may occur is not certain within the prescribed period.Article 188. At the request of the person under Article 186, Paragraph 1 or 3, the customs authorities shall be entitled to allow comprehensive security to be provided to cover two or more operations in respect of which a customs debt has occurred or may occur.Article 189. (1) (Supplemented, SG No. 37/2003) When customs provisions makes it compulsory for security to be provided the customs authorities, taking into consideration the specific provisions for the transit regime, shall determine the amount of such security at level equal to:1. the specific amount of customs debt or debts in question when that amount can be established with certainty at the time when the security is required; or to2. in the remaining cases - the maximum amount as estimated by the customs authorities of the customs debt or debts which have occurred or may occur for the rest of the cases.(2) When comprehensive security is provided for customs debts which vary in amount over time the amount of such security shall be set at a level enabling the customs debts in question to be covered at all times.(3) When customs provisions envisage that the provision of security is optional and the customs authorities require security to be provided the amount of the security shall be determined by those authorities so as not to exceed the level provided for in Paragraphs 1 and 2.(4) Under conditions and circumstances specified in the Regulations the customs authorities shall be entitled to agree with the debtor security in amounts other than the ones indicated herein.Article 190. Security may be provided by either a cash deposit or bank guarantee and in cases laid down in the Regulations by other means ensuring the payment of the customs debt.Article 191. A cash deposit shall be made in the currency and forms as provided in the legislation in force.Article 192. The customs authorities shall not be liable to pay interest upon accepted security.Article 193. (1) The bank guarantee shall be given in writing and the guarantor shall undertake to pay jointly and severally with the debtor the secured amount of a customs debt when the payment becomes executable.(2) The customs authorities shall be entitled to refuse to approve the bank guarantee proposed when it does not ensure payment of the customs debt within the prescribed period.Article 194. (1) The person that is required to provide security shall be free to choose between the types of securities laid down in Article 190.(2) The customs authorities shall be entitled to refuse to approve the type of security proposed as well as the method of its institution under a procedure specified in the Regulations when it is incompatible with the proper functioning of the customs regime concerned. The customs authorities shall be entitled to specify a period of time within which the selected method of security shall not be amended.Article 195. The customs authorities may refuse the security proposed by the debtor when it does not ensure payment of the customs debt.Article 196. When the customs authorities establish that the security provided does not guarantee or does no longer ensure the undoubted or total payment of the customs debt within the prescribed period they shall require the person referred to in Article 186, Paragraph 1 to provide additional security or to replace the original security with a new one.Article 197. (1) (Amended SG No. 63/2000) The security shall not be released until such time as the customs debt in respect of which it was provided is discharged or can no longer arise. The security shall be released immediately after the customs debt has been discharged or can no longer arise.(2) When the customs debt has been discharged in part or may not arise in respect of part of the amount that has been secured the respective part of the security shall be released at the request of the person concerned.Article 198. Derogations from the provisions in this chapter shall be admissible in order to take account of international agreements to which the Republic of Bulgaria is a party.Chapter Twenty-FiveOCCURRENCE OF A CUSTOMS DEBTArticle 199. (1) An import customs debt shall occur for goods subject to customs duties through:1. processing under the import regime;2. placing under the temporary import regime with partial exemption from import customs duties;3. unlawful introduction into the customs territory of the Republic of Bulgaria in contravention to the provisions under Articles 45 to 48;4. unlawful introduction into another part of the country's customs territory of goods located in free zones or free warehouses in contravention to the provisions set forth in of Article 177, Paragraph 1, Item 2;5. evasion from customs supervision;6. non-compliance with one of the requirements arising in case of temporary storage or of using of the customs regime;7. (amended SG No. 63/2000) non-compliance with one of the conditions governing the placing of the goods under the respective customs regime or the granting of a reduced or zero rate import duties or exemption from customs duties by virtue of the use of the goods for specific purposes;8. consumption or use in a free zone or in free warehouse under conditions other than those laid down by the legislation in force. When goods disappear and when no credible evidence is presented to the customs authorities it shall be deemed that the goods have been consumed or used in the free zone or the free warehouse;9. issue of documents necessary to grant preferential treatment in third countries to goods with Bulgarian origin when agreements concluded between the Republic of Bulgaria and these countries provide for the payment of customs duties due for the foreign goods input.(2) The provisions of Paragraph 1, Items 6 and 7 shall apply in cases other than those defined in Paragraph 5, where omissions found have brought about real consequences for the proper functioning of the temporary storage customs regime or any other customs regime.(3) An import customs debt shall occur:1. at the moment of acceptance of the customs statement under Paragraph 1, Items 1 and 2;2. at the moment of the unlawful introduction under Paragraph 1, Items 3 and 4;3. at the moment of the evasion from customs supervision under Paragraph 1, Item 5;4. at the moment when the obligation whose non-fulfilment gives rise to the customs debt ceases to be complied with under Paragraph 1, Item 6;5. at the moment of placing the goods under the respective customs regime under Paragraph 1, Item 7 of;6. at the moment when the goods are first used or consumed under conditions other than those laid down by the legislation in force, for the cases under Paragraph 1, Item 8;7. at the moment of acceptance of the export manifest for goods supplied with documents for use of preferential customs tariff treatment in the cases under Paragraph 1, Item 9;(4) Special cases of customs debt occurred which are not regulated in Paragraph 1 and the cases where no customs debt occurs shall be provided for in the Regulations.Article 200. (1) An exportation customs debt shall occur through:1. exportation from the customs territory of the Republic of Bulgaria, under cover of a customs manifest of goods subject to export duties;2. export from the customs territory of the Republic of Bulgaria of goods subject to export duties without an export manifest;3. failure to comply with the conditions for exportation outside the customs territory of the Republic of Bulgaria of goods with total or partial exemption from export duties.(2) An exportation customs debt shall occur:1. at the moment of acceptance of the export manifest under Paragraph 1, Item 1;2. at the time when the goods actually leave the territory of the country for the cases under Paragraph 1, Item 2;3. at the time when the goods reach a destination other than that for which their export was allowed with total or partial exemption from customs duties, or, should the customs authorities be unable to determine that time, the moment of expiry of the time limit set for the presentation of evidence that the conditions provided for the cases under Paragraph 1, Item 3 have been met.Article 201. (1) The customs debt referred to in Article 199, Paragraph 1 and Article 200, Paragraph 1 shall occur even if it relates to goods subject to prohibition or restriction measures on importation or exportation.(2) (Amended SG No. 30/1999) No customs debt shall occur on the unlawful introduction into the customs territory of the Republic of Bulgaria of counterfeit currency, narcotic drugs or psychotropic substances for which liability shall be provided under the Penal Code.(3) (New, SG No. 37/2003) When the customs legislation provides for favourable tariff treatment of goods due to their nature or special purpose or full or partial exemption from import or export customs duties pursuant to Articles 28, 88, 247, 282 and 183 to 185 such favourable tariff treatment or full or partial exemption from import or export customs duties shall apply to the cases of occurring import customs duty under Articles 199, 200 and 201 provided the actions of the interested person are not related to carelessness or gross negligence and the person proves that the remaining conditions for favourable tariff treatment or full or partial exemption have been met.Article 202. (1) The debtor for payment of the customs debt shall be:1. (supplemented SG No. 37/2003) the reporting person - for cases under Article 199, Paragraph 1, Items 1, 2 and 9 and Items 1 and Article 200, Paragraph 1, Items 1 and 3 of (1), and in the event of indirect representation also the person on whose behalf the customs statement has been drawn up. When the customs statement for placing under a regime has been drawn up on the basis of information that leads to partial or full failure to collect the customs duties payable the debtor for paying the customs debt shall be also the person that has provided the information required for drawing up the customs statement and who knew or should have known in view of the circumstances that the information was misleading.2. for cases under Article 199, Paragraph 1, Items 3 and 4:(a) the person or persons that introduced or participated in the unlawful introduction of the goods;(b) the person or persons that acquired or accepted the goods of which they knew or should have known under the circumstances that they were introduced unlawfully;3. for cases under Article 199, Paragraph 1, Item 5:(a) the person or persons who evaded customs supervision of the goods or participated in such evasion;(b) the person or persons who acquired or accepted goods for which they knew or should have known under the circumstances that goods had evaded customs supervision.(c) (new SG No. 63/2000, amended, SG No. 45/2005) the person responsible to fulfil the obligations ensuing from the temporary storage of the goods of from the use of the customs regime under which they had been placed;4. for cases under Article 199, Paragraph 1, Items 6 and 7 - the person or persons that failed to comply with the obligations arising from the temporary storage of the goods or from non compliance with one of the conditions of the customs regime;5. (amended, SG No. 45/2005) for cases under Article 199, Paragraph 1, Item 8 - the person who used or consumed the goods as well as any other person who has partaken therein, who knew or should have known under the circumstances that the goods were being used or consumed under conditions other than the ones laid down in the legislation in force; when the customs authorities cannot establish beyond any doubt the person who has used or consumed the goods, the person which is known to the customs authorities as the last holder of the goods shall be considered the debtor;6. for cases under Article 200, Paragraph 1, Item 2 - the person or persons that exported without an export manifest goods subject to customs duties and the person or persons who participated in such export and who knew or should have been known under the circumstances that an export manifest should have been submitted for the goods.(2) When there is more than one debtor for the same customs debt they shall be jointly and severally liable for paying such debt.Article 203. (1) Unless otherwise provided herein, the amount of import or export duties payable for certain goods shall be determined on the basis of the levy elements for those goods at the time when the customs debt in respect of them occurred.(2) Derogations from the provisions of Paragraph 1 for specific cases may be specified in the Regulations.(3) (New SG No. 63/2000) In cases specified in the Regulations when an import customs debt related to suspensive arrangement regime has occurred the debtor shall pay interest amounting to the official interest rate on the amount of the import customs duties due to the postponement of the date of occurrence or registering of the debt.Article 204. (1) A customs debt shall occur at the location where the events from which it arises occur.(2) When it is impossible to determine the location referred to in Paragraph 1 the customs debt shall be deemed to have occurred at the location where the customs authorities determine that customs duties are payable for the goods.(3) (Amended and supplemented SG No. 37/2003) When the customs regime for certain goods is not concluded and the location of the customs debt cannot be determined under the procedure of Paragraphs 1 and 2 the customs debt shall be deemed to have occurred at the location where the goods were placed under that regime.(4) (New SG No. 37/2003) When the information available allows the customs authorities to establish that the customs debt had already occurred when the goods had been in a different location at an earlier date it shall be deemed that the customs debt had occurred at the location that can be determined as the location of the goods at the earliest moment when it was possible to establish that the customs debt had occurred.(5) (Previous (4), SG No. 37/2003) Derogations from the provision of Paragraph 1 for individual specific cases may be specified in the Regulations.Chapter Twenty-SixPAYMENT OF THE CUSTOMS DEBTSection IEntry in the Records and Notification of the Amount of Duty to theDebtorArticle 205. (1) The customs authorities shall calculate the amount of customs duty resulting from a customs debt as soon as they have the necessary particulars and shall enter it in the accounting records or in any other equivalent medium which shall be entry in the records.(2) The cases where Paragraph 1 shall not apply as well as the procedures and time limits for entry in the records shall be defined in the Regulations.(3) (New SG No. 63/2000) In cases when a customs debt has occurred, with the exception of the cases under Article 199, Paragraph 1, Item 1 and Article 20, Paragraph 1, Item 1, and no data is available about the type of goods it shall be deemed that a debt has occurred:1. in the cases when there is data about a certain group of goods - for the commodity subject to the highest customs rate among all goods covered by this group;2. in the cases when there is no data about the type of goods for the commodity subject to the highest customs rate taking into account all state customs duties collectable by the customs authorities.Article 206. (1) (Supplemented, SG No. 45/2005) The debtor shall be notified in writing about the amount of the customs duty as soon as it has been entered in the records. The notification of the debtor shall be done under the procedure of Article 211.(2) When the amount of customs duty entered in the customs statement is for information purposes only and has still not been accepted by the customs authorities they shall carry out the notification only if the amount of customs duty does not correspond to the amount determined by them. When the amount of the customs duties indicated for information purposes corresponds to the amount determined by the customs authorities and in compliance with the respective provisions specified in the Regulations the authorisation for clearing the goods shall be deemed to be the notification of the debtor.(3) (New, SG No. 37/2003) The notification of the debtor shall not take place after the expiry of a period of three years from the date of which the custom debt occurred. This term shall stop running from the moment of submitting the appeal under Article 220 for the duration of the appeal proceedingsSection IaImposition of Security Measures by the Customs Authorities(New, SG No. 37/2003)Article 206a. (1) When the payment of customs duties and other state receivables collectable by the customs authorities has not been secured under the procedure of Chapter 24 the customs authorities shall be entitled to impose the following security measures:1. disitraint on movables and receivables of the debtor including in bank accounts;2. disitraint on goods in circulation;3. interdiction on real estate.(2) Security measures shall be imposed when it will be impossible or difficult without them to collect the customs duties and the state receivables collectable by the customs authorities.(3) Security measures shall be imposed in accordance with the amount of the customs duties and the other state receivables collectable by the customs authorities.(4) (Amended, SG No. 105/2005) The measures under Paragraph 1 shall not be imposed on property on which compulsory execution may not be performed without the agreement of the debtor neither on labour remunerations up to the amounts specified in the Tax and Social Insurance Procedure Code. Article 206b. (1) (Previous text of Article 206b, SG No. 45/2005) Security measures shall be imposed with an ordinance of the head of the customs office in the area where the amount of the customs debt subject to security or other state receivable has been established.(2) (New, SG No. 45/2005) The ordinance under Paragraph 1 may be appealed against under the procedure for appealing ordinances for enforced collection of public state receivables.Article 206c. (Amended, SG No. 105/2005) The provisions of Chapter 24 of the Tax and Social Insurance Procedure Code shall apply to issues not regulated herein.Section IIPayment Terms and MethodsArticle 207. Customs duties of which the notification under Article 206 has been done must be paid by the debtor within time limits specified in the Regulations.Article 208. (1) Payment shall be made in a cash desk at the customs office or through non-cash payment.(2) At the request of the debtor the payment may be made through deduction by the customs authorities of unduly collected from him sums for customs duties.Article 209. (1) The customs authorities may, at the debtor's request, grant deferment of payment of the customs duties under conditions and time limits specified in the Regulations.(2) The deferment of payment shall be authorised after the provision of security for the customs duties by the debtor.(3) For additional services performed in relation to authorising deferment of payment the customs authorities shall collect additional fees for expenses made.Article 210. Customs duties owed may be paid by a person other than the debtor.Article 211. (1) When the amount of customs duty has not been paid within the prescribed term the customs authorities:1. (amended, SG No. 63/2000) shall avail themselves of all options for ensuring payment open to them under the provisions of this Act and of other statutory instruments including issuance of administrative acts on enforced collection;2. (amended, SG No. 63/2000) collect legal interest on the amount of duty.(2) (Amended, SG No. 63/2000) Under the procedure of Paragraph 1 together with the legal interest rate the payment of other state receivables collectable by the customs authorities shall be secured when these are not paid within the specified time limits.Section III(New, SG No. 63/2000)Warrants for Enforced Collection of Public State ReceivablesIssued by the Customs AuthoritiesArticle 211a. The warrants for enforcing the collection of public state receivables shall be individual administrative acts issued by the head of the customs office on the territory of which the debt has occurred with which customs duties and other public receivables that have not been paid on time are established.Article 211b. (Amended SG No. 63/2000, SG No. 110/2001, SG No. 105/2005) The warrant shall be issued in four original copies: for the debtor, for the customs office, for the competent territorial directorate of the National Revenue Agency and for the State Revenue Agency.Article 211c. The warrant shall be issued in writing and it shall contain:1. the name of the body issuing it;2. name and number;3. factual and legal grounds for its issuing;4. data about the debtor;5. the amounts of the customs duties due and of the other public receivables;6. the date on which the public receivables have occurred;7. (repealed SG No. 37/2003);8. possible measures for its securing or preliminary execution;9. the institution before which an appeal can be submitted, and within what time;10. the date of issue and the signature of the respective head of customs office.(2) (Amended, SG No. 45/2005) The warrant shall be sent by the head of the customs office with advice of delivery to the State Revenue Agency for enforced execution save for the cases under Article 211f, Paragraph 2.(3) (New, SG No. 45/2005) The receipt of the warrant that is subject to execution shall be confirmed in writing by the public executive officer before the customs office, which shall monitor the arrival at the account of the customs duties sums and other state receivables.Article 211d. (Amended, SG No. 45/2005) (1) The delivery of the warrant to natural persons shall be certified by the signature of the person or his/her agent. When the delivering officer does not find the person he/she shall deliver the warrant to an adult member of the family if he/she agrees to deliver it. The person through which the delivery takes place shall sign a receipt and his/her full name, personal registration number and the capacity in which he/she is receiving the warrant shall be noted as well as the obligation to hand it over.(2) The delivery of the warrant to legal persons shall be certified by the signature of the official who has received the warrant and his/her full name, personal registration number and the position of the recipient shall be noted.(3) The delivery of the warrant at the place of work shall be done through an official of the administration. The delivery shall be in order if the full name, the personal registration number and the position of the recipient are specified.(4) The delivery officer shall certify with his/her signature the date and the way of delivery. Refusal to accept the warrant shall be certified by the signature of the delivery officer and at least one witness and the delivery officer shall make a note in the receipt of his/her full name, personal registration number and address. In this case the delivery of the warrant shall be deemed to be in order.(5) When no witness can be ensured the warrant shall be sent with advice of delivery. A warrant sent by mail with advice of delivery shall be deemed to have been legally delivered on the date the return receipt was signed or on the date of the rejection of the warrant delivery, and this rejection shall be certified by the postal officer. In case the person fails to appear and certifies receipt within the time limit specified in the postal notice the warrant and the post office documents shall be attached to the file and the warrant delivery shall be deemed in order.(6) Natural persons against whom proceeding have been instituted of which they have been notified and who reside abroad for more than 30 consecutive days shall be obliged to name a person on the territory of the country who shall represent them before the customs authorities and to whom notices and other acts of the customs administration shall be delivered.(7) The delivery of the warrant to persons who have been convicted to imprisonment and to persons who are in custody shall be done by the administration of the respective institutions.(8) The delivery of the warrant to regular servicemen in the armed forces shall be done through the commander of the respective unit.(9) Delivery of the warrant through enclosing in the file shall be done after the expiry of 14 days after placing a notice for the person to appear when:1. the person's address is unknown;2. the person, his/her agent or proxy cannot be found at the registered address or at the permanent address after a thorough and documented search by the customs authorities.(10) The notice under Paragraph 9 shall be placed at a place designed for this purpose in the respective customs office where the warrant is issued. The notice shall be published on the Web on the respective site of the customs administration.(11) The circumstances under Paragraph 9, Item 1 shall be certified with the file and under Paragraph 9, Item 2 - with a post office document or with the signature of the delivery officer and at least one witness and the delivery officer shall record his/her full name, personal registration number and address and shall make a note thereof in the receipt.(12) In case the person fails to appear before the expiry of the deadline under Paragraph 9 the warrant shall be attached to the file and the delivery shall be deemed in order.Article 211e. (Amended, SG No. 45/2005) When, after the warrant has been issued, the debtor pays the customs duties and the other state receivables or part thereof the head of the customs office shall notify thereof the public executive officer.Article 211f. The warrant may be appealed through the head of the customs authority who had issued it before the Director of the respective Regional Customs Directorate within fourteen days after it had been delivered to the debtor.Article 211g (1) The appeal of the warrant shall not stop its execution.(2) The execution of the warrant shall be suspended at the request of the debtor provided the latter presents security equal to the amount of the principal and the interest. The security may be a cash deposit or a bank guarantee.(3) The request for suspension of the execution shall be made simultaneously with the filing of the appeal supported by evidence of the security submitted.(4) The official interest rate on the principal shall be owed for the duration of the suspension.(5) (New, SG No. 45/2005) Paragraph 1 shall not apply in cases when liabilities are established by a warrant for enforced collection of public state receivables ensuing from the implementation of an international convention which the Republic of Bulgaria has joined and the debtors are the warranting organizations determined with an act of the Council of Ministers.Article 211h. The head of the customs authority through which the appeal has been filed shall be obliged to forward it not later than seven days after its receipt together with his opinion and all relevant documents to the Director of the respective Regional Customs Directorate on the territory of which the customs office in question is located. When a request for suspension of the warrant has been filed it shall also be attached together with the relevant proof. If an appeal submitted on time has been incorrectly addressed it shall be forwarded to the respective competent authority through official channels if the prescribed time limit is considered to have been observed.Article 211i. (1) The Director of the Regional Customs Directorate shall examine the appeal in substance and shall evaluate all circumstances related to the warrant.(2) The Director shall announce a substantiated decision within thirty days from receiving the appeal with which he shall confirm or revoke the warrant entirely or partially and in his substantiation he shall present the positions of the parties concerned and the grounds for his decision. He shall also express his position on the request to suspend the execution of the warrant in the cases when such a request had been filed.(3) In case the warrant issued proves to be contrary to the law another one shall be issued in its place, the Director of the Regional Customs Directorate shall revoke the appealed warrant and shall return the file with mandatory instructions to the respective head of customs office.(4) The decision shall be issued in four original copies: for the debtor, for the customs office, for the Regional Customs Directorate and for the State Revenue Agency and shall be sent to them not later than seven days after the expiry of the term under Paragraph 2.(5) (Amended, SG No. 45/2005, SG No. 30/2006, effective 1.03.2007) The warrant confirmed with a decision of the Director of the Regional Customs Directorate may be appealed before the relevant administrative court within fourteen days after receipt of the decision under Paragraph 4. The appeal shall be submitted through the respective head of the customs office.(6) The warrant may not be appealed in court in its part which had not been appealed by administrative procedure or in its part in which the appeal had been entirely or partially sustained.Article 211j. (1) (Amended, SG No. 105/2005, SG No. 59/2007) The provisions of Chapter 17 and 19 of the Tax and Social Insurance Procedure Code shall apply to legal appeal proceedings and to cassation proceedings and revoking of effective decisions may be requested by the persons concerned under the terms and procedures stipulated in article 303 of the Code of Civil Procedure. (2) (Amended, SG No. 105/2005) When the appeals are considered in court subpoenas shall be sent to the body which has issued the appealed act, to the appellant and to the National Revenue Agency in the cases when the latter is an interested party.Article 211k. The warrant shall enter into force when:1. it has not been appealed within the stipulated period before the respective Director of Regional Customs Directorate;2. it has been appealed within the stipulated period before the Director of the Regional Customs Directorate who has not sustained the appeal and the warrant has not been appealed in court within the stipulated period;3. it has been confirmed by the court.Article 211l. (Repealed, SG No. 45/2005) Chapter Twenty-SevenEXTINCTION OF CUSTOMS DEBTArticle 212. (1) A customs debt shall become extinct:1. by payment of the amount of the customs duty;2. by remission of the amount of the customs duty;3. when in respect of goods reported for a customs regime entailing the obligation to pay duties:(a) the customs statement has been invalidated;(b) (amended SG No. 153/1998) the goods, before their release, are either seized and simultaneously or subsequently confiscated; destroyed on the instructions of the customs authorities; destroyed or abandoned in accordance with Article 180; or destroyed or irrevocably lost as a result of their nature or of force majeure or unforeseeable circumstances;4. when goods in respect of which a customs debt occurred in accordance with Article 199, Paragraph 1, Items 3 and 4 are seized upon their unlawful introduction and are simultaneously or subsequently confiscated.(2) (Amended SG No. 63/2000) The right to collect customs duties shall be deemed extinct with the expiry of five years as of January 1st of the year subsequent to the year in which the customs debts and the other public state receivables occurred established by a warrant for enforced collection.(3) The provision of Paragraph 1 shall not apply in cases of judicial proceeding in court for the debtor's bankruptcy.Article 212a. (New, SG No. 45/2005) A customs debt that has arisen on the grounds of Article 199, Paragraph 1, Item 9 shall become extinct when the formalities performed for allowing preferential tariff treatment are revoked.Article 213. The ways of discharging customs debt occurring in specific cases shall be determined in the Regulations.Chapter Twenty-EightREIMBURSEMENT AND REMISSION OF CUSTOMS DUTYArticle 214. (1) Reimbursement of customs duties shall be the total or partial refund of import or export duties, which have been paid.(2) Reimbursement shall be made when it is established that at the time of payment the customs duties were not owed or the grounds for their payment were no longer valid.Article 215. (1) Remission of customs duties shall mean:(a) a decision to waive entirely or partially the collection of import or export customs duties; or(b) a decision to cancel entirely or partially the recording of the amount of export or import duty which has not been paid.(2) Remission of customs duties shall be made when it is established that they were placed in the records without being owed or that the grounds for their entry into the records was no longer valid.Article 216. (1) No reimbursement or remission shall be authorised when the actions which led to the payment or the entry in the records of customs duties that were not legally owed were the result of unconscientious behaviour of the person concerned.(2) Reimbursement or remission of import or export duties shall be authorised repaid or remitted upon an application in writing to the appropriate customs authority within a period of three years from the date on which the amount of those duties was communicated to the debtor.(3) (New, SG No. 45/2005) The term under Paragraph 2 may be extended if the interested person provides evidence that he/she was prevented from submitting such an application due to unforeseen circumstances or force majeure.Article 216a. (New, SG No. 45/2005) Reimbursement of import or export customs duties shall be done in case the customs declaration is cancelled and the custom duties have been paid. Reimbursement shall be allowed after a written application submitted within the time limit for submitting applications for cancelling customs declarations.Article 217. The Regulations may define specific cases and conditions other than those referred to in the previous articles allowing reimbursement or remission of import or export duties.Article 218. The Regulations may define the minimum amount of export or import duties below which reimbursement or remission of such duties shall not be allowed.Article 219. When, due to errors, the customs debt has been remitted or the amount of the respective customs duties has been reimbursed the initial debt shall become executable anew.Article 219a. (New SG No. 37/2003) For reimbursed customs duties no shall be due. In the cases when the customs duties have been determined by an act of the customs authorities that is in contravention to the law the paid sums that were nit due shall be refunded with the legal interest.PART SEVENAPPEAL OF DECISIONSArticle 220. Any person shall have the right to appeal against decisions of the customs authorities concerning him under the procedure of the Administrative Procedure Code.Article 221. When the decision appealed against is related to levying import or export duties suspension of the execution shall be subject to security on their amount.Article 222. The provisions in Part Seven shall not apply to cases related to repealing or amending acts issued by the customs authorities on the basis of the administrative and penal provisions herein.PART EIGHTADMINISTRATIVE PENAL PROVISIONSChapter Twenty-NineGENERAL PROVISIONSArticle 223. The customs authorities shall examine, establish and sanction each violation or attempt at violation of the provisions of the customs legislation insofar as the action is not a criminal offence.Article 224. The actions representing customs violations, the sanctions imposed for them and the liability related to them shall be specified herein.Article 225. (1) The establishment of violations, the issue of penal ordinances and the appeals thereof shall follow the procedure established by the Administrative Violations and Sanctions Act. (2) The execution of penal ordinances that have come into force and rulings of the court shall take place under the procedure of the Administrative Violations and Sanctions unless otherwise provided herein.Article 226. (1) (Amended SG No. 63/2000, SG No. 37/2003) Persons having perpetrated a customs violation within the customs territory of the Republic of Bulgaria as well as persons who instigate, assist, conceal or allow such a violation shall be liable under the existing administrative and penal provisions.(2) (Amended, SG No. 63/2000) The persons under Paragraph 1 shall be jointly liable for customs duties and other public state receivables incurred as a result of the violation with the exception of the sanction of fine.(3) (Repealed, SG No. 37/2003)(4) (Repealed, SG No. 37/2003)Article 226a. (New SG No. 37/2003) (1) The customs authorities shall decree seizure in favour of the state of the goods that are the object of the customs violation as well as the vehicles and the carriers used for the transportation or the carrying of the goods in the cases when such a measure is provided for in this or another act except for the cases under Article 229b, Paragraph 1, Item 3.(2) Before the conclusion of the administrative proceedings the customs authorities shall be entitled to dispose with the perishable goods under the procedure of Article 239 as well as with the goods the preservation of which results in significant costs for the customs administration.(3) When seizure in favour of the state is not possible or in the cases under Paragraph 2 the persons under Article 226, Paragraph 2 shall pay jointly a sum equal to the customs value of the object of the violation as well as the vehicles and other carriers used for transporting or carrying the goods.Chapter ThirtyADMINISTRATIVE SANCTIONSArticle 227. (1) In cases of customs violations the following sanctions shall apply:1. fine;2. temporary prohibition to engage in exportation and importation operations for legal persons or sole traders;3. (amended, SG No. 45/2005) pecuniary penalty for legal persons or sole traders.(2) The prohibition to engage in exportation and importation operations shall be a temporary prohibition for the violator to engage in such activity for a period from six months to two years. The sanction shall be imposed when the customs contraband is aggravated or in cases of repeated violations under this Act.Article 228. The customs authorities may, when minor violations of the customs legislation are established, impose fines on the spot under a procedure and in the amount provided for in Article 39 of the Administrative Violations and Sanctions Act. Article 229. (1) The customs authorities shall be entitled to seize and retain under their control the goods that are the object of customs violations, including vehicles and other means used for their concealment, importation to or exportation from the country as well as material evidence necessary or related to the investigation proceedings as well as goods and cash for securing possible receivables under the penal ordinance.(2) (Amended SG No. 63/2000) Goods seized and retained under the control of the customs authorities shall be kept by the customs office until the conclusion of the administrative penal and the criminal proceedings(3) (New SG No. 63/2000) The customs authorities shall retain and keep under customs supervision the goods which are object or means, or evidence of committed criminal offence until the completion of the customs formalities in respect of them in conformity with effective legislation.(4) (Amended SG No. 30/1999, previous (3), SG No. 63/2000) The provisions of the Narcotic Substances and Precursors Control Act shall apply to confiscated narcotic drugs.(5) (Previous (4), SG No. 63/2000) The customs authorities shall immediately deliver to the authorities of the Ministry of the Interior any confiscated firearms, ammunition and explosives.(6) (Previous (5), SG No. 63/2000) When the goods that are the object of customs violations are not seized in favour of the state, including when awarding their equivalent value, the customs duties and the other public state receivables for them shall be owed without exception.(7) (New SG No. 37/2003) The customs authorities shall be entitled to impose the measures under Chapter 26, Section Ia on securing receivables under an act drawn up on establishing a customs violation.Article 229a. (New SG No. 37/2003, amended, SG No. 105/2006) Until the issuing of the penal ordinance but not later than 30 days after drawing up the act on establishing a customs violation agreement may be reached between the administrative sanctioning authority and the violator on terminating the administrative penal proceedings for violations under Article 233, Paragraph 1 and 2 and 3, Article 234 and Article 234a except for the cases when the act is a criminal offence.Article 229b. (New SG No. 37/2003; effective 1.07.2003) (1) The agreement shall be drawn up in writing and shall reflect the agreement of the administrative sanctioning authority and the violator on the following issues:1. has an act been perpetrated, has it been perpetrated by the violator, has it been perpetrated by premeditation, does the act constitute a customs violation;2. what will the type and size of the sanction be;3. (amended, SG No. 45/2005) will the goods that are the object of the violation be confiscated in favour of the state as well as the vehicles and carriers used for their transport or carriage or shall they be paid for in an amount at least 25 percent of their equivalent value.(2) The agreement shall not specify:1. a sanction other than the one provided for in the act for the specific customs violation;2. an amount of the fine or pecuniary sanction lower than the minimum provided for the specific customs violation;3. (amended, SG No. 45/2005) a sum amounting to less than 25 percent of the cash equivalent of the object of the violation as well as of the cash equivalent of the vehicle or carrier representing their customs value.(3) The agreement shall be signed by the administrative sanctioning authority and by the violator or his agent authorized expressly for reaching agreement.(4) Within fourteen days after the signing of the agreement on terminating the administrative penal proceedings the Director of the Customs Agency or a person authorised by him shall issue a decision approving or refusing to approve the agreement. Decisions with which agreements on terminating the administrative penal proceedings are approved shall be sent to the respective public prosecutor within seven days after their issuing.(5) The agreement on terminating the administrative penal proceedings shall be approved on condition that the requirements of the law have been complied with and the specified in it public state receivables have been paid or have been secured in the deposit account of the respective customs authority.(6) The decision under Paragraph 4 shall not be subject to appeal save for a decision approving an agreement on terminating the administrative penal proceedings against which the public prosecutor may file an objection in court in relation to its conformity with the law under the procedure of the Administrative Procedure Code. In this case the Prosecutor's objection shall not stop the execution of the decision.(7) The terms for issuing a penal ordinance shall stop running as of the moment of instituting judicial proceedings on a prosecutor's objection until their conclusion.(8) In the cases when the agreement on terminating the administrative penal proceedings is not approved or the decision with which it is approved is rescinded by the court the administrative sanctioning authority shall issue a penal ordinance without exception.Article 229c. (New SG No. 37/2003; effective 1.07.2003, amended, SG No. 105/2005) The agreement on terminating the administrative penal proceedings shall enter into force on the date of its approval. The agreement shall have the consequences of a penal ordinance that has entered into force and shall be subject to compulsory execution under the Tax and Social Insurance Procedure Code. Chapter Thirty-OneCUSTOMS REGIME VIOLATIONS PROCEEDINGSArticle 230. The customs authorities shall issue an act in all cases of customs regime violations.Article 231. (Amended SG No. 63/2000) Penal ordinances shall be issued by the Director of the Customs Agency or by officials appointed by him.Article 232. (1) (New SG No. 63/2000, SG No. 37/2003) When the perpetrator is unknown the act shall be signed by the person who has drafted it and by one witness and shall not be served. In that case a penal ordinance shall be issued which shall enter into force at the moment of its issuing.(2) (Previous Article 232, amended SG No. 63/2000) When the perpetrator is a known person not found at the address shown at the time of serving the administrative violation act or has left the country or has indicated only an address abroad the penalty decree shall not be served. The decree shall be deemed to have become effective two months after the date of issuing it.Chapter Thirty-TwoCUSTOMS VIOLATIONS AND DEFINING ADMINISTRATIVE SANCTIONSArticle 233. (1) (Amended, SG No. 45/2005) Any person who carries or transports goods through the state border or any person who attempts to do so without the knowledge and authorisation of the customs authorities, insofar as the said act is not a criminal offence, shall be sanctioned for customs contraband with a fine amounting between 100 and 200 per cent on the goods' customs value.(2) (New, SG No. 105/2006) For customs smuggling shall be sanctioned any one, who carries or transports goods through the external border of the European Union without the knowledge and the permission of the customs authorities and the goods has been discovered as a result of a check on the territory of Republic of Bulgaria.(3)(Amended, SG No. 45/2005, renumbered from Paragraph 2, SG No. 105/2006) When the object of customs contraband are goods for which excise duty is due or which are prohibited for exportation and importation the fine shall be between 150 and 250 per cent of the customs value of the goods.(4) (Renumbered from Paragraph 3, SG No. 105/2006) The goods that are the object of customs contraband shall be confiscated in favour of the state regardless of who their owner is and if they are missing or have been alienated their equivalent value shall be awarded constituting their customs value.(5) (Renumbered from Paragraph 4, SG No. 105/2006) The goods referred to in Paragraph 3 shall be confiscated in all cases even where the stipulator is unknown.(6) (Renumbered from Paragraph 5, SG No. 105/2006) Vehicles and movable used for transportation of goods that are the object to customs contraband shall be confiscated, regardless of who the owner is, except if their value apparently does not correspond to the value of the object of customs contraband.Article 234. (Amended, SG No. 63/2000, No. 37/2003, No. 45/2005) (1) Any person who evades or attempts to evade:1. complete or partial payment or securing of customs duties or of other public state receivables collectable by the customs authorities, or2. prohibitions or restrictions on the importation and exportation of goods or the enforcement of trade policy measures shall be sanctioned for customs fraud.(2) For customs fraud the sanction shall be fine - for natural persons or pecuniary sanction for legal persons and sole traders from 100 to 200 percent of:1. the amount of the evaded state public receivables - for a violation under Paragraph 1. Item 1;2. the customs value of the goods that are the object of the violation under Paragraph 1, Item 2;(3) When the object of the customs fraud are goods for which excise duties are owed the sanction shall be fine - for natural persons or a pecuniary sanction - for legal persons and sole traders from 150 to 250 percent of:1. the amount of the evaded public state receivables - for a violation under Paragraph 1, Item 1;2. the customs value of the goods that are the object of the violation under Paragraph 1, Item 2.(4) (Amended, SG No. 105/2006) The provisions of Article 233, Paragraphs 4 and 5 respectively shall apply in the cases under Paragraphs 1 and 3.Article 234a. (New SG No. 63/2000, amended, SG No. 45/2005) (1) Any person who deflects temporarily stored goods or goods subject to customs regime or customs assignment by failing to meet the conditions stipulated in the statutory instruments or determined by the customs authorities shall be sanctioned with a fine - for natural persons or a pecuniary sanction - for legal persons and sole traders from 100 to 200 per cent of the customs value of the goods that are the object of the violation.(2) When the object of the violation under Paragraph 1 are goods for which excise duty is owed the sanction shall be fine - for natural persons or a pecuniary sanction - for legal persons and sole traders from 150 to 250 per cent of the customs value of the goods that are the object of the violation.(3) (Amended, SG No. 105/2006) The provisions of Article 233, Paragraphs 4, 5 and 6 accordingly, shall apply in the cases under Paragraphs 1 and 2.Article 235. (1) (Supplemented, SG No. 63/2000, SG No. 45/2005) Any person who sells, buys or attempts to sell or buy, who gives or accepts as gift, for safekeeping, use, lease or pledge goods which he knows or should reasonably have known to have been imported in violation of the customs legislation or in violation or restrictions and conditions under the norms and regulations concerning goods imported duty free, or goods imported with reduced or zero-rate customs duties on account of their special purpose shall be sanctioned with a fine - for natural persons or a pecuniary sanction - for legal persons and sole traders - up to BGN 1,000.(2) When the disposal under Paragraph 1 is done with goods that are objects of customs violations referred to in Articles 233 and 234 the goods in question shall be confiscated.(3) The sanctions imposed shall not exempt such persons from payment of the customs duties due or other state receivables collectable by the customs authorities save for the cases referred to in Paragraph 2.Article 236. The sanction referred to in Paragraph 1 shall apply to persons who do not comply with their obligations pursuant to Article 235, Paragraph 1 herein.Article 237. If goods which by virtue of their nature or their quantity do not have commercial character and are required to be reported are not reported by travellers crossing the state border and are discovered at the usual places during a customs inspection the goods shall be confiscated in favour of the state regardless of whose property they are without the imposition of a fine.Article 238. (1) (Supplemented, SG No. 45/2005) Any violation of statutory instruments applicable to goods under customs supervision established by the customs authorities shall be punishable by the fine or the pecuniary sanction pursuant to Article 235, Paragraph 1 unless otherwise provided.(2) The same sanction shall apply to any person who is resisting the customs authorities performing their duties or who is liable under the provisions herein to present to the customs authorities goods, documents or information, but refuses this.Article 238a. (New SG No. 63/2000, supplemented SG No. 45/2005 ) Any person, who fails to meet the deadlines stipulated in the statutory instruments or determined by the customs authorities shall be sanctioned by a fine - for natural persons or a pecuniary sanction - for legal persons and sole traders - up to BGN 2,000.Article 238b. (New, SG No. 45/2005) A person who fails to comply with an obligation under Article 10, Paragraph 5 shall be sanctioned by a fine of up to BGN 1000.PART NINEDISPOSAL OF GOODS SEIZED OR ABANDONED IN FAVOUR OF THE STATE ANDDISTRIBUTION OF THE PROCEEDSArticle 239. The customs authorities shall dispose of goods seized or abandoned in favour of the state under terms and procedures laid down in the Regulations.Article 240. (1) From the sums received from the sale of goods abandoned or seized in favour of the state the expenses made by the customs authorities for their tracking, transportation and storage shall be deducted, as well as the expenses incurred for their valuation and sale.(2) (Amended SG No. 83/1999) After deducting the expenses made the sums under Paragraph 1 and the sums equal to the value of the goods confiscated, missing or confiscated at a previous stage shall be deposited as revenues pursuant to Article 14.SUPPLEMENTARY PROVISION 1. Within the meaning herein:1. "Release of goods" shall be the clearance by the customs authorities of goods for the purposes stipulated by the customs regime under which they are placed.2. "Import customs duties" shall be customs duties and charges having an equivalent effect payable on the importation of goods.3. " Report" shall be the act whereby a person indicates in the prescribed form and manner a wish to place goods under a given customs regime.4. "Export customs duties" shall be customs duties and charges having an equivalent effect to customs duties payable on the exportation of goods.5. (Amended SG No. 153/1998) "Local person " shall be any natural person with a permanent residence in the Republic of Bulgaria; as well as any legal person that has its registered office in the Republic of Bulgaria according to the Bulgarian legislation.6. "Local goods" shall be:(a) goods wholly obtained or produced in the customs territory of the Republic of Bulgaria under the conditions referred to in Article 30 and not incorporating goods imported from other countries. The Regulations may specify cases when goods produced from goods under the deferred payment regime shall not be considered local goods;(b) goods imported under the established procedure to the territory of the Republic of Bulgaria and released for importation;(c) goods produced within the customs territory of the Republic of Bulgaria either only from goods referred to in letter "b" or from goods referred to in letter "a" and "b".7. "Customs debt" shall be the liability of a person to pay the import customs duties - import customs debt, or export customs duties - export customs debt which apply to specific goods under the legislation in force.8. "Customs assignment of goods" shall be:(a) placing goods under a customs regime;(b) entry of goods into a free zone or free warehouse;(c) re-exportation of goods from the customs territory of the Republic of Bulgaria;(d) destruction of goods;(e) abandonment of goods in favour of the state.9. "Customs authorities" shall be the officials in the Customs offices exercising customs supervision and control.10. "Customs regime" shall be:(a) importation;(b) transit;(c) customs warehousing;(d) inward processing;(e) processing under customs control;(f) temporary import;(g) outward processing;(h) exportation;(i) temporary exportation.11. "Customs status" shall be the status of goods for the purposes of customs control as local or foreign goods.12. "Presentation of goods to the customs authorities" shall be the notification of the customs authorities, in the manner laid down, of the arrival of goods at the customs office or at any other place designated or approved by them.13. "Decision" shall be any administrative act pertaining to the application of customs regulations issued by the customs authorities on a particular case which is related to legal consequences for one or more specific or identifiable persons. This definition shall include also the binding information under Article 23.14. "Goods" shall be all types of objects carried through the state border, including through pipelines and electric power lines, as well as vehicles, travellers luggage and other parcels;15. "Holder of authorization" shall mean the person to whom an authorization has been issued.16. (Amended SG No. 63/2000) "Holder of regime" shall be the person on whose behalf the reporting was made, or the person to whom the rights and obligations of the aforementioned person in respect of a customs regime have been transferred.17. "Foreign goods" shall be goods other than local goods. Local goods shall lose their customs status when they leave the customs territory of the Republic of Bulgaria.18. "Tariff quota" shall be the quantity of goods defined in a value or physical units, for which for a defined period reduced rate of customs duty shall apply, whereas as the quantity is exhausted the rate under the customs tariff shall be restored.19. "Tariff ceiling" shall be the quantity of goods defined in a value or physical units, for which a reduced rate of customs duty shall apply, whereas as this quantity is exceeded the rate of duty under the customs tariff may be restored as provided in the act on its introduction.20. "Charges for additional services provided" shall be fees pursuant to the principles in Article VIII of the General Agreement on Tariffs and Trade and related to activities such as: issue of licenses, statistical services, foreign exchange control, issue of documents and certifying, analysis and inspection, as well as customs activity outside the working place and working hours.21. (New SG No. 30/1999) "Controlled delivery" shall mean the methods by which exportation from, transit through or importation to the territory of a country or several countries is allowed of illegally sent or suspected of being illegally sent narcotic substances and precursors and their analogues or substances that substitute them with the knowledge and under the control of the competent authorities of these countries with the purpose of discovering the persons engaging in illegal trafficking.22. (Previous Item 21 - SG No. 30/1999) "Customs territory of the Republic of Bulgaria" shall be the territory of the Republic of Bulgaria.23. (New, SG No. 153/1998, previous Item 22 - SG No. 30/1999, amended, SG No. 63/2000) "Reporting person" shall be the person performing the act of reporting on his own behalf, or the person on whose behalf the reporting is performed.24. (New SG No. 63/2000) "Official secret" shall be:(a) the specific individualized data entered in the customs statements and in the enclosed documents with the exception of the data included in the public registers;(b) the data from trade contracts, including data on the amount and mode of payment;(c) other specific individualized data obtained or collected in the course of performing customs supervision and control or of other actions provided for herein.25. (New SG No. 63/2000) "Customs authorities" shall be:(a) the Central Customs Directorate;(b) the regional customs directorates;(c) the territorial customs directorates;(d) the customs offices;(e) the customs posts.26. (New SG No. 37/2003) "Agreement on the Rules of Origin", "General Agreement on Tariffs and Trade of 1994" and "Agreement on the Application of Article VII of the General Agreement on Tariffs and Trade" shall be multilateral agreements on the trade with goods from Annex 1A to the Marrakech Agreement establishing the World Trade Organisation (Annex to the Protocol on the accession of the Republic of Bulgaria to the Marrakech Agreement establishing the World Trade Organisation (SG No. 67/2002).27. (New SG No. 37/2003) "List of the Obligations and Concessions Annexed to the General Agreement on Tariffs and Trade of 1994" shall be the list relating to the Republic of Bulgaria to the Protocol on the accession of the Republic of Bulgaria to the Marrakech Agreement establishing the World Trade Organisation (Addition to the Protocol on the accession of the Republic of Bulgaria to the Marrakech Agreement establishing the World Trade Organisation, (SG No. 67/2002).28. (New SG No. 37/2003) "Combined Nomenclature of the Republic of Bulgaria" shall be the nomenclature of goods used for the purposes of levying customs duties and the application of non-tariff measures of trade, agricultural, customs and other policies related to importation and exportation as well as for statistic accounting of the importation and exportation of goods.29. (New SG No. 37/2003) "Combined Nomenclature applied in the member countries of the European Union" shall be the nomenclature of goods introduced with a Regulation of the Council of the European Communities used for the common customs tariff of the European Communities, of foreign trade statistics and the other community policies related to importation and exportation of goods.30. (New SG No. 37/2003) "Harmonised Commodity Description and Coding System" shall be a nomenclature of goods based on the Convention on the Harmonised Commodity Description and Coding System of 1983 signed in Brussels within the framework of the World Trade Organisation.31. (New SG No. 37/2003) "Customs intelligence" shall be the collection, processing, verification and analysis of information by the customs authorities for combating customs and foreign exchange violations and offences.32. (New, SG No. 45/2005) "Trade policy measures" shall be non-tariff measures introduced as part of the trade policy of the Republic of Bulgaria with statutory instruments regulating the import and export of goods such as monitoring or protection measures, qualitative restrictions or limits as well as import and export prohibitions.TRANSITIONAL AND FINAL PROVISIONS 2. The Excise Tax Act (promulgated in the State Gazette No. 19/1994; Amended and supplemented in Nos. 58 and 70/1995, Nos. 21, 56 and 107/1996 and No. 51/1997) shall be Amended and supplemented as follows:1. Article 5 shall be amended as follows:(a) in Paragraph 4, the words "temporary importation regime" shall be substituted by "customs regime with suspensive arrangements, except for transit";(b) paragraph shall be repealed.2. In 2 of the Supplementary Provisions, Items 7 and 8 shall be added:"7. "Enterposed warehouse" shall be a customs warehouse opened and managed under the procedure of Articles 104 to 117 of the Customs Act; 8. "Duty-free zones" shall mean free zones and free warehouses opened and managed under the procedure of Articles 166 to 179 of the Customs Act. " 3. The Value Added Tax Act (promulgated in the State Gazette No. 90/1993; amended and supplemented in No. 57/1995, Nos. 16, 56 and 104/1996 and Nos. 51, 86 and 111/1997) shall be amended and supplemented as follows:1. Article 23 shall be amended as follows:"Article 23. (1) No tax shall be due for import of goods when:"1. the goods enter free zones, entreposed warehouses or duty-free trade outlets;2. valuable metals are imported intended for the Bulgarian National Bank;3. an act of parliament or an international agreement ratified and promulgated as provided in the legislation in force, provide for exemption of the import of goods from taxes, fees or other receivables (payments, taxation) with an effect equivalent to indirect tax;4. grants for humanitarian purposes are imported and placed at the disposal of the State or the municipalities by foreign countries, municipalities, legal or natural persons and organizations;5. grants are imported provided to academic or medical establishments, scientific, cultural, educational and social organizations; ministries, institutions and other state authorities; the Bulgarian Red Cross, the Agency for Foreign Aid;6. information carriers are imported related to the participation of the Republic of Bulgaria in the international exchange of publications, when they are exempt from duties and charges;7. armaments, equipment and machinery are imported for the purposes of the Ministry of Defence, the Ministry of the Interior and other authorities of the national security system, the importation of which has been authorised under the established procedures;8. no duties and charges shall be levied on goods imported by travellers within the allowed duty free import, as well as on international parcels and other postal deliveries to natural persons, with the exception of sole traders, save for motor vehicles;9. nuclear fuel is imported;10. auxiliary technical equipment and devices for disabled persons, including spare parts for them, including cars imported by disabled persons of first category or by persons of six or more years of age and suffering from a condition or disability listed in list approved by the Minister of Health, the Minister of Labour and Social Policy and the Minister of Finance. The exemption from VAT of the import of cars shall follow the provisions of legislation in force for exemption of customs duty and amounting to the Bulgarian currency equivalent of up to USD 900 inclusive. Pursuant to this provision should a car may be imported for a period of three years when it is a second hand car and of five years when it is a new car;11. life-saving and life-supporting medicines, consumables and medical equipment are imported under centralized deliveries for the Ministry of Health or deliveries for state or municipal hospitals according to a list approved by the Minister of Health and the Minister of Finance.(2) No tax shall be collected when the goods are placed under the customs regime with suspensive arrangements, including temporary importation and re-exportation. The tax assessed in these cases shall be secured for payment of customs duties pursuant to the amount and under procedures specified in the Customs Act and the Regulations for its application."2. The following amendments and supplements shall be made to the Supplementary Provisions:a) Paragraph 5c shall be amended as follows: 5c. "Duty-free zones" shall be the free zones and the free warehouses opened and managed under the provisions of Articles 166 to 179 of the Customs Act. "b) Paragraph 5d shall be created: 5d. "Enterposed warehouse" shall be a customs warehouse opened and managed under the provisions of Articles 104 to 117 of the Customs Act. 4. Item 4 shall be added to Article 52 Paragraph 5 of the Banking Act (State Gazette No. 52/1997), the following new):"4. the heads in the Customs Agency and in the Regional Customs Directorates, when:(a) an act by the customs authorities establishes that the person inspected has thwarted the performance of an inspection by the customs authorities or does not keep the required accounting record or they are incomplete of unreliable;(b) an act by the customs authorities establishes customs violations;(c) the imposition of distraints on bank accounts is required in order to secure receivables established and collectable by the customs authorities, as well as to secure fines, legal interest due or other similar receivables;(d) an act by a state authority has established the occurrence of an accidental event, which has brought about the destruction of the accounting documentation of the subject inspected by the customs authorities. " 5. Article 17 of the State Savings Bank Act (promulgated in the State Gazette No. 95/1967; amended in Nos. 21/1975, No. 83/1978, No. 41/1985 and No. 59/1996), shall be amended as follows:1. A new Paragraph 3 shall be inserted:"(3) By request of the heads of the Customs Agency and in the regional customs directorates, the court may rule disclosure of the information referred to in Paragraph 2, when:(a) an act by the customs authorities establishes that the person inspected has thwarted the performance of an inspection by the customs authorities or does not keep the required accounting record or they are incomplete of unreliable;(b) an act by the customs authorities establishes customs violation;(c) the imposition of distraints on bank accounts is required in order to secure receivables established and collectable by the customs authorities, as well as to secure fines, legal interest due or other similar receivables;(d) an act by a state authority has established the occurrence of an accidental event, which has brought about the destruction of the accounting documentation of the subject inspected by the customs authorities. "2. Paragraph 3 shall be renumbered to become Paragraph 4. 6. In Article 83, Paragraph 1 of the Administrative Violations and Sanctions Act (promulgated in the State Gazette No. 92/1969; amended and supplemented in No. 54/1978, Nos. 28 and 101 of 1983, No. 89/1986, No. 24/1987, No. 94/1990, No. 105/1991, No. 59/1992, No. 102/1995, and Nos. 12 and 110/1996), after the words "legal persons" the words "and sole traders" shall be inserted. 7. Item 3 of Article 34 of the Administrative Procedure Act (promulgated in the State Gazette No. 90/1979; amended and supplemented in No. 9/1983, No. 26/1988, No. 94/1990, Nos. 25 and 61/1991, No. 19/1992, Nos. 65 and 70/1995, No. 122/1997), shall be repealed. 8. In Decree No. 2242 on Free Zones (promulgated in the State Gazette No. 55/1987; amended and supplemented in No. 4/1989, No. 84/1993 and No. 26/1996), everywhere the words "free duty-free zones" shall be replaced passim by "free zones." 9. (1) As of 1 January 1998 and until the entry into force of this Act, the Customs General Directorate shall create an off budget account "Financial provision for the combat against fraud and drug-trafficking, training of and incentives to customs officers and development of the border checkpoints infrastructure."(2) The revenues to the off-budget account shall be collected from:1. fees for additional services collectable by the customs authorities within amounts specified by the Council of Ministers. Such fees shall not be considered customs duties;2. proceeds under contracts concluded with legal and natural persons for activities approved by the Minister of Finance within the territory of the border checkpoints and other similar places where additional customs control is required;3. proceeds intended for the Customs Agency from fines and goods seized in favour of the state after deduction of expenses made, as well as sums being the equivalent value of goods seized in favour of the state when they are missing or have been alienated;4. twenty per cent of the fines collected for foreign exchange violations;5. proceeds received from utilization of buildings and equipment, and from provision of information;6. interests.(3) The funds in the off-budget account shall be spent for:1. financial provision for the combat against customs contraband and drugs trafficking;2. coverage of expenses related to the provision of additional services and the facilities;3. development and maintenance of the infrastructure of the Customs Agency on the territory of the border checkpoints and for other needs as defined by the Minister of Finance;4. training and qualification of customs officers;5. incentives to customs officers and encouragement for the detection of customs and foreign exchange violations;(4) The excess balance of income over expenditures at the date of entry into force of this Act shall be a transiting balance and shall come into use for the account under Article 14.(5) The off-budget account shall be approved by the Minister of Finance upon a proposal by the Director of the Customs Agency. An ordinance of the Minister of Finance shall establish the procedure for collecting and spending of the funds. 10. The balances at 31 December 1997 on the Income-Expense Account covering the Activity of Customs General Directorate, established by Council of Ministers Decree No. 44/1991 on Reduction of Budget Expenditures (promulgated in the State Gazette No. 23/1991; corrected in No. 26/1991; amended and supplemented in Nos. 45 and 70/1991, Nos. 40, 43, 47 and 51/1992, Nos. 5, 96 and 104/1993, Nos. 2, 6, 24 and 33/1995, No. 108/1996 and No. 61/1997), following the implementation of the provisions under 13 of the Transitional and Final Provisions of the 1997 Republic of Bulgaria State Budget of the Act, shall be debited to the budget of the Customs General Directorate. 11. The balances at 31 December 1997 on the Income-Expense Account pursuant to Articles 102 and 103 by the Regulations for Application of the Customs Act, approved by Council of Ministers Decree No. 5/1975 (promulgated in the State Gazette No. 12/1975; amended and supplemented in No. 49/1978, No. 81/1988, No. 34/1990, Nos. 26 and 30/1991, Nos. 15, 20, 81 and 104/1992, Nos. 37, 68 and 70/1993, Nos. 6, 9, 16, 30 and 62/1997), shall be debited to the off-budget account under 9. 12. The Customs Act (promulgated in Transactions of the Presidium of the National Assembly No. 21/1960; amended and supplemented in the State Gazette No. 66/1966, No. 26/1969, No. 85/1972, No. 84/1988, No. 30/1990) shall be amended as follows:1. In Article 17, Paragraph 2, the number "2" shall be replaced by "5,000".2. In Article 56, Paragraph 1 the words "from five to fifty" and in Paragraph 2, the words "up to BGN 100" shall be replaced by "up to BGN 1 000 000".3. In Article 58, Paragraph 3, the number "5" shall be replaced by "1000".4. In Article 66, Paragraph 2, the number "30" shall be replaced by "2000". 13. of 3, Item 1 and 9, 10, 11 of the Transitional and Final Provisions of this Act shall enter into force on 1 January 1998, while 12 shall enter into force three days after promulgation of the Act in the State Gazette. 14. (Amended, SG No. 89/1998) This Act shall enter into force on 1 January 1999 and shall repeal:1. The Customs Act (promulgated in Transactions of the Presidium of the National Assembly No. 21/1960; amended and supplemented in the State Gazette No. 66/1966, No. 26/1969, No. 85/1972, No. 84/1988 and No. 30/1990);2. Decree No. 692/1951 on determining and paying rewards to discoverers of customs contraband (promulgated in Transactions of the Presidium of the National Assembly No. 2/1951). 15. (1) (SG No. 89/1998) Within ten months after promulgation of this Act the Council of Ministers shall adopt Regulations for Application of this Act.(2) (Supplemented, SG No. 105/2006) The Minister of Finance shall issue ordinances and instructions concerning the implementation of this Act and the Regulations for Application thereof, as well as the customs legislation of the European Union. 16. The implementation of this Act shall be assigned to the Minister of Finance and the Director of the Customs Agency. 17 (New, SG No. 105/2006) This Act shall be implemented as long as it does not contradict the customs legislation of the European Union.TRANSITIONAL AND FINAL PROVISIONSto the Lev Re-Denomination Act(SG, No. 20/1999, supplemented SG No. 65/1999,effective since 5.07.1999) 4. (1) (Supplemented, SG No. 65/1999) With the entry into force of this act all numbers in old levs specified in laws that have become effective before 5 July 1999 shall be replaced by numbers reduced 1000 fold in new levs. The replacement of all numbers by numbers reduced 1000 fold in new levs shall apply also to all acts adopted before 5 July 1999 that have become or shall become effective after 5 July 1999.(2) The authorities that have adopted or issued secondary statutory acts which have become effective before 5 July 1999 and which contain figures in levs shall make amendments therein ensuing from this act in such a manner as to apply as of the date this act becomes effective.TRANSITIONAL AND FINAL PROVISIONSto the Act Amending and Supplementing the Customs ActSG No. 63/2000, amended SG No. 110/2001; effective 1.01.2002 54. In Article 13, 14, Article 183, Paragraph 2, Article 186, Paragraph 4, Article 231 and 16 of the Transitional and Final Provisions of the Act the words "the General Customs Directorate" shall be substituted by "Customs Agency" and in Article 21, Paragraph 4 the words ""the General Customs Directorate" shall be substituted by "Central Customs Administration". Everywhere in the Act the words "the head of the General Customs Directorate" shall be substituted by "the Director of the Customs Agency" and the words "the heads of the regional customs directorates" shall be substituted by "the directors of the regional customs directorates". 55. The Customs Agency shall be the legal successor of the National Customs Agency, of the regional customs directorates, customs, customs offices and customs posts. 56. (Effective 1.01.2000, repealed SG No. 110/2001).TRANSITIONAL AND FINAL PROVISIONSto the Act Amending and Supplementing the Customs Act(SG No. 37/2003) 73. On the occurrence of a customs debt for goods placed under the temporary importation regime under the terms of the repealed Article 17 of the Investment Promotion Act the amount of the debt shall be determined on the basis of the levying elements compatible with these goods at the time of the occurrence of the customs debt. In these cases the provision of Article 203, Paragraph 3 of the Customs Act shall not apply. 74. Within one month after the promulgation of this Act the customs officers shall submit the sworn statement under Article 10, Paragraph 4. 75. The provisions of 30 - 51 shall enter into force on 1 November 2003, and the provision of 67 shall enter into force on 1 June 2003. 76. Within one month after the promulgation of this Act the Council of Minister shall adopt amendments to the Regulation on applying this Act.Lev Re-denomination Act Promulgated, State Gazette No. 20/5.03.1999,amended, SG No. 65/20.07.1999 (effective 5.07.1999).TRANSITIONAL AND FINAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. (1) (Amended, SG No. 65/1999) Upon the entry of this Act into force, all figures expressed in old lev terms as indicated in the laws which will have entered into force prior to the 5th day of July 1999 shall be replaced by figures expressed in new lev terms, reduced by a factor of 1,000. The replacement of all figures expressed in old lev terms, reduced by a factor of 1,000, shall furthermore apply to all laws passed prior to the 5th day of July 1999 which have entered or will enter into force after the 5th day of July 1999.(2) The authorities, which have adopted or issued any acts of subordinate legislation which will have entered into force prior to the 5th day of July 1999 and which contain figures expressed in lev terms, shall amend the said acts to bring them in conformity with this Act so that the amendments apply as from the date of entry of this Act into force.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TRANSITIONAL AND FINAL PROVISIONSto the Excise Duties and Tax Warehouses ACT(SG No. 91/2005, effective 1.01.2005) 9. Until entry into force of the statement of issuance of a license for management of a tax warehouse or refusal for its issuance existing producers of excisable goods at 1 January 2006 who file an application for license by 1 March 2006 shall continue their activity as licensed warehouse keepers under the procedure of this Act.TRANSITIONAL AND FINAL PROVISIONSof the Administrative Procedure Code(SG, No. 30/2006, effective 12.07.2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84. The Customs Act, (Promulgated SG No. 15/1998, amended, SG No. 89/1998, amended and supplemented, SG No. 153/1998, SG No. 30/1999, amended, SG No. 83/1999, amended and supplemented, SG No. 63/2000, 110/2001, supplemented, SG No. 76/2002, amended and supplemented, SG No. 37/2003, amended, SG No. 95/2003, supplemented, SG No. 38/2004, amended and supplemented SG No. 45/2005, amended SG 86/2005, supplemented, SG No. 91/2005, amended and supplemented, SG No. 105/2005) shall be amended as follows:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. Everywhere in the act the words "the Administrative Procedure Act" shall be replaced by "the Administrative Procedure Code". For more information visit www.solicitorbulgaria.com id: 335 Mon, 04 Aug 2008 06:38:36 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-2 http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-2 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/CUSTOMS_ACT.jpg EUR http://web.solicitorbulgaria.com/index.php/bulgarian-customs-act-part-2 legal 80 negotiable Bulgarian Corporate Income Tax Act, part 1 info@solicitorbulgaria.com (SolicitorBulgaria) PART ONEGENERAL DISPOSITIONSChapter OneGENERAL PROVISIONSScope of TaxationArticle 1. This Act regulates taxation of:1. the profit accruing to resident legal persons;2. the profit accruing to resident legal persons which are not merchants, including the organizations of the religious denominations, from any transactions covered under Article 1 of the Commerce Act , as well as from letting movable and immovable property;3. the profit accruing to non-resident legal persons from a permanent establishment in the Republic of Bulgaria;4. the income, as specified in this Act, accruing to resident and non-resident legal persons from a source inside the Republic of Bulgaria;5. the expenses as specified in Part Four herein;6. the activities of organizers of games of chance;7. the income accruing to public-financed enterprises from any transactions covered under Article 1 of the Commerce Act, as well as from letting movable and immovable property;8. the vessels operation activity of persons which… For more information visit http://www.solicitorbulgaria.com id: 334 PART ONEGENERAL DISPOSITIONSChapter OneGENERAL PROVISIONSScope of TaxationArticle 1. This Act regulates taxation of:1. the profit accruing to resident legal persons;2. the profit accruing to resident legal persons which are not merchants, including the organizations of the religious denominations, from any transactions covered under Article 1 of the Commerce Act , as well as from letting movable and immovable property;3. the profit accruing to non-resident legal persons from a permanent establishment in the Republic of Bulgaria;4. the income, as specified in this Act, accruing to resident and non-resident legal persons from a source inside the Republic of Bulgaria;5. the expenses as specified in Part Four herein;6. the activities of organizers of games of chance;7. the income accruing to public-financed enterprises from any transactions covered under Article 1 of the Commerce Act, as well as from letting movable and immovable property;8. the vessels operation activity of persons which carry out maritime merchant shipping.Taxable PersonsArticle 2. (1) Taxable persons shall be:1. the resident legal persons;2. the non-resident legal persons which carry out economic activity in the Republic of Bulgaria through a permanent establishment or which receive income from a source inside the Republic of Bulgaria;3. the sole traders: in respect of the taxes withheld at source and in the cases specified in the Income Taxes on Natural Persons Act;4. the natural persons who are merchants within the meaning given by Article 1 (3) of the Commerce Act: in the cases specified in the Income Taxes on Natural Persons Act;5. the employers and the commissioning entities under contracts for management and control: in respect of the tax on the expenses on fringe benefits, provided for in Part Four herein.(2) For the purposes of this Act, the unincorporated associations and the contribution payment centres established in pursuance of Article 8 of the Social Insurance Code shall be treated as equivalent to legal persons.(3) For the purposes of taxation of income from a source inside the Republic of Bulgaria, any non-resident organizationally and economically distinct formation (trust, fund and other such), which independently carries out economic activity or performs and manages investments, shall likewise be a taxable person where the owner of the income cannot be identified.Resident Legal PersonsArticle 3. (1) "Resident legal persons" shall be:1. any legal persons incorporated under Bulgarian law;2. any companies incorporated under Council Regulation (EC) No 2157/2001, and any cooperative society incorporated under Council Regulation No 1435/2003, where the registered office thereof is situated in the country and they are entered into a Bulgarian register.(2) Any resident legal persons shall be liable to taxes under this Act in respect of the profits and income accruing thereto from all sources inside and outside the Republic of Bulgaria.Non-resident Legal Persons"Article 4. (1) "Non-resident legal persons" shall be any persons which are not resident persons.(2) Any non-resident legal persons shall be liable to taxes under this Act in respect of the profits realized through a permanent establishment in the Republic of Bulgaria and of the income as specified in this Act accruing from a source inside the Republic of BulgariaTypes of TaxesArticle 5. (1) Profits shall attract a corporation tax.(2) The income accruing to any resident and non-resident legal persons, as specified in this Act, shall attract a tax withheld at source.(3) The expenses, as specified in this Act, shall attract a tax on expenses.(4) A tax alternative to corporation tax shall be levied on:1. the activity of organizing games of chance;2. the income accruing to public-financed enterprises from any transactions covered under Article 1 of the Commerce Act, as well as from letting movable and immovable property;3. the vessels operation activity.Determination of Amount of TaxArticle 6. The amount of tax shall be determined by multiplying the taxable amount by the rate of tax.Tax ReturnsArticle 7. The standard forms of returns and of other documents under this Act shall be endorsed by an order of the Minister of Finance and shall be promulgated in the State Gazette.Remittance of TaxesArticle 8. (1) The taxes due under this Act shall be remitted by the taxable persons in revenue to the executive budget.(2) The taxes due shall be credited to an account of the National Revenue Agency territorial directorate exercising competence over the place of registration of the taxable persons or over the place where the taxable persons are registrable.(3) The taxes due shall be deemed to be remitted on the date on which the amounts are received in the executive budget on the account of the competent National Revenue Agency territorial directorate.Default InterestArticle 9. Interest according to the Interest on Taxes, Fees and Other State Receivables Act shall be due on any taxes which are not remitted when due, including any tax prepayments.Documentary SupportArticle 10. (1) An accounting expense shall be recognized for tax purposes where it is supported by an accounting source document within the meaning given by the Accountancy Act.(2) An accounting expense shall be recognized for tax purposes even where part of the information required under the Accountancy Act is missing in the accounting source document, provided that documents certifying any such missing information are available.(3) Outside the cases referred to in Paragraph (2), an accounting expense shall be recognized even where the accounting source document has been issued by a person which is not an enterprise within the meaning given by Article 1 (2) of the Accountancy Act and part of the information required under the Accountancy Act is missing in the document, provided that the said document gives a true view of the business transaction documented.(4) The taxable persons shall be obligated to register and account for any sale of goods and services as effected by means of issuing a fiscal cash receipt printed by a fiscal device according to a procedure established by an ordinance of the Minister of Finance, except where payment is effected by bank transfer or through an offset. The lack of a fiscal cash receipt printed by a fiscal device, where the issuance of such a receipt is obligatory, shall be grounds to deny recognition of an accounting expense for tax purposes.(5) In respect of international air transport, an accounting expense shall be supported by documents where documented by means of an accounting source document and the boarding pass for the flight executed. Where the accounting source document (protocol) is issued by the person who effects the sale on behalf and for the account of the carrier, the said person shall be deemed to be an issuer of the said document.(6) (New, SG No. 110/2007) Documentary support of the expenses referred to in Items 1 and 3 of Article 204 herein, which attract a tax on expenses, shall be available even when the said expenses are documented only by a fiscal cash receipt printed by a fiscal device. The expenses referred to in Item 3 of Article 204 herein, which attract a tax on expenses, shall be recognized for tax purposes even where a transportation control and movement document has not been issued.Expenses Defined as Compulsory by Statutory InstrumentArticle 11. Any expenses defined as compulsory by a statutory instrument shall be recognized for tax purposes and shall not attract a tax on expenses, unless otherwise provided for in this Act.Chapter TwoSOURCES OF PROFIT AND INCOMEProfit and Income from Sources Inside Republic of BulgariaArticle 12. (1) Any profit and income accruing to non-resident legal persons, derived from economic activity carried out through a permanent establishment in the country or from disposition of property of any such permanent establishment, shall have their source inside the country.(2) Any income from financial assets issued by resident legal persons, the Bulgarian State and the municipalities, shall have its source inside the country.(3) Any income from transactions in financial assets referred to in Paragraph (2) shall have its source inside the country.(4) Any income from dividends and shares in a liquidation surplus, accruing from participating interests in resident legal persons, shall have its source inside the country.(5) The following income, charged by resident legal persons, resident sole traders or non-resident legal persons and sole traders through a permanent established or a fixed base in the country or paid by resident natural persons or by non-resident natural persons who have a fixed base in the country in favour of non-resident legal persons, shall have its source inside the country:1. any interest payments, including interest within payments under a financial lease contract;2. any income from rent or other provision for use of movable or immovable property;3. any copyright and licence royalties;4. any technical assistance fees;5. any payments received under franchising agreements and factoring contracts;6. any compensations for management or control of a Bulgarian legal person.(6) (Amended, SG No. 110/2007) Any income covered under Paragraph (5), which is charged in favour of non-resident legal persons from a permanent establishment of a resident person or from a fixed base of resident natural persons situated outside the territory of the country, shall not have its source inside the country.(7) Any income from agriculture, forestry, hunting ground management and fisheries within the territory of the country shall have its source inside the country.(8) Any income from immovable property or from transactions in immovable property, including an undivided interest or a limited right in rem to any immovable property situated in the country, shall have its source inside the country.(9) Upon determination of the source of income under this Article, the place of payment of the income shall be ignored.Chapter ThreeINTERNATIONAL TAXATIONInternational TreatiesArticle 13. Where an international treaty, which has been ratified by the Republic of Bulgaria, has been promulgated and has entered into force, contains any provisions different from the provisions of this Act, the provisions of the relevant international credit shall prevail.Foreign Tax CreditArticle 14. (1) Where the provisions of an international treaty referred to in Article 13 herein are not applied, the taxable persons shall be allowed foreign tax credit under the terms and according to the procedure established by this Act.(2) Upon assessment of the corporation tax or of the alternative taxes under this Act, the taxable persons shall be allowed foreign tax credit in respect of each tax similar to corporation tax or imposed in lieu of such tax and paid abroad.(3) The taxable persons shall be allowed foreign tax credit in respect of the tax imposed abroad on the gross amount of the income from dividends, interest payments, copyright and licence royalties, technical assistance fees and rents.(4) The tax credit referred to in Paragraphs (2) and (3) shall be determined for each State and for each type of income separately and shall be limited to the amount of the Bulgarian tax on the said profits or income.Chapter FourPREVENTION OF TAX EVASIONTransactions between Related PartiesArticle 15. Where related parties enter into commercial and financial relationships under terms which affect the amount of the tax financial result and which differ from the terms between unrelated parties, the tax financial result shall be determined and taxed under the terms which would have arisen in respect of unrelated parties.Tax EvasionArticle 16. (1) Where one or more transactions, inter alia between unrelated parties, has been concluded under terms whereof the fulfilment leads to tax evasion, the tax financial result shall be determined ignoring the said transactions, certain terms thereof or the legal form thereof and taking into consideration the tax financial result that would be obtained upon the effecting of a customary transaction of the relevant type at market prices and intended to achieve the same economic result but which does not lead to tax evasion.(2) The following shall furthermore be treated as tax evasion:1. any substantial excess of the quantities of raw and prime materials used as production inputs and other production costs over the customary quantities and costs for the activity carried out by the person, where any such excess is not due to reasons beyond the control of the person;2. any contracts of loan for use or other gratuitous provision for use of tangible and intangible benefits;3. any borrowing or lending at interest diverging from the market rate of interest as applicable at the time of conclusion of the transaction, including in the cases of interest-free loans or other temporary gratuitous financial assistance, as well as the write-off of debts or repayment of non-business debts for own account;4. payment of any remunerations or compensations for any services which have not been actually performed.(3) Where a transaction is concealed by another, colourable transaction, the tax liability shall be assessed under the terms of the concealed transaction.Transfers Related to Permanent EstablishmentArticle 17. This Chapter shall furthermore apply, mutatis mutandis, to any transfers between a permanent establishment and other divisions of the enterprise of a non-resident person situated outside the country, conforming to the specifics of the permanent establishment.PART TWOCORPORATION TAXChapter FiveGENERAL DISPOSITIONSTax Financial ResultArticle 18. (1) (Amended, SG No. 110/2007) "Tax financial result" shall be the accounting financial result adjusted according to the procedure established by this Act.(2) The positive tax financial result shall be a tax profit.(3) The negative tax financial result shall be a tax loss.Taxable AmountArticle 19. The taxable amount for assessment of the corporation tax shall be the tax profit.Rate of TaxArticle 20. The rate of corporation tax shall be 10 per cent.Tax PeriodArticle 21. (1) The tax period for assessment of the corporation tax shall be the calendar year, save as otherwise provided for in this Act.(2) In respect of any newly incorporated taxable persons, the tax period shall cover the period from the date of incorporation thereof until the end of the year, save as otherwise provided for in this Act.Chapter SixGENERAL DISPOSITIONS REGARDING DETERMINATION OF TAX FINANCIAL RESULTDetermination of Tax Financial ResultArticle 22. (Amended, SG No. 110/2007) The tax financial result shall be determined by means of adjusting the accounting financial result, according to a procedure and in a manner specified in this Act, for:1. the permanent tax differences;2. the temporary tax differences;3. the amounts provided for in this Part.Permanent Tax Differences and Adjustment of AccountingFinancial Result for Such DifferencesArticle 23. (1) "Permanent tax differences" shall be accounting income or expenses which are not recognized for tax purposes.(2) For the purposes of determination of the tax financial result, where this Act indicates that:1. a cost (loss) is not recognized for tax purposes, the accounting financial result shall be credited with any such cost (loss) in the year of accounting for the said cost (loss), and the accounting financial results shall not be adjusted during the succeeding years;2. an income (profit) is not recognized for tax purposes, the accounting financial result shall be debited with any such income (profit) in the year of accounting for the said income (profit), and the accounting financial results shall not be adjusted during the succeeding years.Temporary Tax Differences and Adjustment of AccountingFinancial Result for Such DifferencesArticle 24. (1) Temporary tax differences shall arise where any income or expenses are recognized for tax purposes in a year other than the year of accounting for the said income or expense.(2) A "temporary tax difference" shall be:1. any expense unrecognized for tax purposes in the year of accounting for any such expense, which will be recognized during succeeding years, when the conditions for recognition according to this Part occur;2. any income unrecognized for tax purposes in the year of accounting for any such income, which will be recognized during succeeding years, when the conditions for recognition according to this Part occur.(3) Temporary tax differences shall furthermore originate in the cases of transformation of corporations and cooperatives according to the procedure established by Chapter Nineteen herein.(4) For the purposes of determination of the tax financial result, where this Act indicates that:1. any cost (loss), which is not recognized for tax purposes in the year of accounting and will be recognized during succeeding years when the condition for recognition according to this Part occurs:(a) the accounting financial result in the year of accounting for the cost (loss) shall be credited with any such cost (loss): origination of a temporary tax difference;(b) the accounting financial result in the year when the condition for recognition according to this Part occurs shall be debited with any such cost (loss): reversal of a temporary tax difference;2. any income (profit), which is not recognized for tax purposes in the year of accounting and will be recognized during succeeding years when the condition for recognition according to this Part occurs:(a) the accounting financial result in the year of accounting for the income (profit) shall be debited with any such income (profit): origination of a temporary tax difference;(b) the accounting financial result in the year of when the condition for recognition according to this Part arises shall be credited with any such income (profit): reversal of a temporary tax difference.Tax-Recognized Income and CostArticle 25. For the purposes of determination of the tax financial result, where this Act indicates that any income (cost) or profit (loss) is recognized for tax purposes in the year of accounting for such income, the accounting financial result for the current year or any succeeding years shall not be adjusted for the said income (cost) or profit (loss).Chapter SevenPERMANENT TAX DIFFERENCESExpenses Unrecognized for Tax PurposesArticle 26. The following accounting expenses shall not be recognized for tax purposes:1. any non-business expenses;2. any expenses which are not supported by documents within the meaning given by this Act;3. any expenses on tax charged or credit for input tax used according to the Value Added Tax Act , where the expense incurred on the business transaction wherewith the value added tax is associated is not recognized for tax purposes;4. (amended, SG No. 110/2007) any expense accounted for by a supplier under the Value Added Tax Act on value added tax charged by the said supplier or by the revenue authority in connection with a supply effected, with the exception of the tax charged in connection with supplies effected free of charge and supplies in connection with deregistration under the Value Added Tax Act; this item shall not apply to expenses accounted for as a result of an adjustment in the credit for input tax under the Value Added Tax;5. (amended, SG No. 110/2007) any subsequent expenses accounted for in connection with a claim which has originated from a tax charged or credit for input tax used under Items 3, 4, 8 and 10;6. any expenses on fines charged, forfeitures and other sanctions imposed for violation of statutory instruments, any default interest charged for late payment of public state or municipal debts;7. any donation expenses other than such covered under Article 31 herein;8. any expenses on a tax which is subject to withholding at source and is for the account of the payer of the income;9. any wage expenses at commercial corporations wherein the State or a municipality holds an interest exceeding 50 per cent in excess of the resources fixed by statutory instruments.10. (new, SG No. 110/2007) any expense accounted for upon enforcement of a liability for the value added tax due and unremitted in the cases referred to in Article 177 of the Value Added Tax Act; 11. (new, SG No. 110/2007) any expenses which constitute hidden profit distribution.Income Unrecognized for Tax PurposesArticle 27. (1) The following accounting income shall not be recognized for tax purposes:1. any income resulting from distribution of dividends by resident legal persons;2. any income originating in connection with any expenses unrecognized for tax purposes, as referred to in Article 26 herein, up to the amount of the unrecognized expenses;3. any income from interest payments on unduly remitted or collected public obligations, as well as on value added tax not refunded within the statutory time limits, charged by the central-government or municipal authorities.(2) Item 1 of Paragraph (1) shall not apply:1. to any income charged as a result of distribution of dividends by licensed special purpose investment companies under the Special Purpose Investment Companies Act ;2. upon hidden profit distribution.Unrecognized Expenses on Shrinkage and WastageArticle 28. (1) Any accounting expenses on shrinkage of fixed and current assets shall not be recognized for tax purposes, with the exception of such due to a force majeure.(2) Any accounting expenses on shrinkage and waste of stocks of materials shall not be recognized for tax purposes.(3) Paragraph (2) shall not apply where the expenses are due to:1. a force majeure;2. spoilage or alteration of physical and chemical properties, as established by a statutory instrument or by company standards, where a statutory instrument does not exist, and in the customary amounts for the relevant activity;3. expiry of the service life according to a statutory instrument or company standards, where a statutory instrument does not exist, and in the customary amounts for the relevant activity.4. (new, SG No. 110/2007) shrinkage of merchandise arising from business operation at establishments where customers have direct physical access to the merchandise on offer, to an amount of up to 0.25 per cent of the amount of the net turnover of the distributive trade establishment concerned.(4) Any tax expense referred to in Article 79 (3) of the Value Added Tax Act on any assets, which is not recognized according to the procedure established by Paragraphs (1) to (3), shall not be recognized for tax purposes.(5) Any subsequent accounting expenses, which have been accounted for in connection with a claim originating from shrinkage and wastage of any assets unrecognized according to the procedure established by Paragraphs (1) to (4), shall not be recognized for tax purposes.Unrecognized Expenses Originating in Connectionwith Shrinkage and WastageArticle 29. Any accounting expenses which have originated in connection with any shrinkage and wastage of assets or any claim related therewith shall not be recognized for tax purposes up to the amount of the unrecognized expenses referred to in Article 28 herein.Recognition of Part of Undistributable Expenses ofNot-for-Profit Legal EntitiesArticle 30. (1) Any accounted for undistributable expenses, corresponding to the activity subject to levy of corporation tax, incurred by any not-for-profit legal entities, shall not be recognized for tax purposes.(2) The part of the undistributable expenses, determined by multiplying the total amount of undistributable expenses by the ratio between the income from the activity subject to levy of corporation tax and all income accruing to the not-for-profit legal entity, shall be recognized for tax purposes.Donation ExpensesArticle 31. (1) The accounting expenses on donations to a total amount of up to 10 per cent of the positive accounting financial result (accounting profit) shall be recognized for tax purposes where the expenses on donations are incurred in favour of:1. any health-care and medical-treatment facilities;2. any specialized institutions for provision of social services according to the Social Assistance Act , as well as of the Social Assistance Agency and of the Social Assistance Fund under the Minister of Labour and Social Policy;3. any specialized child institutions according to the Child Protection Act, as well as of any care homes for children deprived of parental care according to the Public Education Act;4. any creches, kindergartens, schools, higher schools or academies;5. any public-financed enterprises within the meaning given by the Accountancy Act;6. any religious denominations registered in the country;7. any specialized enterprises or cooperatives of persons with disabilities, entered in the register referred to in Article 29 of the Integration of Persons with Disabilities Act, as well as in favour of the Agency for Persons with Disabilities;8. any persons with disabilities, as well as for technical aids therefore;9. any victims of crises within the meaning given by the Crisis Management Act, or of the families thereof;10. the Bulgarian Red Cross;11. any socially disadvantaged persons;12. any children with disabilities or parentless children;13. any cultural institutes, or for the purposes of cultural, educational or research exchange under an international treaty whereto the Republic of Bulgaria is a party;14. any not-for-profit legal entities, registered in the Central Register of Not-for-Profit Legal Entities for pursuit of public benefit activities, with the exception of organizations supporting culture within the meaning given by the Financial Support for Culture Act ;15. any schoolchildren and students at Bulgarian schools in respect of the scholarships instituted and provided thereto for instruction;16. the Bulgaria Energy Efficiency Fund;17. any therapeutic communities for narcotics-dependent persons, as well as of narcotics-dependent persons for the therapy thereof.(2) Accounting expenses on donations shall be recognized for tax purposes to an amount of up to 50 per cent of the accounting profit where the expenses on donations are incurred in favour of the Fund for Medical Treatment of Children Centre.(3) The assistance provided gratuitously under the terms and according to the procedure established by the Financial Support for Culture Act shall be recognized for tax purposes to an amount of up to 15 per cent of the accounting profit.(4) Any expenses on donations of computers and computer peripheral equipment, which are manufactured within one year prior to the date of the donation, and made in favour of Bulgarian schools, including higher schools, shall be recognized for tax purposes.(5) The aggregate amount of the expenses on donations recognized for tax purposes under Paragraphs (1) to (4) may not exceed 65 per cent of the accounting profit.(6) The entire expense on a donation shall not be recognized for tax purposes where the donation benefits, whether directly or indirectly, the managers who make it or those who dispose of the said donation, or where there is evidence that the gift has not been received.Taxable Person's Formation ExpensesArticle 32. (1) The accounting expenses on the incorporation of a legal person shall be recognized for tax purposes at the taxable persons which are incorporators. The unrecognized expenses shall be recognized for tax purposes upon determination of the tax financial result of the newly formed legal person in the year of commencement of the legal existence thereof.(2) The expenses referred to in Paragraph (1) shall be recognized for tax purposes in respect of the incorporators upon occurrence of circumstances determining that the legal existence of a new legal person will not commence. The said expenses shall be recognized in the year of occurrence of the said circumstances, if the requirements of this Act are complied with.Natural Persons' Travel and Per Diem ExpensesArticle 33. (Amended, SG No. 110/2007, effective 1.01.2007) (1) The following accounting travel and per diem expenses of natural persons shall be recognized for tax purposes, where the travel and stay were performed in connection with the activity of the taxable person:1. the travel and per diem expenses of any natural persons who are in employment relationships with the taxable person or are hired thereby under non-employment relationships, including such expenses of managing directors, members of management or supervisory bodies or the taxable person;2. the travel and per diem expenses incurred by a sole trader of:(a) the natural person who owns the enterprise of the natural person, and(b) the persons who are in employment relationships with the sole trader or are hired thereby under non-employment relationships.(2) The accounting travel and per diem expenses of any shareholders or partners shall not be recognized for tax purposes where the said shareholders or partners perform the travel and stay in their capacity of shareholders or partners.Chapter EightTEMPORARY TAX DIFFERENCESNon-recognition of Income and Expenses from Subsequent Valuations(Revaluations and Impairments)Article 34. (1) Any income and expenses from subsequent valuations of assets and liabilities shall not be recognized for tax purposes in the year of accounting for the said income and expenses.(2) Paragraph (1) shall not apply in respect of any accounting income and expenses from subsequent valuations of monetary positions in foreign currency at the central exchange rate of the Bulgarian National Bank.Recognition of Expenses and Income from Subsequent Valuations(Revaluations and Impairments)Article 35. (1) Any income and expenses from subsequent valuations unrecognized for tax purposes according to the procedure established by Article 34 herein shall be recognized for tax purposes in the year of write-off of the relevant asset or liability.(2) Where the value of the stocks of materials of a specific type, written off during the current year, exceeds the value of the stocks of materials of the said type as at the 31st day of December of the preceding year, the unrecognized income referred to in Article 34 herein in respect of the said type of stocks of materials during preceding years shall be recognized for tax purposes during the current year.(3) Paragraphs (1) and (2) shall not apply in the cases of shrinkage and wastage of assets, which are not recognized for tax purposes according to the procedure established by Article 28 herein.Income and Expenses from Initial Recognition and SubsequentValuation of Biological Assets and Agricultural (Farming) ProduceArticle 36. (1) Any excess of the income (profits) from an initial recognition and subsequent valuation of biological assets and agricultural (farming) process over the expenses accounted for in connection with the said assets shall not be recognized for tax purposes in the year of accounting for the said income and expenses. Any excess of the income referred to in sentence one shall be recognized for tax purposes in the year of write-off of the relevant asset.(2) Any excess of the expenses reported in connection with biological assets and agricultural (farming) process, over the incomes (profits) from an initial recognition and subsequent valuation of said assets shall not be recognized for tax purposes in the year of accounting for the said income and expenses. Any excess of the expenses referred to in sentence one shall be recognized for tax purposes in the year of write-off of the relevant asset.(3) The provisions of Articles 34 and 35 herein shall not apply to any biological assets and agricultural produce.Recognition of Income and Expenses from SubsequentValuations of ClaimsArticle 37. Any income and expenses from subsequent valuations of claims unrecognized according to the procedure established by Article 34 herein shall be recognized for tax purposes in the year in which one of the following circumstances occurs:1. lapse of the prescription of the claim, but not more than five years after the time the said claim became exigible;2. onerous transfer of the claim;3. the bankruptcy proceedings against the debtor have been closed by a confirmed plan for rehabilitation which provides for incomplete satisfaction of the taxable person; the unrecognized income and expenses shall be recognized for tax purposes solely in respect of the diminution in the claim;4. an effective judgment of court has decreed that the claim or a part thereof is undue; the unrecognized income and expenses shall be recognized for tax purposes solely in respect of the undue part of the claim;5. prior to the lapse of the prescription, the claims have been extinguished by virtue of a law;6. upon expungement of the debtor, where the claim or part thereof has been left unsatisfied: recognition shall be limited to the unsatisfied part.Provisions for DebtsArticle 38. (1) Any expenses on provisions for debts shall be recognized for tax purposes in the year of accounting for any such expenses.(2) Any expenses on provisions unrecognized under Paragraph (1) shall be recognized for tax purposes in the year of repayment of the debt for which the provision has been recognized up to the amount of the debt repaid.(3) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be debited with the accounting incomes or, respectively, with the amount wherewith the accounting expenses have been debited, accounted for in connection with a recognized provision.Provisions Not Included in Tax Depreciable Valueof Tax Depreciable AssetArticle 39. (1) Upon determination of the tax financial result, the accounting financial result shall be debited with the repaid debts related to any provisions which are not included in the tax depreciable value of a tax depreciable asset according to Article 53 (1) herein. The debiting referred to in sentence one shall be performed in the year of repayment of the debt.(2) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be debited with the accounting income or, respectively, with the amount wherewith the accounting expenses have been debited, accounted for in connection with a recognized provision.Specific Procedure for Recognition of Expenses on Provisionsfor Debts upon Cessation of ActivityArticle 40. (1) Any taxable person, which has applied Article 38 (1) or Article 53 (1) herein and has entirely ceased the core activity thereof in the year of repayment of the debts in respect of which a provision unrecognized for tax purposes has been charged, shall not apply the provisions of Article 38 (2) or Article 39 (1) herein and shall be entitled to an offset or refund of the over remitted corporation tax as arrived at according to the procedure established by Paragraph (2).(2) The over remitted corporation tax shall be arrived at as a product of the repaid part of the debts, in respect of which a provision unrecognized for tax purposes has been charged, and the rate of corporation tax for the year of repayment of the debts. The repaid part of the debts for the purposes of sentence one may not exceed the sum total of the tax financial results for the ten years last preceding the year of cessation of activity.Unused LeavesArticle 41. (1) Any expenses on accumulating unused (compensable) leaves at the 31st day of December of the current year, as well as any expenses connected with any such leaves, for compulsory social and health insurance, shall not be recognized for tax purposes in the year of accounting for any such expenses.(2) Any unrecognized expenses on accumulating unused (compensable) leaves referred to in Paragraph (1) shall be recognized for tax purposes in the year during which compensations for the said leaves was actually paid to the staff, up to the amount of the compensations paid.(3) Any unrecognized expenses on compulsory social and health insurance referred to in Paragraph (1) shall be recognized for tax purposes in the year during which the relevant social and health insurance contributions were remitted, up to the amount of the insurance contributions remitted.(4) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be debited with the accounting income or, respectively, with the amount wherewith the accounting expenses have been debited, accounted for in connection with any debts referred to in Paragraph (1).(5) (New, SG No. 110/2007) Paragraph (1) shall not apply to any leaves and social and health insurance contributions connected therewith, the accounting for which does not lead to a diminution in the financial result for the year of accounting for the said expenses.(6) (New, SG No. 110/2007) Any expenses resulting from compensable leaves and social and health insurance contributions connected therewith, leading to a diminution in the financial result, shall not be recognized for tax purposes in a year other than the year of accounting for the said expenses, where the compensations were not paid and the contributions were not remitted at the 31st day of December of the year in which the accounting financial result was debited. In such cases, Paragraphs (2) and (3) shall apply, mutatis mutandis.(7) (New, SG No. 110/2007) Paragraphs (1) to (6) shall not apply to any compensable leaves and social and health insurance contributions connected therewith which, according to accounting legislation, are capitalized as part of the value of a tax depreciable asset.Expenses Constituting Income Accruing to Resident Natural PersonsArticle 42. (1) Any expenses incurred by taxable persons, constituting income accruing to resident natural persons under the Income Taxes of Natural Persons Act, which are not paid as at the 31st day of December of the current year, shall not be recognized for tax purposes in the year of accounting for any such expenses.(2) Paragraph (1) shall not apply to any expenses constituting:1. a basic or supplementary labour remuneration, fixed by a statutory instrument;2. income accruing to sole traders.(3) The expenses unrecognized under Paragraph (1) shall be recognized for tax purposes in the year during which the income is paid, up to the amount of the income paid.(4) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be debited with the accounting income or, respectively, with the amount wherewith the accounting expenses have been debited, accounted for in connection with the debts for any unpaid income referred to in Paragraph (1).(5) (New, SG No. 110/2007) The expenses on compulsory social and health insurance contributions connected with the unrecognized expenses referred to in Paragraph (1) shall not be recognized for tax purposes in the year of accounting for the said expenses where the compulsory social and health insurance contributions were not remitted at the 31st day of December of the current year.(6) (New, SG No. 110/2007) The unrecognized expenses referred to in Paragraph (5) shall be recognized for tax purposes in the year during which the relevant compulsory social and health insurance contributions were remitted, up to the amount of the contributions remitted. Upon determination of the tax financial result, the accounting financial result shall be debited with the accounting income or, respectively, with the amount wherewith the accounting expenses have been debited, accounted for in connection with the debts referred to in Paragraph (5).(7) (New, SG No. 110/2007) Paragraphs (1) and (5) shall not apply to any income and compulsory social and health insurance contributions connected therewith, the accounting for which does not lead to a diminution in the accounting financial result for the year of accounting for the said expenses.(8) (New, SG No. 110/2007) Any expenses resulting from income and compulsory social and health insurance contributions referred to in Paragraphs (1) and (5), leading to a diminution in the financial result, shall not be recognized for tax purposes in a year other than the year of accounting for the said expenses, where the income was not paid and the contributions were not remitted at the 31st day of December of the year in which the accounting financial result was debited. In such cases, Paragraphs (3) and (6) shall apply, mutatis mutandis.(9) (New, SG No. 110/2007) Paragraphs (1) to (8) shall not apply to any income and social and health insurance contributions connected therewith which, according to accounting legislation, are capitalized as part of the value of a tax depreciable asset.Regulation of Thin CapitalizationArticle 43. (1) Any expenses on interest payments shall not be recognized for tax purposes in the year of accounting for any such expenses to an amount arrived at for the current year according to the following formula:UEIP = EIP - IIR - 0.75 x AFRBI, where:UEIP shall be the unrecognized expenses on interest payments;EIP shall be the expenses on interest payments arrived at according to the procedure established by Paragraph (3);IIR shall be the total amount of income from interest receivable;FRBI shall be the accounting financial result before all expenses on interest payments and income from interest receivable.(2) Any expenses on interest payments, unrecognized under Paragraph (1), shall be recognized for tax purposes during the next succeeding five years until depletion of the said expenses, to an amount arrived at for the current year according to the following formula:REIP = 0.75 x FRBI + IIR - EIP, where:REIP shall be the recognized expenses on interest payments;FRBI shall be the accounting financial result before all expenses on interest payments and income from interest receivable;IIR shall be the total amount of income from interest receivable;EIP shall be the expenses on interest payments arrived at according to the procedure established by Paragraph (3) for the current year.(3) The expenses on interest payments shall include all financial (interest) income, accounted for under financing by means of debt capital. The expenses on interest payments shall not include:1. any interest payments on financial leases and bank loans, except where the parties to the transaction are related parties or the lease or the loan, as the case may be, is guaranteed or secured by or is extended on the order of a related party;2. any penalty charges for late payments and damages;3. any interest unrecognized for tax purposes on other grounds in this Act.4. (new, SG No. 110/2007) any interest and other expenses on loans which, according to accounting legislation, are capitalized as part of the value of an asset.(4) Where the accounting financial result before all expenses on interest payments and income from interest receivable is a negative quantity, the said result shall be ignored upon determination of the amount of expenses on interest payments unrecognized and recognized under Paragraphs (1) and (2).(5) The provisions of this Article shall apply in respect of any newly incurred expenses on interest payments, observing the sequence of the incurrence of the said expenses.(6) Paragraph (1) shall not apply where: DC1 shall be the debt capital as at the 1st day of January of the current year;DC2 shall be the debt capital as at the 31st day of December of the current year;OE1 shall be the owners' equity as at the 1st day of January of the current year;OE2 shall be the owners' equity as at the 31st day of December of the current year.(7) The expenses on interest payments incurred by credit institutions shall not be regulated according to the procedure established by Paragraphs (1) to (6).Chapter NineAMOUNTS INVOLVED UPON DETERMINATION OF TAX FINANCIAL RESULTSecurities Traded on Regulated MarketsArticle 44. Where the disposition of any shares and any negotiable rights attaching to shares in public companies, shares in and units of collective investment schemes, is effected on a regulated Bulgarian securities market, upon determination of the tax financial result the accounting financial result:1. shall be debited with the profit determined as a positive difference between the selling price and the documented cost of acquisition of the said securities, and2. shall be credited with the loss determined as a negative difference between the selling price and the documented cost of acquisition of the said securities.Subsequent Valuations Reserve in Respect of Assets which Are Not TaxDepreciable AssetsArticle 45. (Supplemented, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be credited with the value of the revaluation reserve (subsequent valuations reserve) written off upon the write-off of any assets which are not tax depreciable assets, where an accounting income or expense has not been accounted for upon the write-off of the said reserve. The said crediting shall be effected in the year of write-off of the asset. Where any land is transformed into investment property, the said crediting shall be effected in the year of write-off of the investment property.Tax Treatment of DebtsArticle 46. (1) (Amended, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be credited with the amount of the debts of the taxable person, and the said crediting shall be effected in the year in which one of the following circumstances occurs:1. the debts are extinguished by prescription, but not more than five years after the time when the debt became exigible;2. the bankruptcy proceedings against the taxable person have been closed by a confirmed plan for rehabilitation which provides for incomplete satisfaction of the creditors; the crediting shall be effected by the amount of the diminution in the debt;3. an effective judgement of court has decreed that the debt or part thereof is undue;4. the creditor has relinquished the claim thereof by a judicial procedure or has redeemed the said claim; the crediting shall be effected by the amount redeemed;5. before the lapse of the prescription period, the debts have been extinguished by virtue of a law;6. the taxable person has submitted a motion for expungement.(2) (Amended, SG No. 110/2007) Paragraph (1) shall not apply, where the debt was extinguished or accounting income were accounted for as a result of a write-off of the debt in the year of occurrence of a circumstance under Paragraph (1).(3) (New, SG No. 110/2007) Where Paragraph (1) was applied during a preceding year, upon determination of the tax financial result for the current year, the accounting financial result shall be debited with:1. the amount of the debt extinguished during the year;2. the accounting income accounted for during the current year as a result of a write-off of the debt.(4) (New, SG No. 110/2007) The debiting under Paragraph (3) shall be up to the amount of the crediting under Paragraph (1) during the preceding years in respect of the respective debt.Tax Treatment of Credit for Input Tax Deducted in Respectof Assets Available or upon Registration or Re-registrationunder Value Added Tax Act Article 47. (1) (Supplemented, SG No. 110/2007) Upon determination of the tax financial result, the accounting financial result shall be credited with the amount of the credit for input tax deducted by the taxable person in respect of the assets available as at the date of registration or re-registration under the Value Added Tax Act, where accounting income is not accounted for in connection with the credit for input tax deducted.(2) (Repealed, SG No. 110/2007). (3) (Amended, SG No. 110/2007) Paragraph (1) shall not apply where:1. the value added tax is not included in the historical cost of the asset, or2. the asset is not a tax depreciable asset and the said asset was written off in the year of registration or re-registration under the Value Added Tax Act. (4) (New, SG No. 110/2007) In case of a write-off of an asset which is not a tax depreciable asset and where to Paragraph (1) was not applied in a preceding year, upon determination of the tax financial result for the current year, the accounting financial result shall be debited with the amount of the credit for input tax deducted for the respective asset wherewith the accounting financial result has been credited according to the procedure established by Paragraph (1).Chapter TenTAX DEPRECIABLE ASSETSTax Depreciable AssetsArticle 48. Tax depreciable assets shall comprehend:1. the tax tangible fixed assets;2. the tax intangible fixed assets;3. the investment properties, with the exception of land;4. the subsequent expenses referred to in Article 64 herein.GoodwillArticle 49. (1) Goodwill generated as a result of a business combination shall not be a tax depreciable asset.(2) Any loss from impairment and upon write-off of goodwill shall not be recognized for tax purposes.Tax Tangible Fixed AssetsArticle 50. "Tax tangible fixed assets" shall be the amounts which satisfy the requirements for depreciable tangible fixed assets according to the National Financial Reporting Standards for Small and Medium-Sized Enterprises whose value equals or exceeds the lesser of:1. the value materiality threshold for the tangible fixed asset, as adopted in the accounting policies of the taxable person;2. (amended, SG No. 110/2007) seven hundred leva.Tax Intangible Fixed AssetsArticle 51. (1) "Tax intangible fixed assets" shall be:1. any acquired non-financial resources which:(a) have no physical substance;(b) are used during a period longer than twelve months;(c) have a limited useful life;(d) are of a value which equals or exceeds the lesser of:(aa) the value materiality thresholds for the tangible fixed asset, as adopted in the accounting policies of the taxable person;(bb) (amended, SG No. 110/2007) seven hundred leva;2. (repealed, SG No. 110/2007); 3. any amounts charged as a result of business transactions leading to an increase in the economic benefits flowing from a tax tangible fixed asset which is hired or provided for use; the said amounts shall not form a tax tangible fixed asset.(2) Any accounting expenses, accounted for in connection with the acquisition of a tax tangible fixed asset before the origination of the said asset, shall not be recognized for tax purposes in the year of accounting for the said expenses and shall be involved upon determination of the tax depreciable value of the said asset. Where any circumstances determining that the taxable person will not acquire the tax intangible fixed asset occur in a succeeding year, the unrecognized expenses referred to in sentence one shall be recognized for tax purposes in the year of occurrence of any such circumstances, if the requirements of this Act are complied with.Tax Depreciation ScheduleArticle 52. (1) Any taxable persons which form a tax financial result shall prepare and keep a tax depreciation schedule, posting therein all tax depreciable assets.(2) The tax depreciation schedule shall be a tax ledger wherein the information, specified according to the requirements of this Act, regarding the process of acquisition, subsequent keeping, depreciation and write-off of the tax depreciable assets, shall be posted.(3) The tax depreciation schedule shall contain, as a minimum, the following information on each tax depreciable asset:1. designation;2. month of commissioning;3. tax depreciable value;4. tax depreciation charged;5. tax value;6. annual rate of tax depreciation;7. annual tax depreciation;8. month of occurrence of any changes in the values of the asset and the circumstances necessitating the said changes;9. month of discontinuance and resumption of the charging of tax depreciations and the circumstances which necessitate the said discontinuance and resumption;10. month of write-off of the asset covered under Article 60 (3) herein for accounting purposes and the circumstances which necessitate the said write-off.11. month of write-off of the asset in the tax depreciation schedule.Values of Tax Depreciable AssetsArticle 53. (1) The "tax depreciable value" shall be the historical cost of the asset debited with the charged provisions and donations associated with the asset which are included in the said cost. In the cases referred to in Article 64 (1) and Article 67 herein, the tax depreciable value shall be the sum total of:1. the subsequent expenses: in the cases referred to in Article 64 (1) herein;2. the expenses unrecognized for tax purposes: in the cases referred to in Article 67 herein.(2) The "annual tax depreciation" shall be the depreciation charged in the tax depreciation schedule for the relevant year according to the requirements of this Chapter.(3) The "tax depreciation charged" shall be the sum total of the annual tax depreciations for the relevant asset. The tax depreciation charged may not exceed the tax depreciable value of the asset.(4) The "tax value" shall be the tax depreciable value of the asset debited with the tax depreciation charged for the said asset.Tax and Accounting DepreciationsArticle 54. (1) The tax depreciations, determined according to the procedure established by this Chapter, shall be recognized upon determination of the tax financial result.(2) (Supplemented, SG No. 110/2007) The accounting expenses on depreciation shall not be recognized for tax purposes. Upon determination of the tax financial result, the accounting financial result shall be credited with the accounting depreciations, regardless of whether the accounting for the said depreciations leads to a diminution in the accounting financial result for the year of accounting for the said depreciations.Tax Depreciable Asset CategoriesArticle 55. (1) Upon determination of the annual tax depreciations, tax depreciable assets shall be allocated to the following categories:1. Category I: solid buildings, including investment properties, plant, transmission facilities, electric power carriers, communication lines;2. Category II: machinery, process equipment, apparatus;3. Category III: means of transport excluding automobiles; surfacing of roads and of runways;4. (Supplemented, SG No. 110/2007) Category IV: computers, computer peripheral equipment, software, and right to use software, mobile telephones;5. Category V: automobiles;6. Category VI: tax tangible and intangible fixed assets whereof the period of use is restricted according to contractual relationships or a legal obligation;7. Category VII: all other depreciable assets.(2) The annual rate of tax depreciation shall be determined on a single occasion for the year and may not exceed the following amounts:Asset category Annual rate of tax depreciation (%)I 4II 30III 10IV 50V 25VI 100/years of legal restriction The annual rate may not exceed 33 1/3VII 15 (3) In respect of Category II assets, the annual rate of tax depreciation may not exceed 50 per cent, where the following conditions are simultaneously fulfilled:1. the assets form part of an initial investment;2. the assets are new as fabricated and have not been exploited prior to the acquisition thereof.(4) (Repealed, SG No. 110/2007). (5) (New, SG No. 110/2007) The acquisition of an asset through conclusion of a lease contract, classified as financial lease according to accounting legislation, shall be no grounds for allocation of the said asset to Category VI.Standard Procedure for Posting of Assets in Tax Depreciation ScheduleArticle 56. Tax depreciable assets shall be posted in the tax depreciation schedule at the tax depreciable value thereof.Specific Procedure for Posting of Assets in Tax Depreciation ScheduleArticle 57. (1) Any person, in respect of which the tax treatment changes as a result of which an obligation to form a tax financial result arises for the said person, shall prepare a tax depreciation schedule wherein the tax depreciable assets available at that time shall be posted at tax depreciable value and tax depreciation charged determined according to the procedure established by Paragraphs (2) and (3).(2) The tax depreciable value of any asset referred to in Paragraph (1) shall be determined by means of:1. crediting the historical cost of the said asset with the subsequent expenses incurred theretofore which, according to accounting legislation, lead to future economic benefits derived from the said asset;2. debiting the historical cost of the said asset with the charged provisions and donations associated with the said asset which are included in the said cost.(3) The tax depreciation charged for any asset referred to in Paragraph (1) shall be the accounting depreciation which would be charged theretofore on the historical cost of the said asset, adjusted according to the procedure established by Paragraph (2).(4) Any assets for which the tax depreciation charged equals or exceeds the tax depreciable value thereof shall not be posted upon preparation of the tax depreciation schedule.(5) Paragraphs (1) to (4) shall furthermore apply in the cases of re-posting of an asset in the tax depreciation schedule.Charging of Tax DepreciationsArticle 58. (1) (Supplemented, SG No. 110/2007) Tax depreciation shall commence to be charged as from the beginning of the month in which the tax depreciable asset is commissioned or as from the beginning of the next succeeding month. The date of commissioning must be supported by documents.(2) Where a procedure for commissioning is provided for in a statutory instrument, the asset may not be commissioned for tax purposes earlier than what is established in the statutory instrument.(3) The annual tax depreciation shall be arrived at according to the following formula: where:ATD shall be the annual tax depreciation;TDV shall be the tax depreciable value;ARTD shall be the annual rate of tax depreciation, determined by the taxable person according to Article 55 (2) and (3) herein;M shall be the number of months of the year during which tax depreciation is charged.Discontinuance of Charging of Tax DepreciationsArticle 59. (Amended, SG No. 110/2007, effective 1.01.2007) (1) Charging of tax depreciations shall be discontinued when the relevant asset is temporarily withdrawn from use (no economic benefit is derived there from) for a period not exceeding twelve months. Charging shall be discontinued as from the beginning of the month next succeeding the month during which the period referred to in sentence one elapsed and shall be resumed as from the beginning of the month of re-commissioning of the said asset. The tax depreciable asset shall not be written off in the tax depreciation schedule.(2) Upon determination of the tax financial result for the year during which the twelve-month period referred to in Paragraph (1) elapsed, the annual tax depreciation of the taxable person shall be debited with the amount of the tax depreciation charged for the asset during the twelve months during which the asset was withdrawn from use. The values of the tax depreciable asset at the date of discontinuance of the charging of tax depreciation shall be adjusted for the amount of the debiting under sentence one as follows:1. the tax depreciation charged for the asset shall be debited;2. the tax value of the asset shall be credited.(3) Any taxable person where against liquidation or bankruptcy proceedings are pending shall discontinue the charging of tax depreciations for those assets for which the charging of accounting depreciations is discontinued according to the requirements of accounting legislation. At the date of discontinuance of the charging of tax depreciations, Article 60 (5) herein shall apply, mutatis mutandis.(4) The charging of tax depreciations in respect of any assets covered under Article 60 (3) herein shall not be discontinued.Write-off of Assets in Tax Depreciation ScheduleArticle 60. (1) An asset shall be written off in the tax depreciation schedule where the said asset is completely depreciated for tax purposes.(2) Where an asset is written off for accounting purposes before being fully depreciated for tax purposes, the said asset shall be written off in the tax depreciation schedule at the beginning of the month during which the said asset is written off for accounting purposes.(3) Paragraph (2) shall not apply upon the write-off of any assets:1. (amended, SG No. 110/2007) which are completely depreciated for accounting purposes;2. as a result of an increase in the value materiality threshold.(4) Any assets referred to in Paragraph (3) shall be written off in the tax depreciation schedule according to the procedure established by Paragraph (1).(5) (Supplemented, SG No. 110/2007) Where any depreciable asset according to the National Financial Reporting Standards for Small and Medium-Sized Enterprises is transformed into a non-depreciable asset, with the exception of transformation into an investment property, the said asset shall be written off in the tax depreciation schedule as from the beginning of the current month. Sentence one shall not apply to any assets which are completely depreciated for accounting purposes and which are temporarily withdrawn from use (no economic benefit is derived there from).(6) Where a tax depreciable asset ceases to be used for an activity in respect of which a tax financial result is formed, the said asset shall be written off in the tax depreciation schedule as from the beginning of the current month.Retention of Values of Tax Depreciable AssetArticle 61. The values of the tax depreciable asset shall not change upon:1. any subsequent accounting valuation (revaluation and impairment);2. any change in accounting policy, including any change in the applicable accounting standards;3. any accounting errors applying to prior periods, with the exception of technical errors;4. registration or re-registration under the Value Added Tax Act .Change in Tax Depreciable Asset ValuesArticle 62. (1) A change in the values of the tax depreciable asset shall be effected upon occurrence of any circumstances necessitating such a change according to accounting legislation, with the exception of the cases covered under Article 61 herein.(2) The change in the values of the asset shall be shown in the tax depreciation schedule as at the 1st day of January of the year in which the circumstances necessitating the change have been ascertained. The tax depreciation schedule shall not be changed and the tax depreciation charged shall not be adjusted in respect of prior years.(3) The values of the tax depreciable asset after the change must equal the value which would be determined if the circumstances necessitating the change were known during the prior years.(4) Upon determination of the tax financial result, the annual tax depreciation of the asset for the current year shall be adjusted for the difference between the tax depreciation charged for the asset during the prior years and the annual tax depreciation which would be charged for the said years if the circumstances necessitating the change were known during the prior years.(5) Where the circumstances ascertained do not necessitate a change in the values of the asset for prior years, the change in the values shall be shown in the tax depreciation schedule as at the time of ascertainment of the circumstance during the current year.Subsequent Expenses Associated with Asset Availablein Tax Depreciation ScheduleArticle 63. The tax depreciable value of any asset which is available in the tax depreciation schedule shall be credited with any subsequent expenses which, according to accounting legislation, lead to future economic benefits associated with the tax depreciable asset. The tax depreciable asset shall be credited as from the beginning of the month during which the said subsequent expenses were incurred.Subsequent Expenses Associated with Asset Written Offin Tax Depreciation ScheduleArticle 64. (1) Where an asset has been written off in the tax depreciation schedule but has not been written off for accounting purposes, a separate tax depreciable asset shall be posted with the subsequent expenses which, according to accounting legislation, lead to future economic benefits associated with the said asset.(2) The tax depreciable asset referred to in Paragraph (1) shall be posted in the tax depreciation schedule as from the beginning of the month during which the subsequent expenses were completed.(3) For the purposes of Article 55 herein, the tax depreciable asset shall be allocated to the category to which the asset in connection with which the subsequent expenses have been incurred was allocated.(4) Where the asset in connection with which the subsequent expenses have been incurred is written off in the tax depreciation schedule before the tax depreciable asset referred to in Paragraph (1) is fully depreciated, the said asset shall be written off in the tax depreciation schedule under the terms and according to the procedure established by Article 60 herein.Income and Expenses from Subsequent Valuations of TaxDepreciable AssetsArticle 65. The accounting income and expenses from subsequent valuations of tax depreciable assets shall not be recognized for tax purposes.Adjustment of Accounting Financial Result upon Write-Offof Tax Depreciable AssetArticle 66. (1) Where an asset is written off in the tax depreciation schedule, upon determination of the tax financial result the accounting financial result shall be credited with the accounting carrying value of the asset.(2) Where an asset is written off in the tax depreciation schedule, upon determination of the tax financial result the accounting financial result shall be debited with the tax value of the asset.(3) Paragraphs (1) and (2) shall not apply:1. in the cases of unrecognized expenses on shrinkage of assets and associated claims, where the tax value exceeds the accounting carrying value of the said asset;2. upon write-off of an asset for the account of owners' equity, where the tax value exceeds the accounting carrying value of the said asset;3. upon write-off of an asset according to the procedure established by Article 60 (6) herein, where the tax value exceeds the accounting carrying value of the said asset;4. upon transformation of corporations and restructuring of cooperatives under Sections II and III of Chapter Nineteen herein.Accounting Expenses Forming Tax Depreciable AssetArticle 67. Any accounting expenses forming a tax depreciable asset, including any subsequent expenses, shall not be recognized for tax purposes.Income and Expenses Accounted for in Connection withDonation Associated with Tax Depreciable AssetArticle 68. Any accounting income and expenses, accounted for in connection with a donation wherewith the historical cost has been debited upon determination of the tax depreciable value of the asset, shall not be recognized for tax purposes.Specific Tax Treatment of Asset Formed as Resultof Development ActivityArticle 69. (1) Upon determination of the tax financial result, the taxable person shall have the right to debit the accounting financial result thereof with the historical cost of an intangible fixed asset on a single occasion in the year of formation of the said result, where the following conditions are simultaneously fulfilled:1. the asset has been formed as a result of development activity;2. the development activity has been carried out in connection with the activity carried out by the taxable person as a regular business;3. the development activity has been commissioned under market conditions to a scientific research institute or a higher school.(2) Where the taxable person has exercised the right thereof under Paragraph (1), the intangible fixed asset accounted for under Paragraph (1) shall not be a tax depreciable asset.Chapter ElevenCARRY-FORWARD OF TAX LOSSGeneral DispositionsArticle 70. (1) Taxable persons shall have the right to carry forward the tax loss formed according to the procedure established by this Part. Where a taxable person has elected to carry forward the tax loss, the said loss shall mandatorily be carried forward successively until the depletion thereof during the next succeeding five years.(2) The taxable person shall exercise the right thereof to election by means of deduction of the tax loss during the first year after incurrence of a tax loss, during which the said person has formed a positive tax financial result before deduction of the tax loss. Where the taxable person has not formed a positive tax financial result before deduction of the tax loss until the date of tax control, the person shall be presumed to have exercised the right thereof to election in respect of carry-forward of a tax loss.Procedure for DeductionArticle 71. (1) A tax loss shall be deducted upon determination of the tax financial result within the amount of the positive tax financial result before deduction of the tax loss. Where the tax loss is less than the positive tax financial result before deduction of the tax loss, the full amount of the said loss shall be deducted upon determination of the tax financial result.(2) The tax loss shall furthermore be deducted upon determination of the quarterly prepayments of corporation tax.Newly Incurred Tax LossesArticle 72. The provisions of this Chapter shall apply in respect of any newly incurred tax losses, observing the sequence of incurrence of the said losses. In respect of each of the newly incurred tax losses, the five-year-period shall begin to run from the year next succeeding the year of incurrence of the said losses.Loss from Source Outside Bulgaria upon Application of Exemption withProgression MethodArticle 73. (1) Any tax loss, formed during the current year in a State wherewith the Republic of Bulgaria has concluded a convention for the avoidance of double taxation and the method of avoidance of double taxation with respect to profits is exemption with progression, shall not be deducted from the tax profits from a source inside the country or other States during the current of succeeding years.(2) The tax loss referred to in Paragraph (1) shall be deducted in compliance with the requirements of this Chapter successively solely from the tax profits from the source outside Bulgaria from which the said loss has been incurred during the next succeeding five years.(3) Upon cessation of the activity of a permanent establishment in a Member State of the European Community or of the European Economic Area, any tax losses from a permanent establishment which have not been carried forward and have not been recovered shall be carried forward according to the standard procedure established by this Act until lapse of the five-year period since the incurrence of the said losses.Loss from Source Outside Bulgaria upon Application of Credit MethodArticle 74. (1) Where a taxable person has formed a tax loss and the said loss or a part thereof has its source outside Bulgaria in respect of which source the credit method for avoidance of double taxation is applied, the loss which is not deducted during the current year shall be deducted during the next succeeding five years in compliance with the requirements of this Chapter successively solely from the tax profits from the source outside Bulgaria from which the said loss has been incurred.(2) Where the tax loss for the year has not been formed from a single source (foreign State or the country), the said loss shall be allocated for the purposes of Paragraph (1) among the States from which the said loss has originated according to the following formula: where:A shall be the part of the tax loss incurred by the taxable person for the year, allocated to the relevant source (foreign State or the country);B shall be the tax loss formed by the taxable person for the year;C shall be the tax loss formed from the relevant source (foreign State or the country);D shall be the sum total of the tax losses formed from all sources (foreign States and the country).(3) Paragraph (1) shall not apply to any losses from a source within a Member State of the European Community or of the European Economic Area.Chapter TwelveACCOUNTING ERRORSCorrection of Accounting ErrorsArticle 75. (1) Upon detection, during the current year, of any accounting error related to prior years, the tax financial results for the relevant prior years shall be corrected according to the requirements of the laws effective during the relevant prior years in a way as if the said error was nor made.(2) Upon determination of the tax liability on the tax financial result for a prior year as corrected under Paragraph (1), the rate of tax for the relevant prior year shall be applied.(3) (Amended, SG No. 110/2007) Upon assessment of the annual corporation tax due for the current year, the annual corporation tax for the current year shall be adjusted for the difference between the tax liability before and after the correction as a result of the error.(4) Where, as a result of an error detected, it is established that the taxable person has continued to form a tax depreciable asset for the relevant prior year, an annual tax depreciation equal to the accounting depreciation shall be recognized upon determination of the tax financial results for the prior years, which may not exceed the annual tax depreciation which would be charged if the maximum permissible annual rates of tax depreciation under Article 55 herein were used. The tax depreciable asset shall be posted in the tax depreciation schedule as at the 1st day of January of the year of detection of the error at the tax depreciable value of the said asset and the tax depreciation charged under sentence one.(5) The temporary tax difference which would originate during a prior year if the error was not made shall be considered as having originated during the relevant prior year and shall be recognized for tax purposes according to the standard procedure established by this Act.(6) Paragraphs (1) to (3) shall not apply to any errors made more than five years before the current year which, if not made, would have led to a diminution in the tax financial result for the relevant prior year.(7) All accounting income and expenses, accounted for during the current year in connection with a detected accounting error from prior years, shall not be recognized for tax purposes.Specific Cases of Correction of Accounting ErrorsArticle 76. Where, after correction of the tax financial result under Article 75 (1) herein, a tax loss for the relevant prior period is incurred or changes, the provisions of Chapter Eleven herein shall apply. The tax financial results for the years from the making of the error until the detection thereof shall be corrected according to the procedure established by Article 75 herein in such a way as if the error was not made. The year during which the error was made shall be considered a year of incurrence of the tax loss.Expenses Accounted for in Breach of Accounting LegislationArticle 77. (1) Any expenses accounted for in breach of accounting legislation shall not be recognized for tax purposes in the year of accounting for such expenses.(2) The expenses unrecognized for tax purposes, referred to in Paragraph (1), shall be recognized for tax purposes where this is permissible under this Act and in compliance with the requirements of this Chapter.Income and Expenses Unaccounted for According to Procedure Establishedby Statutory InstrumentArticle 78. Upon determination of the tax financial result, the accounting financial result shall be corrected by the amount of income and expenses which should have been accounted for during the current year according to the requirements of a statutory instrument but which were not accounted for by the taxable person. Where any accounting income and expenses are subsequently accounted for in connection with a business transaction under sentence one, the said income and expenses shall not be recognized for tax purposes.Accounting Errors Related to Tax Depreciable AssetsArticle 79. This Section, with the exception of Article 75 (4) and (7) herein, shall not apply in respect of any accounting errors related to tax depreciable assets.Default InterestArticle 80. Default interest according to the standard procedure shall furthermore be due upon application of Article 75 herein. The interest shall be due as from the date on which the corporation tax for the relevant prior year should have been remitted.Corrections of Errors Detected upon Tax ControlArticle 81. The provisions of this Chapter, with the exception of Article 75 (3) herein, shall furthermore apply in the cases of errors detected upon tax control.Chapter ThirteenCHANGE IN ACCOUNTING POLICIESAdjustment upon Change in Accounting PoliciesArticle 82. (1) Where the accounting policies change, upon determination of the tax financial result, the accounting financial result for the current year shall be adjusted in the manner and by the amount whereby the tax financial results for the prior years would have been adjusted if the changed accounting policies were applied during the said years.(2) The temporary tax differences, which have originated according to the accounting policies applied before the change, shall be considered as not having originated.(3) In case the changed accounting policies have been applied during the prior years and temporary tax differences would have originated as a result of this, the said differences shall be considered as having originated and shall be recognized according to the standard procedure established by this Act.(4) Any accounting income and expenses, accrued and incurred as a result of changed accounting policies, shall not be recognized for tax purposes.(5) (Amended, SG No. 110/2007, effective 1.01.2007) Paragraphs (1) to (3) shall not apply upon any change in accounting policies related to tax depreciable assets.(6) No default interest shall be due upon any change in accounting policies where the effect of the said change leads to an increase in the tax financial result.Chapter FourteenTAX PREPAYMENTSGeneral DispositionsArticle 83. (1) (Redesignated from Article 83, SG No. 110/2007) Any taxable person shall make monthly or quarterly prepayments of corporation tax.(2) (New, SG No. 110/2007) Prepayments shall not be made by:1. any taxable persons whose net turnover for the last preceding year does not exceed BGN 200,000;2. any newly incorporated taxable persons, for the year of the incorporation thereof, with the exception of any such persons newly incorporated as a result of a transformation under the Commerce Act. Monthly Tax PrepaymentsArticle 84. Monthly tax prepayments shall be made by any taxable person which has formed a tax profit for the last preceding year.Quarterly Tax PrepaymentsArticle 85. Quarterly tax prepayments shall be made by any taxable person which is under no obligation to make monthly tax prepayments.Determination of Monthly Tax PrepaymentsArticle 86. (1) (Redesignated from Article 86, SG No. 110/2007) The monthly tax prepayments shall be determined according to the following formula: where:PRMONTHLY shall be the monthly tax prepayment;PD shall be the tax profit declared for the year before the last preceding year (upon determination of monthly tax prepayments for the period from the 1st day of January until the 31st day of March) or the tax profit declared for the last preceding year (upon determination of monthly tax prepayments for the period commencing on the 1st day of April and ending on the 31st day of December);k shall be the coefficient reflecting changes in the economic conditions for the current year, as endorsed by the State Budget of the Republic of Bulgaria Act for the relevant year;RT shall be the rate of corporation tax.(2) (New, SG No. 110/2007) Where the tax profit for the last preceding year exceeds the tax profit for the year before the last preceding year, the monthly tax prepayment for April shall be determined by crediting the monthly tax prepayment, calculated according to the procedure established by Paragraph (1) for the period commencing on the 1st day of April and ending on the 31st day of December, with the amount determined according to the following formula:A = 3 x (PR2 - PR1),where:A shall be the amount credited;PR1 shall be the monthly tax prepayment for the period commencing on the 1st day of January and ending on the 31st day of March, calculated according to the procedure established by Paragraph (1);PR2 shall be the monthly tax prepayment for the period commencing on the 1st day of April and ending on the 31st day of December, calculated according to the procedure established by Paragraph (1).The same procedure shall furthermore apply to the determination of the monthly tax prepayment for April in the cases where the taxable person:1. was incorporated during the last preceding year, or2. formed a tax loss for the year before the last preceding year, or3. did not form a tax financial result for the year before the last preceding year.(3) (New, SG No. 110/2007) Where the tax profit for the year before the last preceding year exceeds the tax profit for the last preceding year, the monthly tax prepayment for April shall be determined by debiting the monthly tax prepayment, calculated according to the procedure established by Paragraph (1) for the period commencing on the 1st day of April and ending on the 31st day of December, with the amount determined according to the following formula:B = 3 x (PR2 - PR1)where:B shall be the amount debited;PR1 shall be the monthly tax prepayment for the period commencing on the 1st day of January and ending on the 31st day of March, calculated according to the procedure established by Paragraph (1);PR2 shall be the monthly tax prepayment for the period commencing on the 1st day of April and ending on the 31st day of December, calculated according to the procedure established by Paragraph (1).Where the amount debited exceeds the monthly tax prepayment calculated according to the procedure established by Paragraph (1) for the period commencing on the 1st day of April and ending on the 31st day of December, the monthly tax prepayment for April shall be zero, and the excess shall be deducted from the following monthly tax prepayments for the current year upon determination of the amount of the said tax prepayments.Determination of Quarterly Tax PrepaymentsArticle 87. The quarterly tax prepayments shall be determined according to the following formula: where:PRQUARTERLY shall be the monthly tax prepayment;TP shall be the tax profit for the period from the beginning of the year until the end of the quarter for which the quarterly tax prepayment is determined;RT shall be the rate of corporation tax;PRREMITTED shall be the tax prepayments remitted from the beginning of the year until the end of the quarter for which the quarterly tax prepayment is determined.Declaration on Reduction of Tax PrepaymentsArticle 88. (1) The taxable persons may submit a declaration in a standard form on reduction of tax prepayments when the said persons assume that the said prepayments will exceed the annual corporation tax due.(2) The reduction of tax prepayments shall be enjoyable after submission of the declaration.Interest upon Excessive Reduction of Tax PrepaymentsArticle 89. (1) Where the taxable person has reduced the tax prepayments thereof according to the procedure established by Article 88 herein and the annual corporation tax due exceeds the tax prepayments due for the relevant year by more than 10 per cent, interest shall be due.(2) The amount whereon interest is due under Paragraph (1) shall be arrived at as a difference between the annual corporation tax due and the tax prepayments due for the year. Where the sum total of the tax prepayments for the year, as determined according to the procedure established by Article 86 or 87 herein, is less than the annual corporation tax due, the said prepayments shall be taken into consideration instead of the annual corporation tax upon determination of the difference referred to in sentence one.(3) For the purpose of calculation of the interest referred to in Paragraph (1), the amount referred to in Paragraph (2) shall be allocated to the relevant months/quarters during which a reduced tax prepayment has been declared according to Article 88 herein. The part of the amount referred to in Paragraph (2), as allocated to the relevant month/quarterly, shall be arrived at according to the following formula: where:A shall be the part of the amount whereon interest is due, allocated to the relevant month/quarter during which a reduced tax prepayment has been declared according to Article 88 herein;B shall be the tax prepayment as determined according to the procedure established by Article 86 or 87 herein for the relevant month/quarter;C shall be the tax prepayment due for the relevant month/quarter;D shall be the aggregate amount whereon a default interest is due, as determined according to the procedure established by Paragraph (2);E shall be the sum total of the tax prepayments for the year, as determined according to the procedure established by Article 86 or 87 herein;F shall be the sum total of the tax prepayments due for the year.(4) "Tax prepayment due," within the meaning given by this Article, shall be:1. a tax prepayment as determined according to the procedure established by Article 86 or 87 herein: applicable to the tax prepayments before submission of the declaration on reduction of tax prepayments according to the procedure established by Article 88 herein;2. the reduced tax prepayment as determined by the declaration on reduction of tax prepayments according to the procedure established by Article 88 herein: applicable to the tax prepayments after submission of the declaration on reduction of tax prepayments according to the procedure established by Article 88 herein.(5) The interest referred to in Paragraph (1) in respect of the relevant tax prepayment shall be determined according to the Interest on Taxes, Fees and Other State Receivables Act and shall be charged as from the date on which the tax prepayment became exigible and until the date of remittance of the annual corporation tax, but not later than the 31st day of March of the next succeeding year.Remittance of Tax PrepaymentsArticle 90. (1) Monthly tax prepayments shall be remitted on or before the 15th day of the month to which the said prepayments apply.(2) Quarterly tax prepayments shall be remitted on or before the 15th day of the month next succeeding the quarter to which the said prepayments apply. No quarterly tax prepayment shall be made for the fourth quarter.Retention of Tax PrepaymentsArticle 91. Any taxable person which is allowed to retain corporation tax for the current year shall furthermore be allowed to retain the relevant portion of the tax prepayments due in proportion to the amount of the retention.Chapter FifteenCORPORATION TAX DECLARING AND REMITTANCEDeclaring of Corporation TaxArticle 92. (1) Any taxable persons which are liable to corporation tax shall submit an annual tax return in a standard form regarding the tax financial result and the annual corporation tax due.(2) The annual tax return shall be submitted on or before the 31st day of March of the next succeeding year at the National Revenue Agency territorial directorate exercising competence over the place of registration of the taxable person.(3) The annual financial statement, including the notes thereon, shall be submitted together with the annual tax return. Any enterprises whereof the annual financial statements are subject to mandatory financial audit according to the Accountancy Act , shall furthermore submit a copy of the report under the Independent Financial Audit Act . If the independent financial audit has not been completed by the 31st day of March of the next succeeding year, the auditor's report shall be submitted additionally but not later than the 30th day of June of the next succeeding year, together with a copy of the annual financial statement as certified by a registered auditor.(4) Where any divergence exists between the annual financial statement as submitted and the annual tax return and the annual financial statement as certified by the registered auditor which leads to a change in the tax financial result as already declared, the taxable person shall submit an adjusting return according to the procedure established by Paragraph (2) on or before the 30th day of June of the next succeeding year, declaring inter alia the reasons for the divergences.(5) A rate rebate of 1 per cent of the annual corporation tax due but not more than BGN 1,000 shall be enjoyable by any taxable person which submits an annual tax return and the annual financial statement thereof on or before the 31st day of March of the next succeeding year by electronic means and which remits the corporation tax on or before the same date.Tax RemittanceArticle 93. Any taxable person shall remit the corporation tax for the relevant year on or before the 31st day of March of the next succeeding year after deduction of the tax prepayments remitted for the relevant year.Overremitted TaxArticle 94. (1) Any overremitted corporation tax may be deducted from succeeding tax prepayments and annual payments of the same tax as from the 1st day of January of the year next succeeding the year for which the corporation tax was overremitted.(2) Where after submission of the annual tax return it is established that the taxable person has groundlessly deducted corporation tax, interest shall be due on any unremitted tax prepayments.Chapter SixteenFINANCIAL INSTITUTIONSIncome and Expenses Determined by Regulatory AuthorityArticle 95. Where there exists any divergence between the amount of income or expenses as accounted for according to the accounting policies of a financial institution and the amount as determined by a regulatory authority according to a statutory instrument, the amount as determined according to the special statutory instrument shall be recognized upon determination of the tax financial result.Income and Expenses from Subsequent Valuations (Revaluations andImpairments) of Financial AssetsArticle 96. Any income and expenses from subsequent valuations of financial assets and liabilities, accounted for by financial institutions, shall be recognized for tax purposes in the year of accounting for the said income and expenses. Financial institutions shall not apply Articles 34, 35 and 37 herein in respect of the financial assets and liabilities.Subsequent Valuations of Financial Assets and Liabilities RecognizedDirectly in Owners' EquityArticle 97. (1) Upon determination of the tax financial result of financial institutions, the accounting financial result thereof shall be credited with any profits from subsequent valuations of financial assets and liabilities, recognized during the current year directly in the owners' equity thereof.(2) Upon determination of the tax financial result of financial institutions, the accounting financial result thereof shall be debited with any losses from subsequent valuations of financial assets and liabilities, recognized during the current year directly in the owners' equity thereof.(3) (Amended, SG No. 110/2007) Any profits and losses recognized during the current year in the profit-and-loss account (income statement), which were involved upon determination of the tax financial result according to the procedure established by Paragraphs (1) and (2), shall not be recognized for tax purposes.Chapter SeventeenSPECIFIC RULES FOR DETERMINATION OF TAX FINANCIALRESULT OF COOPERATIVESProducer and Consumer DividendsArticle 98. (1) "Producer dividends" shall be the amounts which are distributed for output produced by cooperative members and sold to the cooperative. Any such dividends shall be determined on the basis of the profit corresponding to the output sold, whether before of after the processing of the said output.(2) "Consumer dividends" shall be the amounts which are distributed for consumer goods purchased by cooperative members from the cooperative. Any such dividends shall be determined on the basis of the profit arising from the difference between the selling price, whereat the cooperative has sold the goods, less the distribution costs thereof, and the price paid by the cooperative for acquisition of the said goods.Tax Treatment of Producer and Consumer DividendsArticle 99. (1) Upon determination of the tax financial result, the accounting financial result shall be debited with the producer and consumer dividends paid to cooperative members until the 25th day of March of the next succeeding year, which are covered by the balance-sheet profit. The debiting referred to in sentence one shall be effected up to the amount of the positive accounting financial result.(2) Any producer and consumer dividends paid to cooperative members shall be accounted for as accounts receivable and shall be excluded upon determination of the accounting financial result.(3) Where the cooperative has reported, for the relevant year, a balance-sheet loss or a balance-sheet profit insufficient to cover the producer and consumer dividends paid during the year, the amount of the producer and consumer dividends paid during the year and uncovered shall be accounted for as an accounting expense which is not recognized for tax purposes. For more information visit www.solicitorbulgaria.com id: 334 Mon, 04 Aug 2008 06:30:50 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-1 http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-1 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/CORPORATE_INCOME_TAX_ACT.JPG EUR http://web.solicitorbulgaria.com/index.php/bulgarian-corporate-income-tax-act-part-1 legal 80 negotiable Bulgarian Local Taxes and Fees Act, part 2 info@solicitorbulgaria.com (SolicitorBulgaria) Section IXGrave Plots LeaseArticle 120. (1) (Supplemented, SG No. 119/2002) A lump-sum fee for the lease of grave plots for a period exceeding eight years shall be charged as follows:1. (amended, SG No. 119/2002) for a period of up to 15 years;2. (amended, SG No. 119/2002) in perpetuity;3. (amended, SG No. 119/2002) for use of family grave plots:(a) (repealed, SG No. 119/2002);(b) (repealed, SG No. 119/2002);4. for undersize grave plots adjoined in accordance with the cemetery regulation plan: the proportionate part of the lease as set for the grave plot.(2) A rate rebate of 50 per cent of the fees covered under Items 1 and 2 of Paragraph (1) shall apply to urn sites.Article 121. The fees shall be collected by the competent offices of the municipality operating the landscaped cemetery.Section XFees for Physical Protection and Field Keeping of AgriculturalPropertiesArticle 122. (Repealed, SG No. 109/2001).Chapter FourADMINISTRATIVE PENALTY PROVISIONSArticle 123. (1) (Amended, SG No. 102/2000)… For more information visit http://www.solicitorbulgaria.com id: 337 Section IXGrave Plots LeaseArticle 120. (1) (Supplemented, SG No. 119/2002) A lump-sum fee for the lease of grave plots for a period exceeding eight years shall be charged as follows:1. (amended, SG No. 119/2002) for a period of up to 15 years;2. (amended, SG No. 119/2002) in perpetuity;3. (amended, SG No. 119/2002) for use of family grave plots:(a) (repealed, SG No. 119/2002);(b) (repealed, SG No. 119/2002);4. for undersize grave plots adjoined in accordance with the cemetery regulation plan: the proportionate part of the lease as set for the grave plot.(2) A rate rebate of 50 per cent of the fees covered under Items 1 and 2 of Paragraph (1) shall apply to urn sites.Article 121. The fees shall be collected by the competent offices of the municipality operating the landscaped cemetery.Section XFees for Physical Protection and Field Keeping of AgriculturalPropertiesArticle 122. (Repealed, SG No. 109/2001).Chapter FourADMINISTRATIVE PENALTY PROVISIONSArticle 123. (1) (Amended, SG No. 102/2000) Any person, who or which fails to submit a tax return under Article 14 herein in due time, or who fails to state or misstates any particulars or circumstances leading to underassessment of the tax or to exemption from tax, shall be liable to a fine of BGN 10 or exceeding this amount but not exceeding BGN 400 (if a natural person) or, if a legal person, to a pecuniary penalty of BGN 100 or exceeding this amount but not exceeding BGN 1,000, unless subject to a severer sanction.(2) (Amended, SG No. 102/2000) Any manager and accountant of an enterprise shall be liable to a fine of BGN 20 or exceeding this amount but not exceeding BGN 200 for any failure to submit a tax return referred to in Article 17 herein in due time, as well as for stating untrue particulars which have led to underassessment of the tax.(3) (New, SG No. 109/2001, amended, SG No. 119/2002) Any person, who or which shall declare any particulars and circumstances leading to reduction of or exemption from fee, will be liable to a fine of BGN 50 or exceeding this amount but not exceeding BGN 200 (if a natural person) or, if a legal person, to a pecuniary penalty of BGN 100 or exceeding this amount but not exceeding BGN 500.Article 124. (1) (Amended, SG No. 153/1998) Any heir or legatee or a legal representative thereof, who fails to submit a declaration under Article 32 herein in due time, or who fails to declare or shall misdeclare any property acquired by succession, shall be liable to a fine of BGN 10 or exceeding this amount but not exceeding BGN 500.(2) (Repealed, SG No. 153/1998).(3) For any violation under Article 41 herein, the offenders shall be liable to a fine of BGN 20 or exceeding this amount but not exceeding BGN 20.Article 125. Any party to an acquisition of property by gift or for a consideration, who conceals part of the price, shall be liable to a fine equivalent to double the amount of the tax due on the concealed part.Article 126. (Repealed, SG No. 119/2002).Article 126a. (New, SG No. 110/2007) (1) Any person, who fails to submit a tax return under Article 61m or who submits any such return past the due date, shall be liable to a fine not exceeding BGN 500, unless subject to a severer sanction.(2) Any person, who fails to state or who misstates any particulars or circumstances under Article 61m a return leading to underassessment of a licence tax or to exemption from a licence tax, shall be liable to a fine not exceeding BGN 1,000, unless subject to a severer sanction.Article 127. (1) (Redesignated from Article 127, SG No. 109/2001, amended, SG No. 119/2002) For any failure to comply with the provisions of this Act other than in the cases covered under Articles 123, 124 and 125 herein, the offenders shall be liable to a fine of BGN 20 or exceeding this amount but not exceeding BGN 200 (if natural persons) or, if legal persons and sole traders, to a pecuniary penalty of BGN 100 or exceeding this amount but not exceeding BGN 500.(2) (New, SG No. 109/2001) Default on payment of any taxes and fees under this Act shall not be treated as an administrative infraction.Article 128. (Amended, SG No. 103/1999) (1) (Amended, SG No. 109/2001, SG No. 119/2002, SG No. 112/2003, SG No. 100/2005) The written statements ascertaining any violations shall be drawn up by the municipal administration officers, and the penalty decrees shall be issued by the municipality mayor or by officials thereby authorized. authorized.(2) (New, SG No. 119/2002, supplemented, SG No. 112/2003, repealed, SG No. 100/2005). (3) (Amended, SG No. 109/2001, renumbered from Paragraph (2), SG No. 119/2002) The ascertainment of violations, the issuance, appeal against and execution of the penalty decrees shall follow the procedure established by the Administrative Violations and Sanctions Act. (4) (New, SG No. 112/2003, amended, SG No. 100/2005) The proceeds from fines and pecuniary penalties under penalty decrees issued by a municipality mayors shall be credited in revenue to the municipal budget.SUPPLEMENTARY PROVISION 1. Within the meaning given by this Act:1. (Amended, SG No. 109/2001) "Enterprises" shall be the persons within the meaning given by the Accountancy Act. 2. "Main residence" shall be the corporeal immovable serving to satisfy the housing needs of the individual and the members of the family thereof during the predominant part of the year.3. "Family" shall be the spouses, as well as the children thereof who have not attained the age of 18 years and who are not married.4. "Agricultural producers" shall be natural or legal persons, who or which produce agricultural produce for sale on the market.5. "Fair market value" shall be the price, net of taxes and fees, which would have been paid under the same terms for a similar corporeal immovable or another thing between persons who or which are not connected. The amount of rebate or reduction shall be excluded from the market value.6. (Amended, SG No. 153/1998, SG No. 105/2005) "Connected persons" shall be the persons within the meaning given by Item 3 of 1 of the Supplementary Provisions of the Tax and Social Insurance Procedure Code. 7. (Amended, SG No. 153/1998, supplemented, SG No. 109/2001) "Household waste" shall be waste resulting from the life activities of people at home, yards, and at office, social and public buildings. Waste from distributive- trade establishments and accessory handicraft activities, enterprises, recreational and entertainment establishments shall be subsumed under household waste where not having the nature of hazardous waste and where, concurrently, the amount or composition thereof will not impede their treatment with household waste.8. "Bulky household waste" shall be the household waste which, on account of the size or weight thereof, cannot be deposited in the receptacles provided for deposition of household waste, or presents difficulty upon loading.9. "Household waste receptacles" shall be garbage containers, dust bins and litter bins provided in public places wherein household waste is deposited, as well as polyethylene bags for separated collection.10. "Scheduled bus lines" shall be the transport services performed along a fixed route and according to a fixed schedule.11. "Personal income" shall be all income of individuals with the exception of:(a) (amended, SG No. 119/2002, SG No. 112/2003) the assisted living supplement, paid to persons who have lost more than 90 per cent of the working capacity thereof and who are entitled to assisted living;(b) the sums which the residents of public care homes receive as remuneration in occupational therapy;(c) the target assistance granted by an act of the Council of Ministers;(d) the humanitarian donations made to residents of public care home and beneficiaries of other forms of social services;(e) (new, SG No. 119/2002) the lump-sum supplements paid to pensions by decision of the Council of Ministers.12. (New, SG No. 109/2001, amended, SG No. 106/2004) "Adjoining ground", within the meaning given by Article 10 (3) herein, shall be the developed yard (the permissible building development as determined) excluding the developed surface area. In cases where no such ground has been determined according to the procedure required by the law, the developed surface area and the adjoining ground shall be presumed to equal 10 per cent of the surface space of the immovable.13. (New, SG No. 109/2001, repealed, SG No. 45/2002).14. (New, SG No. 109/2001, repealed, SG No. 106/2004). 15. (New, SG No. 119/2002) "Full amount of expenses" shall comprehend all expenses incurred by the municipality on provision of the services, including the relevant costs of: wages, salaries and social and health insurance contributions of the staff; cost of supplies, overhead costs, consulting; costs of management and control; costs of collection of the fee and other costs relevant to the formation of the amount of the fee, determined specifically by the Municipal Council.16. (New, SG No. 119/2002) "Base" for assessment of the household waste fee shall be an objective parameter in value expression, on the basis of which the proportional fee is determined in per cent or per mille terms, or a physical parameter, on the basis of which the fee is determined per unit (e. g. BGN/person, BGN/cubic metre consumed water etc.).17. (New, SG No. 119/2002) "Book value" shall be the value of the asset upon accounting recognition or the devalued/revalued value of the asset, where a valuation has been made after the initial accounting recognition.18. (New, SG No. 112/2003) "Destroyed transport vehicles" shall be the transport vehicles accepted for dismantling and storage at the places designated for this, and the transport vehicles which are not subject to reconditioning.19. (New, SG No. 112/2003, amended, SG No. 103/2005) "Insured value" of a motor vehicle shall be the market price at which another property of the same type and quality can be purchased in lieu of the insured property at the time of issuance of the certificate of the insured value of the thing.20. (New, SG No. 112/2003) "Value assessed according to accounting data" under Item 6 of Article 33 (1) herein shall be the balance-sheet value of the assets net of the balance-sheet value of the liabilities of the enterprise.21. (New, SG No. 106/2004) "Lots" shall be the lots as defined within the meaning given by Item 2 of 5 of the Supplementary Provisions of the Spatial Development Act. 22. (New, SG No. 106/2004) "Motor vehicles imported as new", within the meaning given by Article 44 (3) of this Act, shall be the motor vehicles in respect of which the following conditions are simultaneously fulfilled:(a) not more than six months have lapsed since the date of the initial registration thereof (including the initial registration abroad);(b) the said vehicles have covered not more than 6,000 kilometres.23. (New, SG No. 110/2007) "Turnover", for the purposes of levy of a licence tax, shall be the sum total of all sales (of output, goods, services and other sales) from economic activity effected during the year, less the value added tax and/or the excise duties, in the cases where the persons are registered under the Value Added Tax Act and/or are obligated to charge excise duty under the Excise Duties and Tax Warehouses Act. 24. (New, SG No. 110/2007) "Establishment", for the purposes of levy of a licence tax, shall be any place, premise and/or facility, including such in the open air, where an activity covered under Annex 4 hereto is carried out, including:(a) collective tourist accommodation establishments and supplementary tourist accommodations;(b) mass-catering and entertainment establishments;(c) retail shops, open-air stalls, tables at markets, on pavements and in street roadways;(d) studios, workshops and other premises, regardless of whether serving for other purposes as well or being part of an immovable property.25. (New, SG No. 110/2007) "Workplace" shall be an adapted part of an establishment equipped for the performance of a specified type of activity or service by a single person.26. (New, SG No. 110/2007) "Amusement arcade machines" shall be gambling slot-machines without prizes, intended for amusement and recreation, which allow a specified time for use or play on the machine for the price of a game.27. (New, SG No. 110/2007) "Collective tourist accommodation establishments" and "supplementary tourist accommodations" shall be the respective tourism establishments referred to in Items 1 and 2 of Article 3 (3) of the Tourism Act. 28. (New, SG No. 110/2007) "Net selling space" shall be the space in the relevant distributive trade establishment, including the stands, which is accessible to customers.29. (New, SG No. 110/2007) "Mass-catering and entertainment establishments" shall be the respective tourism establishments referred to in Item 3 of Article 3 (3) of the Tourism Act. 30. (New, SG No. 110/2007) "Refreshment bars, kiosks and caravans" shall be drinking establishments serving a limited range of mostly pre-packaged goods, cold and hot snacks, bakery products and sugar confectionery, beer, hot and soft drinks, and a limited range of alcoholic drinks.31. (New, SG No. 110/2007) "Piece of equipment", in connection with the application of Item 35 of Annex 4 hereto, shall be each particular device (machine) which is used directly in the activity (a washing machine, an ironing press, a drying machine and other such).TRANSITIONAL AND FINAL PROVISIONS 2. (1) (Amended, SG No. 103/1999) Any taxable person referred to in Article 11 herein shall submit a tax return on each corporeal immovable to the municipality exercising competence over the situs of the said property care of the municipality exercising competence over the place of residence of the said person not later than the 31st day of May 1998.(2) (Amended, SG No. 103/1999) Any individuals, who have no place of residence within the territory of the Republic of Bulgaria, shall submit a tax return to the Sofia Regional Tax Directorate.(3) Any individuals, who submit a tax return on or before the 31st of March 1998, shall enjoy an additional rate rebate of 5 per cent of the amount of the immovable property tax due for 1998. 3. (1) (Amended, SG No. 83, SG No. 105/1998) Individuals shall pay the immovable property tax and the household waste fee for 1998 as follows: 50 per cent not later than the 30th day of September, 25 per cent not later than the 31st day of October, and 25 per cent not later than the 30th day of November.(2) (Amended, SG No. 83, amended and supplemented, SG No. 105/1998) Any individuals who have paid the entire amount of the immovable property tax and household waste fee due for 1998 not later than the 30th day of September shall enjoy a rate rebate of 5 per cent. The same rate rebate shall apply to any individuals who have received a notice after the said date if they pay the entire amount of the immovable property tax and household waste fee within 30 days after receipt of the said notice. No penalty interest shall be chargeable within the same time period.(3) The additional tax for 1998 shall be paid not later than the 30th day of November. 4. This Act shall furthermore apply, if extending a more favourable treatment, in respect of any succession which has opened prior to the entry thereof into force, should a declaration have been submitted within the time limit established under Article 32 herein but no inheritance tax has been charged on the succession. 5. In the Succession Act (promulgated in the State Gazette No. 22/1949; corrected in No. 41/1949; amended in No. 275/1950, No. 41/1985, No. 60/1992; (modified by) Constitutional Court Judgment No. 4/1996, (promulgated in) No. 21/1996; amended in No. 104/1996), there shall be inserted the following new Article 10a:"Article 10a. Where there are several decedents and the sequence of the occurrence of death of each one of them is unascertainable, the older of any two such decedents shall be presumed to have predeceased the younger." 6. In the Housing Associations Act (promulgated in the State Gazette No. 55/1978; amended in No. 102/1981, No. 45/1984, No. 75/1988, No. 46/1989, No. 21/1990, No. 60/1992 and No. 104/1996), 4 of the Supplementary Provisions is hereby repealed. 7. The Monuments of Culture and Museums Act (promulgated in the State Gazette No. 29/1969; amended and supplemented in No. 29/1973, No. 36/1979, No. 87/1980, No. 102/1981, No. 45/1984, No. 45/1989, Nos. 10 and 14/1990, No. 112/1995; (modified by) Constitutional Court Judgment No. 5/1996, (promulgated in) No. 31/1996; amended in No. 44/1996) shall be amended as follows:1. In Article 25, the last sentence shall be deleted.2. In Paragraph (1) of Article 29, the words "and local" in sentence one shall be deleted. 8. In the State Property Act (promulgated in the State Gazette No. 44/1996; amended in No. 104/1996, Nos. 55 ? 9. In the Notaries and Notarial Practice Act (promulgated in the State Gazette No. 104/1996), Paragraph (3) of Article 96 is hereby repealed. 10. In Article 15 of the Tax Procedures Act (promulgated in the State Gazette No. 61/1993; amended in No. 20/1996 and No. 51/1997), a Paragraph (5) shall be inserted to read as follows:"(5) In assessment of the tax liabilities, the tax base shall be rounded down to BGL 100 if the last two figures are smaller than '50' and rounded up if the last two figures are greater than '50'. The amount of tax shall be rounded up to BGL 10 if the last figure is smaller than '5' and rounded up if the last figure is greater than '5'." 11. Upon issuance of a registration card of any motor vehicle, the Ministry of the Interior shall record the engine power in kilowatts (horse powers) in the said card. 12. This Act shall enter into force on the 1st day of January 1998 and shall supersede the Local Taxes and Fees Act (promulgated in Transactions of the Presidium of the National Assembly No. 104/1951, corrected in No. 10/1952, amended and supplemented in Nos. 12 and 104/1954, No. 91/1957, No. 13/1958, Nos. 57 and 89/1959, Nos. 21 and 91/1960, State Gazette No. 85/1963, Nos. 1 and 52/1965, No. 63/1973, No. 87/1974, No. 21/1975, No. 102/1977, No. 88/1978, No. 36/1979, No. 99/1981, No. 55/1984, No. 73/1987, Nos. 33 and 97/1988, Nos. 21 and 30/1990, No. 82/1991, No. 59/1993, Nos. 40 and 87/1995; (modified by) Constitutional Court Judgment No. 3/1996, (promulgated in) No. 14/1996; amended in Nos. 20 and 37/1996; (modified by) Constitutional Court Judgment No. 9/1996, (promulgated in) No. 58/1996; amended in Nos. 89 and 93/1996, and No. 55/1997).Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 105/1998 (effective 8.09.1998)FINAL PROVISION 2. This Act shall enter into force on the date of promulgation thereof in the State Gazette and shall apply to all payments of the immovable property tax and the household waste fee effective after the 1st day of September 1998.Tax Procedure Code Promulgated, SG No. 103/1999 (effective 1.01.2000)TRANSITIONAL AND FINAL PROVISIONS 20. (1) Any judicial proceeding in the matter of a tax case, which has been instituted before the court and which is pending, shall be tried according to the procedure effective prior to the entry of this Code into force.(2) Any pending cases under Article 83 (2) of the State Receivables Collection Act, which is hereby repealed, shall be tried according to the procedure established by Chapter 12a of the Code of Civil Procedure. (3) Until adoption of rules of organization of the tax administration, the number and territorial competence of the tax directorates shall be determined by an order of the Minister of Finance which shall be promulgated in the State Gazette. 21. The provisions of the Code of Civil Procedure shall apply, mutatis mutandis, to any cases unregulated by this Code.Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 109/2001 (effective 1.01.2002), amended, SGNo. 45/2002 (effective 1.01.2002) 51. The particulars of the certificate of registration of any road transport vehicle shall be used for assessment of the road tax due by the owner of any transport vehicle referred to in Article 61c herein, which is registered for operation at the date of entry of this Act into force.52. (Amended, SG No. 45/2002) The transport vehicle tax and the road tax for 2002 shall be paid in two equal instalments within the following periods: the first instalment, from the 1st day of June to the 31st day of August, and the second instalment, not later than the 31st day of October. Any taxpayer, who or which prepays the amount of tax due for the whole year by the time limit for payment of the first instalment, shall enjoy a rate rebate of 10 per cent. 54. Upon acquisition or descent of a road transport vehicle prior to the 1st day of May 2002, the tax base shall be the insured value.Act to Amend and Supplement the Tax Procedure CodePromulgated, SG No. 45/2002 (effective 30.04.2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93. (1) Any fines imposed under Article 186 of the Road Traffic Act shall be collected according to the procedure established by the Tax Procedure Act.(2) Any delinquent fines under tickets issued prior to the entry of this Act into force according to the procedure established by Article 186 of the Road Traffic Act shall be paid within six months after the entry of this Act into force at the tax subdivision exercising competence over the place of residence, without dispatch of a notice of voluntary compliance. After the lapse of the six-month time limit, the ticket issued shall be considered an effective penalty decree and the fine imposed shall be collected according to the procedure established by the Tax Procedure Code.Tourism Act Promulgated, SG No. 56/2002 (effective 1.10.2002)TRANSITIONAL AND FINAL PROVISIONS 11. 6, in respect of the provisions amending and supplementing the Local Taxes and Fees Act, shall enter into force on the 1st day of January 2003.Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 119/2002 (effective 1.01.2003)TRANSITIONAL AND FINAL PROVISIONS 47. The household waste fee shall be collected by the tax administration authorities for a period of two years after the entry of this Act into force. 48. (1) Not later than the 30th day of November 2003, the (competent) Municipal Council shall provide the competent tax administration authorities with information regarding the persons liable to pay a household waste fee and the sums due therefrom. The said information shall be provided in the form of an electronic document and in compliance with the requirements of the Electronic Document and Electronic Signature Act or in a standardized format on an electronic and paper-based data medium, endorsed by the Minister of Finance.(2) In the event of failure to provide the information within the time limit established by Paragraph (1), the tax administration shall collect the fee from the taxable persons referred to in Article 11 (of the Local Taxes and Fees Act) in the amounts as determined by the (competent) Municipal Council and applying a base as effective at the 31st day of December in the last preceding year.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51. Within three months after the entry of this Act into force but not later than the adoption of the municipal budget, the (competent) Municipal Council shall adopt the ordinance referred to in Article 9 (of the Local Taxes and Fees Act). Until adoption of the said ordinance, the determination and administration of the fees shall follow the hitherto effective procedure. 52. This Act shall enter into force on the 1st day of January 2003, with the exception of 11, 12, Item 1 of 13, 14, 15, 16, 17 and 18, which shall enter into force on the 1st day of January 2004, and of Item 2 of 13, which shall enter into force on the 1st day of January 2005.Act to Amend and Supplement the Code of Civil ProcedurePromulgated, SG No. 84/2003FINAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. This Act shall enter into force as from the day of promulgation in the State Gazette of the European Convention on Recognition and Enforcement of Decisions concerning Custody of Children and on Restoration of Custody of Children of 1980 and of the Hague Convention on the Civil Aspects of International Child Abduction, respectively, with the exception of 2, 3, 4, 5, 8 (in the part regarding Article 423a (1), 12, 15, 16 and 17, whereas 10 shall enter into force on the day of entry into force of the Act to Amend and Supplement the Code of Civil Procedure (State Gazette No. 105/2002).Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 112/2003 (effective 1.01.2004),supplemented, SG No. 6/2004 (effective 1.04.2004)TRANSITIONAL AND FINAL PROVISIONS 20. The persons with disabilities, whereof the durably reduced working capacity has been established after attainment of the age required for acquisition of entitlement to contributory service and retirement-age pension or who have attained this age within the period fixed by the decision of the Territorial Medical Expert Board for Working Ability Certification (National Medical Expert Board for Working Ability Certification), shall enjoy the rights thereof under this Act for life regardless of the period fixed in the expert decision. 21. (1) The tax administration authorities shall calculate, update and notify the persons referred to in Article 64 (of the Local Taxes and Fees Act) of the household waste fees owed thereby for 2004 and of the time limits for payment, together with the notices of the immovable property tax, in the cases where the methods for assessment of the said fees have not been changed.(2) The notices referred to in Paragraph (1) shall have the status of a statement ascertaining the receivable under Article 9b (2) (of the Local Taxes and Fees Act) and shall be appealable according to the procedure established by the Administrative Procedure Code. (3) In 2004, the receivables under any effective statements referred to in Paragraph (2) shall be collected by the tax administration according to the procedure established by the Tax Procedure Code. 22. The household waste fee for 2004 shall be paid under the terms and within the time limits established by Article 28 (1) and (2) (of the Local Taxes and Fees Act). 22a. (New, SG No. 6/2004) Any sums overremitted by taxable persons for transport vehicles under the hitherto effective version of Items 2, 3 and 4 of Article 61a (of the Local Taxes and Fees Act) for the period after the 1st day of April 2004 shall be subject to offset or refund by the tax administration according to the procedure established by Article 112 of the Tax Procedure Code.Act to Amend and Supplement the Cadastre and Property Register ActPromulgated, SG No. 36/2004TRANSITIONAL AND FINAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62. Within three months time after the promulgation of this Act in the State Gazette, the entries under the name system shall be performed by the registry offices with the Recording Agency.Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 106/3.12.2004 (effective 1.01.2005)TRANSITIONAL AND FINAL PROVISIONS 21. Within three months after the entry of this Act into force, the owners of cargo trucks of legally permissible maximum weight exceeding 20 tonnes shall submit a declaration under Article 54 (1) (of the Local Taxes and Fees Act), stating therein the legally permissible maximum weight, the number of axles and the type of suspension of the transport vehicle. 22. Any enterprises, which are obligated or which have elected to apply the International Financial Reporting Standards as from the 1st day of January 2005, shall submit declarations for the said year under Article 17 (1) (of the Local Taxes and Fees Act) on a change in particulars not later than the 30th day of June 2005. 22. This Act shall enter into force on the 1st day of January 2005, with the exception of 2 and 3 (amending Article 2 and Article 4 (1)), which shall enter into force on the 1st day of January 2006.Lev Re-denomination Act Promulgated, State Gazette No. 20/1999,amended, SG No. 65/1999 (effective 5.07.1999).TRANSITIONAL AND FINAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. (1) (Amended, SG No. 65/1999) Upon the entry of this Act into force, all figures expressed in old lev terms as indicated in the laws which will have entered into force prior to the 5th day of July 1999 shall be replaced by figures expressed in new lev terms, reduced by a factor of 1,000. The replacement of all figures expressed in old lev terms, reduced by a factor of 1,000, shall furthermore apply to all laws passed prior to the 5th day of July 1999 which have entered or will enter into force after the 5th day of July 1999.(2) The authorities, which have adopted or issued any acts of subordinate legislation which will have entered into force prior to the 5th day of July 1999 and which contain figures expressed in lev terms, shall amend the said acts to bring them in conformity with this Act so that the amendments apply as from the date of entry of this Act into force.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. This Act shall enter into force on the 5th day of July 1999.Veterinary Practices Act Promulgated, SG No. 87/2005 (effective 1.05.2006)TRANSITIONAL AND FINAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. Within three months after the entry of this Act into force, the Council of Ministers shall lay before the National Assembly a Protection of Animals Bill. 24. Within six months after the entry of this Act into force, the Council of Ministers shall lay before the National Assembly a Bill on a National Professional Organization of Veterinary Practitioners and the Procedure for Practising Veterinary Medicine. 25. Any statutory instruments of secondary legislation issued until the entry of this Act into force shall be applied, insofar as the said instruments do not conflict with the said Act, and until the express repeal of the said instruments. 26. (1) Within one year after the entry of this Act into force, the Minister of Agriculture and Forestry shall issue the ordinances on the application thereof.(2) Within six months after the promulgation of this Act in the State Gazette, the Council of Ministers shall adopt the ordinance referred to in Article 109 herein and shall approve the rate schedule referred to in Article 14 (2) herein.Act to Amend and Supplement the Local Taxes and Fees ActPromulgated, SG No. 100/2005, effective 1.01.2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SUPPLEMENTARY PROVISION 17. Throughout the Act, the words "tax authority", "the tax authority" and "the tax authorities" shall be replaced, respectively, by "municipal administration officer", "the municipal administration officer" and "municipal administration officers", and the words "territorial tax directorate" and "the territorial tax directorate" shall be replaced, respectively, by "municipality" and "the municipality".TRANSITIONAL AND FINAL PROVISIONS 18. Not later than the 15th day of February 2006, the owners of trailer tractors and truck tractors shall submit the declaration referred to in Article 54 (1) of the Local Taxes and Fees Act, stating therein the indicators which are relevant to the assessment of the tax: permissible maximum weight of the combination of transport vehicles, number of axles and type of suspension of the tractor. 19. For 2006, the Municipal Council shall determine the household waste fee not later than the 31st day of January 2006. Where no new amount has been determined, the fee shall be collected on the basis of the amount effected at the 31st day of December 2005 20. (1) For 2006, the first instalment referred to in Article 28 (1) and Article 60 (1) of the Local Taxes and Fees Act shall be payable from the 1st day of March to the 30th day of April.(2) Any taxpayer, who or which prepays the amount due for the whole year by the time limit referred to in Paragraph (1), shall enjoy a rate rebate of 5 per cent. 21. For 2006, the authorities of the National Revenue Agency shall calculate the liabilities, shall print and send notices to the persons regarding the immovable property tax and household waste fee due therefrom. The costs of this process shall be for the account of the budget of the Agency. 22. Any tax and enforcement proceedings pending upon the entry of this Act into force shall be completed according to the hitherto effective procedure.TRANSITIONAL AND FINAL PROVISIONSof the Administrative Procedure Code(SG, No. 30/2006, effective 12.07.2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77. Everywhere in the Local Taxes and Fees Act (Promulgated, State Gazette No. 117/1997, amended and supplemented, SG No. 71/1998, amended, SG No. 83/1998, amended and supplemented, SG No. 105/1998, SG No. 153/1998, amended, SG No. 103/1999, amended and supplemented, SG No. 34/2000, SG No. 102/2000, SG No. 109/2001, amended, SG No. 28/2002, amended and supplemented, SG No. 45/2002, No. 56/2002, SG No. 119/2002, amended, SG No. 84/2003, amended and supplemented, SG No. 112/2003, SG No. 6/2004, supplemented, SG No. 18/2004, amended, SG No. 36/2004, supplemented, SG No. 70/2004, amended and supplemented, SG No. 106/2004, SG No. 87/2005, amended, SG No. 94/2005, amended and supplemented, SG No. 100/2005, SG No. 103/2005, SG No. 105/2005) the words "the Administrative Procedure Act" shall be replaced by "the Administrative Procedure Code".Act to Amend and Supplement the Local Taxes and Fees Act(Promulgated, SG No. 105/2006, effective 1.01.2007)TRANSITIONAL AND FINAL PROVISIONS........................................................................ 13. For 2007, the competent Municipal Council shall determine a household waste fee not later than the 31st day of January 2007. Where the Municipal Council has failed to pass a resolution whereby the amount of the household waste fee is determined, a fee to the amount of the absolute value applicable to the last preceding year shall be collected from each liable person. 14. (1) For 2007, the first instalment referred to in Article 28 (1) and in Article 60 (1) of the Local Taxes and Fees Act shall be payable from the 1st day of March to the 30th day of April.(2) Any taxpayer, who or which prepays the amount of tax due for the whole year by the time limit referred to in Paragraph (1), shall enjoy a rate rebate of 5 per cent. 15. (1) The authorities of the National Revenue Agency shall calculate the liabilities, shall print and shall send notices to the persons regarding the immovable property tax and household waste fee due for 2007. The costs of this process shall be for the account of the budget of the Agency.Act to Amend and Supplement the Local Taxes and Fees Act(Promulgated, SG No. 110/2007, effective 1.01.2008)TRANSITIONAL AND FINAL PROVISIONS 18. The Municipal Council shall determine the amount of the local taxes not later than the 29th day of February 2008. In case the amount of local taxes has not been determined within this time limit, the minimum amounts of the taxes provided for in the law shall apply for 2008, and in respect of the licence tax, the amounts which were effective for 2007 shall apply for 2008. 19. Until determination of the amount of local taxes for 2008 by the Municipal Council, the tax on acquisition of property under Article 44 (1) and (2) of the Local Taxes and Fees Act and the inheritance tax shall be assessed on the basis of the minimum amounts of the respective taxes as provided for in the law. 20. (1) For 2008, the first and the second instalment under Article 28 (1) of the Local Taxes and Fees Act and, respectively, the first instalment of the tax under Article 60 (1) of the Local Taxes and Fees Act, shall be payable from the 31st day of March to the 30th day of June.(2) Any taxpayer, who or which prepays the amount of tax due for the whole year by the time limits referred to in Paragraph (1), shall enjoy a rate rebate of 5 per cent. 21. The Minister of Finance shall endorse a standard form of the return referred to in Article 61m (1) of the Local Taxes and Fees Act not later than the 29th day of February 2008. 22. For 2008, the persons subject to levy of a licence tax shall submit a return under Article 61m (1) of the Local Taxes and Fees Act not later than the 30th day of April 2008. 23. (1) For 2008, the first and second payments under Article 61o (1) of the Local Taxes and Fees Act shall be remitted on or before the 30th day of April 2008.(2) Any taxpayer, who prepays the amount of tax due for the whole year by the time limits referred to in Paragraph (1), shall enjoy a rate rebate of 5 per cent. 24. This Act shall enter into force on the 1st day of January 2008. Annex 1 (Amended, SG No. 153/1998, effective 1.01.1999; repealed, SG No. 109/2001, effective 1.01.2002) Annex 2 (Amended, SG No. 153/1998, effective 1.01.1999; amended and supplemented, SG No. 109/2001, effective 1.01.2002, amended, SG No. 112/2003, effective 1.01.2004, supplemented SG No. 106/2004, effective 1.01.2005, amended and supplemented No. 100/2005, effective 1.01.2006, amended, SG No. 105/2006, effective 1.01.2007) Immovable Property Tax Assessment Rates I. General Provisions Article 1. The assessed value of immovable property shall be determinedin Bulgarian lev terms and shall represent a sum total of the assessedvalues of the separate items. Article 2. The corporeal immovable or parts thereof shall be valuedignoring the influence of any restrictive covenant or encumbrance thereon. Article 3. (1) (Amended, SG No. 100/2005) The assessed value shall bedetermined by the officers of the municipal administration exercisingcompetence over the situs of the property within two weeks after submissionof a declaration completed in a standard form. (2) (New, SG No. 100/2005) A tax assessment certificate shall be issuedfor the purposes of levy of inheritance tax and tax on acquisition ofproperty, for determination of the stamp duties and notarial fees in theproceedings under the Code of Civil Procedure and in other cases providedfor by the law. (3) (Renumbered from Paragraph (2) and supplemented, SG No. 100/2005) Where no declaration for the purposes of immovable property taxation of theproperty has been submitted or where intervening alterations have occurred inthe particulars as declared, an application shall be submitted, enclosingtherewith a declaration completed in a standard form. Where an issuance of atax assessment certificate for construction in progress is applied for, amemorandum of ascertainment, issued by the municipal (or borough)administration, certifying the stage of completion of the construction work,shall be attached to the application. (4) (Amended, SG No. 112/2003, supplemented, SG No. 106/2004, renumberedfrom Paragraph (3), SG No. 100/2005, amended, SG No. 105/2006) Any taxassessment certificates, issued until the 30th day of June in the relevantcurrent year in pursuance of Article 264 (1) of the Tax And Social-InsuranceProcedure Code, shall be valid until the said date, and any tax assessmentcertificates issued after the said date and until the end of the current yearshall be valid until the end of the said current year. Where the taxliabilities in respect of the immovable have been paid for the full year andthis circumstance has been entered in the certificate, the said certificateshall be valid until the end of the relevant current year regardless of thedate of issue of the said certificate. Any tax assessment certificates onundeveloped agricultural land tracts shall be valid until the end of therelevant current year. II. Tax Valuation of Buildings Article 4. The assessed value of any building or part of buildingsshall be arrived at proceeding from the base tax value per square metre,adjustment coefficients and space using the following formula: AV = BV x Cl x Ci x Cc x Ch x Cw x S where: AV is the assessed value in leva; BV is the base tax value per 1 square metre in leva; Cl is a coefficient of location; Ci is a coefficient of infrastructure; Cc is a coefficient of individual characteristics; Ch is a coefficient of height; Cw is a coefficient of wear and tear S is the space of the building or of part thereof in square metres.Article 5. (1) The base tax value (BV) shall be determined per squaremetre depending on the structure and type of the item.(2) The structures of buildings are indicated in Table 1.Table 1Structure Type CodesCode Structure1 2BN brick nagged timber-framed structureSS semi-solid structureS1 solid structure without reinforced-concrete members or of prefabricated asbestos-cement or other panels (bungalows), solid with partial use of reinforced-concrete membersS2 solid, large-panelS3 solid with bearing brick walls and entirely cast-in-situ or prefabricated reinforced-concrete floor structures, solid or prefabricated skeleton and framed structure, lift-slab structure, large-panel and sliding forms, skeleton-beamless structures, special structure (steel etc.)(3) The base tax value shall be determined in Bulgarian lev terms persquare metre according to Table 2.Table 2Structure Residential buildings Non-residential buildings flats houses 1 2 3 4BN 4.40 3.70 4.80SS 7.50 6.40 8.20S1 11.00 9.40 12.10S2 14.00 12.00 15.40S3 17.00 14.50 18.70(4) Applicable to the following items within condominium projectbuildings, the base tax value shall be determined as a percentage of thebase tax value of flats, as follows:1. maisonettes and studios: 100 per cent;2. garages: 80 per cent.(5) Applicable to the following items located on housing constructiongrounds, the base tax value shall be determined as a percentage of the basetax value of houses, as follows:1. garages: 85 per cent;2. stables, barns, sheds with surrounding walls and other such: 60 percent;3. sheds without surrounding walls: 40 per cent.(6) Applicable to the following non-residential items, the base taxvalue shall be determined as a percentage of the base tax value of non-residential buildings, as follows:1. garages and warehouses: 80 per cent;2. sheds with surrounding walls: 60 per cent;3. sheds without surrounding walls: 40 per cent.(7) Any self-contained items within the common parts of the buildingshall be valued separately.(8) The value of the indivisible interests in the common parts of thebuilding shall be included into the base tax value.Article 6. (1) The coefficient of location (Cl) shall be determinedaccording to Table 3 or 4 and the situs of the building:1. the coefficient of location shall be determined according to Table 3in respect of all buildings with the exception of manufacturing and farmbuildings; where the zones within the nucleated settlement and/or the gradesof the country-house zones have not been established, the coefficients undercolumns 7 and 10 shall apply;Table 3(Amended, SG No. 100/2005,amended, SG No. 105/2006) Grade Zone Withindevelop-mentlimits Outsidedevelop-ment limits Country-house zone I II III IV V Grade 1 Grade 2Sofia 62,4 49,9 42,1 28,1 18,7 17,2 15,6 43,7 25,0Varna 59,3 46,8 37,4 28,1 18,7 17,2 15,6 40,6 21,8Bourgas 45,2 39,0 34,3 23,4 15,6 14,0 12,5 34,3 15,6StaraZagora 42,1 35,9 29,6 22,6 15,6 14,0 12,5 29,6 15,6Plovdiv 39,0 32,8 25,0 21,8 15,6 14,0 12,5 25,0 15,6I, Group 1 32,8 25,0 20,3 15,6 14,0 12,5 10,9 18,7 14,0I, Group 2 21,0 15,0 10,6 7,6 - 6,0 4,6 9,0 7,6II 14,4 8,6 7,2 5,8 - 4,3 3,6 5,8 4,3III 7,9 5,8 4,3 - - 3,6 2,9 4,3 3,6IV, V 4,3 2,9 - - - 2,9 2,2 3,6 2,9VI, VII, VIII 2,2 - - - - 1,6 1,4 1,9 1,7 2. applicable to distributive trade establishments, the coefficient oflocation under Table 3 shall be increased by 40 per cent. "Distributive-trade establishment" means a store, a drugstore, a kiosk, a booth, awholesale warehouse, an automotive fuel filling station, a discotheque, arestaurant, a cafeteria, a patisserie, a public house, a beer hall, atavern, a cafe, a hotel, a motel, and a gambling establishment;3. the coefficient of location shall be determined according to Table 4in respect of manufacturing and farm buildings and of appertaining officebuildings located within the same property (parcel of land) :Table 4(Amended, SG No. 100/2005,amended, SG No. 105/2006) Grade Location favourable Unfavourable manufacturing farm manufacturing FarmSofia 15,6 10,9 11,5 7,2Varna 14,8 10,5 10,9 6,9Bourgas 14,0 9,8 10,4 6,5StaraZagora 13,7 9,6 10,1 6,3Plovdiv 13,3 9,4 9,8 6,0I, Group 1 10,9 7,6 8,1 5,0I, Group 2 9,4 6,6 7,0 4,3II 7,8 5,5 5,8 3,6III 4,7 3,3 3,5 2,2IV, V 3,1 2,2 2,3 1,4VI, VII, VIII 1,6 1,1 1,2 0,7 (a) "manufacturing (industrial manufacturing) works" means works usedfor manufacturing purposes, including generation and distribution of steam,compressed air and gases, generation, transmission and distribution ofelectricity, pumping stations and water-treatment plants, hangars, garages,depots, warehouses and sheds for storage of industrial output; (b) "farm works" means buildings for livestock breeding and poultrybreeding, buildings for crop husbandry, artificial insemination stations,incubator houses, feed preparation rooms, veterinary filters, warehouses andsheds for storage of farm produce, silos and incinerators; (c) "buildings of favourable location" are such that satisfy thefollowing conditions more than 50 per cent: the building is located withinthe settlement limits; in proximity (within 1 km) to the national roadnetwork, railway stations and maritime or river ports; self-containedproduction (industrial, commercial and agricultural) zones. (2) (Amended, SG No. 109/2001, supplemented, SG No. 100/2005) Thecoefficient of location referred to in Paragraph (1) shall be increased by50 per cent applicable to national resorts and the country-house zonestherewith, as well as applicable to country-house zones within 10 km from thecoast line, with the exception of Varna, Bourgas, the Borovets resortcomplex, the Dyuni resort complex, the Elenite resort complex, the SunnyBeach resort complex and the nucleated settlements listed underParagraph (5). (3) (Amended, SG No. 109/2001, supplemented, SG No. 100/2005) Thecoefficient of location referred to in Paragraph (1) shall be increased by20 per cent applicable to resorts of local importance and to thecountry-house zones therewith with the exception of the nucleated settlementlisted under Paragraph (5). (4) (Amended, SG No. 100/2005) The grade of the nucleated settlementshall be determined by the Uniform Classifier of Political and TerritorialUnits (EKATTE), endorsed by Council of Ministers Decision No. 565 of 1999(State Gazette No. 73 of 1999), with the exception of Varna, Bourgas, StaraZagora, Plovdiv and the nucleated settlements listed under Paragraph (5). (5) (New, SG No. 100/2005) The following nucleated settlements shall begrouped in Grade I (One): 1. Group 1: Blagoevgrad, Veliko Turnovo, Kurdjali, Pernik, Pleven,Rousse, Sliven, Haskovo, Shoumen, Bansko, Nessebur, Sozopol; 2. Group 2: Vidin, Vratsa, Gabrovo, Dobrich, Lovech, Montana, Pazardjik,Silistra, Smolyan, Razgrad, Turgovishte, Yambol, Aytos, Karnobat, NovaZagora, Sevlievo, Harmanli, Troyan, Panagyurishte, Peshtera, Asenovgrad,Radomir, Samokov, Kazanluk, Radnevo, Chirpan, Popovo, Kozloduy, Kranevo,Balchik, Byala (Varna Region), Velingrad, Kyustendil, Sandandski, Kiten,Obzor, Pomorie, Primorsko, Sveti Vlas, Hissarya, Tsarevo. (6) (Renumbered from Paragraph (5), SG No. 100/2005) "Country-housezone" means a country-house zone with approved development and regulationplans. (7) (Renumbered from Paragraph (6), SG No. 100/2005) The boundaries ofthe zones within nucleated settlements and the grades of the country-housezones shall be determined by resolution of the Municipal Council. Untilpassage of such resolution, the zones and grades shall apply as establishedby an order of the Municipality Mayor.Article 7. The coefficient of infrastructure (Ci) shall be arrived atby adding to 1 the value of the components under Table 5:Ci = 1 + A + B + C + D + E + FTable 5Component Value of components available not available not available in building, available in neighbourhood1 2 3 4A. Running water supply 0.0 -0.05 -0.03B. Sewer system 0.0 -0.05 -0.03C. Electric power supply 0.0 -0.07 -0.05D. Telephone communications 0.0 -0.02 -0.02E. Central heating and hot-water supply +0.06 0.00 0.00F. Street network 0.0 -0.08 -0.081. "street network" means streets with permanent pavement;2. where the building is not connected to the electric power supply,water-conduit and sewer networks but the relevant infrastructure has beenbuilt in the neighbourhood, these components shall be presumed to have thevalue under column 4. "Neighbourhood" means part of a nucleated settlementdelimited by record street lines (or streets, where there is no approvedregulation plan), even where the facilities are located within the limitsof the streets. The coefficient under column 4 shall furthermore apply inthe valuation of a part of a building, i. e. if the item has no builtinfrastructure but such infrastructure is available within the building.Article 8. (1) The coefficient of individual characteristics (Cc) shallbe arrived at by adding to 1 the following adjustments:Cc = 1 + cc1 + cc2 + cc3where:1. cc1 is an adjustment for height location of items in residential andpredominantly residential buildings:Table 6Item located on Adjustment (cc1) in buildings of six and more stories without elevator in any other buildings non-residential flats non-residential flats1. First floor +0.10 -0.05 +0.10 -0.052. Second to fifth floor -0.03 +0.03 0.00 +0.033. Sixth and upper floor -0.10 -0.03 -0.08 0.00(a) where the items covered under Item 1 are located on the uppermostfloor of a building of two and more stories, the adjustment cc1 shall bereduced by 0.05;(b) applicable to studios, garages, basements and attics, theadjustment cc1 shall be nil;2. cc2: adjustment for physical condition of the item:Table 7Physical condition Value of cc2No interior overhaul for more than 20 years -0.05Bad physical condition from -0.10 to -0.60(a) "bad physical condition" means damage caused by natural disasters,accidents and other such, as a result whereof the physical condition of theitem has deteriorated materially; the value of the adjustment shall beascertained after inspection and drafting of a memorandum describing thedamage;(b) in the rest of the cases, cc2 shall be equal to nil;3. cc3: adjustment for improvements of items:cc3 = A + B + C + D + E + FTable 8Type of improvement Value of cc3 available not availableA. Heating system 0.00 0.04B. Air conditioning system 0.00 0.06C. De luxe or aluminium joinery units 0.00 0.04D. Sound proofing or heat insulation 0.00 0.03E. Roofing 0.00 0.03F. Ornaments and facings 0.00 0.02(a) "heating system" means private heating, under floor and radiantwall heating;(b) "air conditioning system" refers to a system which is durablyaffixed to the building;(c) "roofing" means de luxe improvements: a special roof structure,sheeting and insulations;(d) "ornaments and facings" refers to de luxe interior and exteriorornaments, mosaics, facings, panels etc. Article 9. (1) The coefficient of height (Ch) shall be arrived at inrespect of any distributive-trade establishment, manufacturing or farm work,where the floor height exceeds 4 metres, using the following formula: 0.05 Ch = (H - 3) where H is the actual floor height in metres, accurate to 0.5 metre. (2) The coefficient shall be calculated to three-place accuracy. (3) Applicable to any other item, the coefficient shall have a valueof 1.Article 10. (1) (Amended, SG No. 153/1998) The coefficient of wear andtear (Cw) shall be arrived at using the following formula:Cw = (100 - (NY - 5) x PC)/100where:NY is the number of years which have lapsed between the completion ofthe building and the moment of valuation (integral number);PC is the annual rate of wear and tear of buildings by type ofstructure in percentage terms:Table 9Structure code Annual rate of wear and tear (%)BN 1.0SS 0.8S1 0.7S2 0.6S3 0.5(2) Until the fifth year after completion of the building, thecoefficient shall have the value of 1.(3) The coefficient of wear and tear may not be less than 0. 65applicable to any building or part thereof of brick nogged timber framed orsemi-solid structure, less than 0.75 applicable to S1 and S2, and less than0.85 applicable to S3. Article 11. (1) The space (S) (gross area, gross floor area) of anybuilding or part thereof shall represent the entire space enclosed between:the outer surface of the exterior walls and/or imaginary vertical planesequidistant from the surfaces of the interior walls (applicable to rooms);the outer surface of the exterior wall and/or of the parapet wall(applicable to open space with side closure); the horizontal projection ofthe contour of the roofing structural member (applicable to roofed openspace without side closure); the outer surface of the exterior walls andparapet walls (applicable to a floor of a building, a condominium projectbuilding, or a section of a building). (2) The space of any basement or attic shall be determined as follows: 1. thirty per cent of the gross area thereof, where adjoiningresidential items; 2. sixty per cent of the gross area thereof, where adjoiningnon-residential items. (3) The space as arrived at under Paragraph (2) shall be added to thespace of items which the basements or attics adjoin. (4) Where any basement or attic must be valued as self contained items,the space arrived at according to Paragraph (2) shall qualify as the space. III. Tax Valuation of Construction in Progress Article 12. (1) Any construction in progress shall be valued accordingto completed construction and erection work as percentage of the assessedvalue of the building as designed, as follows: 1. (amended, SG No. 100/2005) up to grade level: 37 per cent; 2. (amended, SG No. 100/2005) up to rough construction work: 63 percent; 3. (repealed, SG No. 100/2005). (2) The assessed value of any self-contained item within an unfinishedbuilding shall be part of the assessed value of the said unfinished buildingcorresponding to the proportion between the gross floor area of the item(including indivisible interests in the common parts of the building) andthe gross floor area of the building as designed. IV. Tax Valuation of Land within Development Limits, Developed Yards and Land outside Development Limits (Excluding Agricultural Land) Article 13. (1) The assessed value of any land tract within developmentlimits, country-house zones, developed yards (developed sites outsidedevelopment limits) and of any land outside development limits (excludingagricultural land) shall be arrived at proceeding from the base tax valueper square metre, adjustment coefficients, surface area, and the tax valueof improvements using the following formula: AV = BV x Cl x Ci x Cz x Cd x SL + VI where: AV is the assessed value in leva; BV is the base tax value per 1 square metre in leva; Cl is a coefficient of location according to Table 3; Ci is a coefficient of infrastructure; Cz is a coefficient of spatial development zone; Cd is a coefficient of building development; SL is the surface area of the land, inclusive of the floor area, insquare metres; VI is the tax value of improvements. (2) The assessed value of aquatic areas, mines, quarries, forest-stockland tracts and other such items shall be determined depending on thelocation and status thereof. Article 14. (1) The base tax value of land shall be BGN 0.80 persquare metre. (2) The base tax value per 1 square metre of any undeveloped sitewithin the development limits of nucleated settlements, as designated by adetailed urban-development plan, shall be 125 per cent of the base tax valuereferred to in Paragraph (1). (3) (Amended, SG No. 100/2005) The base tax value of any land within thedevelopment limits of nucleated settlements of Grade IV, V, VI, VII and VIIIshall be increased as follows: 1. by 10 per cent, where located within 20 km from a nucleatedsettlement of Grade Zero or One; 2. by 5 per cent, where located within 15 km from a nucleated settlementof Grade Two. (4) (Amended, SG No. 109/2001, amended, SG No. 100/2005) The base taxvalue of any land located in a country-house zone within 10 km from the coastline, a national resort or a country-house zone therewith shall be increasedby 50 per cent, with the exception of Varna, Bourgas, the Borovets resortcomplex, the Dyuni resort complex, the Elenite resort complex, the SunnyBeach resort complex, and the nucleated settlements listed underArticle 6 (5) herein. (5) (Amended, SG No. 109/2001, amended, SG No. 100/2005) The base taxvalue of any land in a resort of local importance and in a country-house zonetherewith shall be increased by 20 per cent with the exception of thenucleated settlements listed under Article 6 (5) herein.Article 15. The coefficient of infrastructure (Ci) shall be arrived atby adding to 1 the value of the components under Table 10:Ci = 1 + A + B + C + DTable 10Component Value of components available not available not available in property, available in areaA. Running water supply 0.0 -0.05 -0.03B. Sewer system 0.0 -0.05 -0.03C. Electric power supply 0.0 -0.07 -0.05D. Street network 0.0 -0.08 -0.081. "street network" means streets with permanent pavement;2. where the property is not connected to the electric power supply,water-conduit and sewer networks but the relevant infrastructure has beenbuilt in the area, these components shall be presumed to have the valueunder column 4. "Area" means part of a nucleated settlement (settlement isthe entire territory delimited by the land-use area boundary) bounded bystreets (roads), even where the facilities are located within the limits ofthe streets. Article 16. (1) The coefficient of spatial-development zone (Cz) shallbe determined depending on the assigned use of the ground according to thedetailed urban-development plan, as follows: 1. central zone, Cz = 1.10; 2. manufacturing, predominantly manufacturing and specificallymanufacturing zones, Cz = 0.90, and land occupied by farmsteads, Cz = 0.80; 3. any other zone (residential, public service, parks, green spaces,sports facilities and other such), Cz = 1.00. (2) The coefficient under Paragraph (1) shall have the value of 1applicable to any land outside the development limits of the nucleatedsettlement and applicable to any land within an unzoned nucleatedsettlement. Article 17. The coefficient of building development (Cd) shall bedetermined in the following manner: 1. applicable to a degree of building development not exceeding 40 percent, as well as to undeveloped land, the said coefficient shall have thevalue of 1. The degree of building development shall be arrived at bydividing the floor area by the area of the property (parcel of land); 2. applicable to a degree of building development exceeding 40 percent, the following formula shall be used: (DB-35) Cd = 2 - 1. 01 where DB is the degree of building development; 3. applicable to a degree of building development equal to 100 percent, Cd = 0.10; 4. the coefficient shall be calculated to two-place accuracy. Article 18. (1) The tax value of improvements (VI) shall represent asum total of the assessed values of the individual improvements. (2) The assessed value of each improvement shall be arrived at bymultiplying the quantity thereof by the following values: 1. applicable to de luxe surfacing (excluding ordinary mosaic, concreteand clay and other flagging): BGN 35.00 per square metre; 2. applicable to solid fences (brickwork, concrete, metal, mixed) andretaining walls: BGN 8.00 per square metre (length by height); 3. applicable to permanently paved sports grounds: BGN 15.00 persquare metre; 4. applicable to swimming pools durably affixed to the ground:BGN 23.00 per cubic metre; 5. applicable to parking lots for public use, per square metre: (a) grassland and permanently paved: BGN 8.00; (b) any other: BGN 15.00. V. Tax Valuation of Agricultural LandArticle 19. (1) The assessed value of agricultural land shall bearrived at proceeding from the base tax value per square metre, varying bythe manner of permanent land use and the grade, the coefficient of locationand the space, using the following formula:AV + BV x Cl x SLwhere:AV is the assessed value in leva;BV is the base tax value per 1 square metre in leva;Cl is the coefficient of location;SL is the space of the land in square metres.(2) The assessed value of forests occupying agricultural land shall bedetermined according to the procedure established for agricultural landoccupied by permanent crops.(3) Where forest-stock land has to be valued, the said land shall bevalued as forests occupying agricultural land.(4) (New, SG No. 109/2001) The assessed value of the types of forest-stock land shall be arrived at by means of equalization of the site type ofthe forest-stock land to the grade of agricultural land according to thefollowing table:Grade of agricultural land Forest site type Prevailing characteristics Forest zone, richness and moisture1 2 3 4III 3, 5, 7, 90, 92, 93, 106 Flood plain and riparian, rich I-1, CD-23IV 4, 8, 9, 6, 52, 53, 69 Flood plain and riparian, leaner V 10, 14, 16, 37, 40, 41, 42, 44, 46, 54, 62, 73, 74, 76, 77, 78, 79, 81, 82, 84, 105, 111, 112, 114, 116, 118, 136 Rich mountain CD-23 (21*II, 6*I)VI 1, 2, 11, 12, 13, 17, 18, 20, 22, 24, 25, 27, 29, 30, 31, 34, 35, 38, 43, 45, 47, 51, 55, 56, 58, 59, 60, 63, 64, 65, 67, 68, 70, 71, 72, 80, 83, 85, 86, 87, 94, 95, 97, 98, 99, 100, 101, 102, 104, 107, 109, 110, 113, 115, 117, 119, 121, 124, 125, 127, 133, 135, 140, 141, 142, 144, 145 Rich valley, leaner mountain 10*I I-21 CD-23 (21* I, 4*II) 17*II B-12 3*III B-2 2*III C-23VII 21, 23, 26, 28, 32, 33, 36, 61, 66, 75, 108, 120, 122, 128, 131, 138, 139, 143, 146, 147 Leaner valley 5*AB-1, 2, BC-12, (8*I, 7*II)VIII 15, 19, 48, 50, 57, 89, 96, 137 Dry non-lean, certain high-mountain 2*Ib-12, 2*IC-1 3*III-2 BC-3IX 49, 88, 126, 129, 148, 149, 150 Dry and lean, certain high-mountain 4* A-1, 1*I, II B-12, 2*III BC-23X 130, 103, 123, 132, 134 Very dry and lean A-01 (2* AB-1, 3* A-01)where:the Roman numerals indicate forest zone;* - forest site;A - very lean land; B - lean; C - medium rich; D - rich;The numerals: 0 - very dry; 1 - dry; 2 - fresh, and 3 - wet.Article 20. The base tax value (BV) shall be determined in Bulgarianlev terms per square metre of agricultural land depending on landclassification and the manner of permanent use:1. where not under irrigation according to the following table:Table 11Manner of permanent use Base tax value by grade (BGN per square metre) I II III IV V VI VII VIII IX IX1 2 3 4 5 6 7 8 9 10 11Permanent crops 0.225 0.204 0.180 0.156 0.120 0.098 0.060 0.042 0.026 0.009Fields 0.125 0.112 0.098 0.086 0.065 0.054 0.033 0.023 0.015 0.006Lawns 0.081 0.074 0.065 0.056 0.044 0.036 0.021 0.015 0.009 0.003Pastures 0.048 0.044 0.039 0.033 0.026 0.021 0.012 0.009 0.005 0.0022. where under irrigation: the base tax value under Item 1, multipliedby 1.20.Article 21. The base tax value of agricultural land shall be adjustedby a coefficient of location (Cl), which shall be arrived at by adding to 1the following adjustments (Cl = 1 + c1 + c2 + c3):1. an adjustment for location in respect of the development limits ofthe nucleated settlement, in the land-use area whereof the property islocated (c1):Table 12Distance from development limits of settlement (km) c1abutting +0.25under 1 +0.15from 1 to 3 0.00from 3 to 6 -0.10from 6 to 8 -0.15over 8 -0.202. adjustment for location in respect of the permanently paved roadnetwork (c2):Table 13Distance from road network (km) c2abutting on road network +0.10under 1 0.00over 1 -0.103. (amended, SG No. 100/2005) adjustment for the grade of the nucleatedsettlement, in the land-use area whereof the property is located (c3):Table 14(Amended, SG No. 100/2005) Grade of settlement in land-use area whereof property is located c3Zero +0.30I +0.20II +0.15III +0.10IV and V 0.00VI, VII and VII -0.10 Article 22. (Amended, SG No. 153/1998) The assessed value of anybuilding right (AVBR) shall be determined in Bulgarian lev terms, using thefollowing formula: AVBR = GFA x 0.25 x BV x Cl x Ci x Cp where: GFA is the gross floor area of the building in square metres; BV is the base tax value depending on the structure and assigned use ofthe building. Should the structure be unknown, S2 shall be presumed. Theprevailing assigned use (over 50 per cent) shall apply; Cl is a coefficient of location depending on assigned use; Ci is a coefficient of infrastructure, determined according to SectionIV; upon creation of a building right affecting agricultural land, Ci shallbe determined in an identical manner; Cp is a coefficient accounting for the period wherefor the right hasbeen created, displayed to the third decimal place. Cp = (1 - 1.05-n) where "n" is the number of years wherefore the righthas been created. Where n is greater than 100 years, Cp shall be presumed tohave the value of 1. VII. Tax Valuation of Right of Use Article 23. (1) The assessed value of any real right of use (AVRU)shall be determined in Bulgarian lev terms using the following formula: AVRU = AV x Cp where: AV is the assessed value in lev terms of the property or the partthereof affected by the right as created; Cp is a coefficient accounting for the period wherefore the right hasbeen created, displayed to the third decimal place. -n Cp = (1 - 1.05 ) where "n" is the number of years wherefore the righthas been created. The coefficient may not be greater than 0.900. (2) Where the right of use is created for an indeterminate duration,the number of years wherefor the said right has been created shall bearrived at by subtracting the age of the user from 70 or, where there aremultiple users, the age of the youngest user. Where the user is older than70, the number of years shall be presumed to be 5. (3) (New, SG No. 100/2005) Where a right of use of an enterprise iscreated for an indeterminate duration, the coefficient accounting for theperiod shall be 0.900. (4) (Renumbered from Paragraph (3), SG No. 100/2005) Where a currentvaluation of the right of use is required, the number of years "n" shall bedetermined as the residual period reckoned at the date wherefore the valuationis required. Article 24. The assessed value of a right of ownership, where a realright of use has been created, shall be reduced by the assessed value of theright of use for the residual period, reckoned at the date wherefore thevaluation is required. Annex 3 to Article 55 (1) (New, SG No. 109/2001, effective 1.01.2002, repealed, SG No. 45/2002, effective 1.01.2002) Annex 4 to Section IV of Chapter Two (New, SG No. 110/2007, effective 1.01.2008)Types of Licence Activities and Annual Amount of Tax1. Collective tourist accommodation establishments or supplementary tourist accommodations of not more than 20 rooms: the tax shall be assessed per room according to the location of the establishment: one- and two-star from BGN 25 to BGN 2502. Mass-catering and entertainment establishments: the tax shall be assessed per customer place, including such in the open air, or per establishment, according to the location of the establishment:(a) restaurants: one- and two-star from BGN 1 to BGN 35 three-star from BGN 6 to BGN 60(b) fast-food outlets: one- and two-star from BGN 1 to BGN 20 three-star from BGN 3 to BGN 35(c) drinking establishments, except such listed under Littera (f): one- and two-star from BGN 1 to BGN 20 three-star from BGN 2 to BGN 35(d) cafes and patisseries: one- and two-star from BGN 1 to BGN 20 three-star from BGN 3 to BGN 50(e) bars: - lounge bars: two-star from BGN 3 to BGN 50 three-star from BGN 10 to BGN 84- night clubs: two-star from BGN 5 to BGN 63 three-star from BGN 20 to BGN 98(f) refreshment bars, caravans and kiosks (per establishment): from BGN 75 to BGN 5003. Retail trade on a net selling space of the establishment not exceeding 100 square meters: the tax shall be assessed per square meter of net selling space according to the location of the establishment: from BGN 2 to BGN 204. Paid parking facilities: the tax shall be assessed per parking space according to the location of the establishment: BGN per parking space from BGN 5 to BGN 2005. Carpenter services: the tax shall be assessed according to the location of the establishment: from BGN 50 to BGN 7806. Tailor, currier, furrier and knitting services: the tax shall be assessed according to the location of the establishment: from BGN 40 to BGN 8407. Trade in, manufacture of, and services involving articles of precious metals: the tax shall be assessed according to the location of the establishment: from BGN 500 to BGN 2,5008. Cobbler, hatter and milliner services: the tax shall be assessed according to the location of the establishment: from BGN 40 to BGN 1209. Metalworker services: the tax shall be assessed according to the location of the establishment: from BGN 100 to BGN 91010. Hairdresser and barber services, pet beauty parlour services: the tax shall be assessed per workplace according to the location of the establishment: from BGN 60 to BGN 84011. Typing and/or photocopying services: the tax shall be assessed per device according to the location of the establishment: from BGN 180 to BGN 59412. Cosmetic and tattooing services: the tax shall be assessed per workplace according to the location of the establishment: from BGN 130 to BGN 90013. Manicure and chiropody: the tax shall be assessed per workplace according to the location of the establishment: from BGN 60 to BGN 42014. Watchmaker services: the tax shall be assessed according to the location of the establishment: from BGN 60 to BGN 39015. Upholsterer services: the tax shall be assessed according to the location of the establishment: from BGN 180 to BGN 52016. Car washes; tyre repairs, regulating and balancing: the tax shall be assessed according to the location of the establishment: from BGN 190 to BGN 1,20017. Car repair, panel-beating, car painting and other services for the technical maintenance and repair of motor vehicles: the tax shall be assessed according to the location of the establishment: from BGN 280 to BGN 1,90018. Repair of wiring and plumbing systems: the tax shall be assessed according to the location of the establishment: from BGN 100 to BGN 56019. Glazier services: the tax shall be assessed according to the location of the establishment: from BGN 100 to BGN 70020. Maintenance and repair of household appliances, devices, audio-visual equipment, air conditioners, repair of musical instruments: the tax shall be assessed according to the location of the establishment: from BGN 47 to BGN 98021. Video cassette rental: the tax shall be assessed according to the location of the establishment: from BGN 300 to BGN 3,25022. Female and male escorts: the tax shall be assessed according to the location of the establishment: from BGN 3,000 to BGN 6,44023. Masseuses and masseurs: the tax shall be assessed according to the location of the establishment: from BGN 500 to BGN 1,68024. Clairvoyants, psychics and bio energy therapists: the tax shall be assessed according to the location of the establishment: from BGN 2,000 to BGN 5,60025. Photographic services: the tax shall be assessed according to the location of the establishment: From BGN 200 to BGN 1,04026. Intermediation services for the purchase, sale, exchange and lease of real property: the tax shall be assessed according to the location of the establishment: from BGN 100 to BGN 3,50027. Leased public lavatories: the tax shall be assessed according to the location of the establishment: from BGN 150 to BGN 42028. Locksmith services, repair of locks, repair of handbags, book-binding services, repair of sewing machines: the tax shall be assessed according to the location of the establishment: from BGN 50 to BGN 19829. Repair of umbrellas, repair and recharging of lighters, repair of bicycles, chimney sweeping services: the tax shall be assessed according to the location of the establishment: from BGN 50 to BGN 9830. Pawn brokers: from BGN 3,000 to BGN 28,00031. Retail of newspapers, magazines, Bulgarian and translated literature: the tax shall be assessed according to the location of the establishment: from BGN 30 to BGN 26032. Repair of computers, computer and other electronic office automation (copiers, facsimile machines, printers, etc.): the tax shall be assessed according to the location of the establishment: from BGN 300 to BGN 1,30033. Amusement or sports games: the tax shall be assessed per number of devices according to the location of the establishment:(a) amusement arcade machines and other games operated by coins or tokens: from BGN 100 to BGN 198(b) pinball, table tennis, darts, paintball and speedball, mini-basketball, bridge, backgammon: from BGN 8 to BGN 26(c) bowling and skittles, per alley, and billiards, per table: from BGN 40 to BGN 14034. Fitness centres and gyms: the tax shall be assessed according to the location of the establishment: from BGN 1.50 to BGN 4 per sq m and from BGN 300 to BGN 840 per fitness apparatus35. Dry cleaning, laundry and pressing: the tax shall be assessed per piece of equipment according to the location of the establishment: from BGN 133 to BGN 44036. Grain milling services: (a) flour mills: from BGN 18 to BGN 36 per running centimetre of the length of the milling line; (b) stationary animal-feed mills: from BGN 600 to BGN 1,20037. Vacation services: (a) pleasure boats from BGN 750 to BGN 1,500 per piece; (b) rowing boats from BGN 450 to BGN 900 per piece; (c) yachts from BGN 900 to BGN 1,800 per piece; (d) jetski from BGN 900 to BGN 1,800 per piece; (e) jeep-drawn mini-trains from BGN 30 to BGN 60 per seat; (f) horse-drawn cabs from BGN 75 to BGN 150 per seat; (g) water ski, water gliders and surfboards, paddle boats, including inflatable ones, water amusement games from BGN 150 to BGN 300 per piece of equipment; (h) snow ski (including skiing gear), ice skates, snowboards, sledges from BGN 150 to BGN 300 per piece of equipment; (i) merry-go-rounds, Ferris wheels, bumper cars, bicycles and rickshaws from BGN 150 to BGN 300 per seat; (j) toddler battery-propelled cars and motorbikes from BGN 150 to BGN 300 per piece; (k) shooting galleries from BGN 300 to BGN 600 per shooting gallery38. Motor vehicle driving instruction: the tax shall be assessed per motor vehicle at the following amounts: (a) mopeds, motorcycles from BGN 200 to BGN 475 (b) other motor vehicles from BGN 400 to BGN 95039. Roadside assistance services for road transport vehicles: from BGN 2,000 to BGN 4,000 per motor vehicle.40. Services involving the use of agricultural and forestry machinery: the tax shall be assessed per piece of machinery as follows: (a) combine harvester: from BGN 330 to BGN 660; (b) tractors, tractor trailers, self-propelled chassis and other self-propelled or self-powered machines: from BGN 110 to BGN 220; (c) attachments, mounted and stationary machines: from BGN 11 to BGN 22. - For more information visit www.solicitorbulgaria.com id: 337 Mon, 04 Aug 2008 06:49:29 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-2 http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-2 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/LOCAL_TAXES_AND_FEES_ACT1.JPG EUR http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-2 legal 80 negotiable Bulgarian Local Taxes and Fees Act, part 1 info@solicitorbulgaria.com (SolicitorBulgaria) Chapter One(Amended, SG No. 103/1999, amended and supplemented, SG No. 109/2001,No. 45/2002, No. 56/2002, amended, SG No. 119/2002)GENERAL PROVISIONSSection ILocal TaxesArticle 1. (1) (Redesignated from Article 1, SG No. 110/2007) The following local taxes shall accrue to the municipal budgets:1. immovable property tax;2. inheritance tax;3. gift tax;4. tax on onerous acquisition of property;5. transport vehicle tax;6. (repealed, SG No. 106/2004, new, SG No. 110/2007) licence tax;7. any other local taxes as determined by statute.(2) (New, SG No. 110/2007) The Municipal Council shall determine by ordinance the amount of the taxes covered under Paragraph (1) under the terms, according to the procedure and within the range established by this Act.(3) (New, SG No. 110/2007) Where the Municipal Council has failed to determine the amount of the local taxes for the current year until the end of the last preceding year, the local taxes shall be collected on the basis of the amount effective at… For more information visit http://www.solicitorbulgaria.com id: 338 Chapter One(Amended, SG No. 103/1999, amended and supplemented, SG No. 109/2001,No. 45/2002, No. 56/2002, amended, SG No. 119/2002)GENERAL PROVISIONSSection ILocal TaxesArticle 1. (1) (Redesignated from Article 1, SG No. 110/2007) The following local taxes shall accrue to the municipal budgets:1. immovable property tax;2. inheritance tax;3. gift tax;4. tax on onerous acquisition of property;5. transport vehicle tax;6. (repealed, SG No. 106/2004, new, SG No. 110/2007) licence tax;7. any other local taxes as determined by statute.(2) (New, SG No. 110/2007) The Municipal Council shall determine by ordinance the amount of the taxes covered under Paragraph (1) under the terms, according to the procedure and within the range established by this Act.(3) (New, SG No. 110/2007) Where the Municipal Council has failed to determine the amount of the local taxes for the current year until the end of the last preceding year, the local taxes shall be collected on the basis of the amount effective at the 31st day of December of the last preceding year.(4) (New, SG No. 110/2007) Changes in the amount and manner of determination of the local taxes, as adopted by the Municipal Council, shall be inadmissible in the course of the year.Article 2. (Amended, SG No. 106/2004, effective 1.01.2006) Local taxes shall be paid in cash at the cash departments of the municipal administration, or cashlessly, by means of crediting the relevant bank account.Article 3. Tax returns under this Act shall be submitted by the taxable persons or the legal representatives thereof in a standard form endorsed by the Minister of Finance, which shall be promulgated in the State Gazette.Article 4. (1) (Amended, SG No. 106/2004, effective 1.01.2006, SG No. 100/2005, SG No. 105/2005, supplemented, SG No. 105/2006) Local taxes shall be assessed, secured and collected by municipal administration officers according to the procedure established by the Tax and Social Insurance Procedure Code. The written statements related to local taxes shall be appealed according to the same procedure.(2) (Amended, SG No. 105/2005) Any delinquent taxes covered under this Act shall be collected with interest under the Interest on Taxes, Fees and Other State Receivables Act according to the procedure established by the Tax and Social Insurance Procedure Code. (3) (New, SG No. 100/2005, amended, SG No. 105/2005) In the proceedings referred to in Paragraph (1), the municipal administration officers shall have the rights and obligations of revenue authorities.(4) (New, SG No. 100/2005) The officers referred to in Paragraph (3) shall be designated by an order of the municipality mayor.(5) (New, SG No. 100/2005, amended, SG No. 105/2005) The municipality mayor shall exercise the powers of a deciding authority under Article 152 (2) of the Tax and Social Insurance Procedure Code , and the head of the local revenue unit in the relevant municipality shall exercise the powers of a territorial director of the National Revenue Agency.(6) (New, SG No. 100/2005, amended, SG No. 105/2005) The Executive Director of the National Revenue Agency shall issue methodological directions on the application of this Act.(7) (New, SG No. 105/2005) The Municipal Council shall be the authority competent to defer and reschedule local taxes in the cases referred to in Item 2 of Article 184 (1) of the Tax and Social Insurance Procedure Code.Article 5. (Amended, SG No. 100/2005, repealed, SG No. 110/2007). Section IILocal FeesArticle 6. (1) Municipalities shall collect the following local fees:(a) for disposal of household waste;(b) for use of retail markets, wholesale markets, fairs, sidewalks, squares and street roadways;(c) (Supplemented, SG No. 70/2004) for attendance at creches, provision of cooked take-away meals from baby-food kitchens, attendance at kindergartens, residence at public care homes, camps, dormitories, and use of other forms of municipal social services;(d) for quarrying;(e) for technical services;(f) for administrative services;(g) for lease of grave plots;(h) visitor fee;(i) (new, SG No. 87/2005) for dog ownership;(j) (redesignated from Letter (i), SG No. 87/2005) other local fees as determined by statute.(2) The (competent) Municipal Council shall set a price for any service provided or right granted by the municipality with the exception of such covered under Paragraph (1).Article 7. (1) Local fees shall be determined proceeding from the necessary logistical and administrative expenses incurred on provision of the service.(2) Fees shall be simple or proportional, and shall be payable by a cashless method, in cash, or in municipal revenue stamps within the time limits and according to the procedure established by this Act.Article 8. (1) The (competent) Municipal Council shall determine the amount of the fees in conformity with the following principles:1. recovery of the full amount of expenses incurred by the municipality on provision of the service;2. creation of conditions for expansion of the services provided and for improvement of the quality thereof;3. achievement of greater fairness in the determination and payment of local fees.(2) A separate fee shall be determined for each distinguishable activity into which a service can be disaggregated.(3) The amount of the fee may not recover the full amount of expenses incurred by the municipality for provision of a specific service should the (competent) Municipal Council resolve that this a protection of the public interest so dictates.(4) In the cases where the amount of the fees does not recover the full amount of expenses incurred for provision of the service, the difference between the said expenses and the amount of the fees shall be for the account of municipal revenues.(5) By the ordinance referred to in Article 9 herein, the (competent) Municipal Council shall establish the procedure according to which the persons who do not use a service during the relevant year or during a specific period of the said year shall be exempt from payment of the said fee.(6) (Amended, SG No. 110/2007) The (competent) Municipal Council may exempt certain categories of persons from full or partial payment of specific types of fees according to a procedure established by the ordinance referred to in Article 9 herein.Article 9. The (competent) Municipal Council shall adopt an ordinance on the determination and administration of local fees and prices for services.Article 9a. (1) Local fees shall be collected by the municipal administration.(2) (Amended, SG No. 106/2004, repealed, SG No. 100/2005).(3) Revenues from local fees shall accrue to the municipal budget.(4) (New, SG No. 105/2006) The competent Mayor shall authorize a rescheduling or deferral of liabilities for local fees to an amount not exceeding BGN 30,000 and subject to the condition that a rescheduling or deferral is requested within one year after the date of grant of the authorization.(5) (New, SG No. 105/2006) The competent Municipal Council shall authorize a rescheduling or deferral of liabilities for local fees exceeding BGN 30,000 or for a period longer than one year.Article 9b. (1) (Amended, SG No. 105/2006) Any delinquent fees shall be collected with interest under the Interest on Taxes, Fees and Other Such State Receivables Act according to the procedure established by the Tax and Social-Insurance Procedure Code .(2) Fees receivable shall be ascertained by a written statement drawn up by the (competent) Municipality Mayor according to the procedure established by the Administrative Procedure Code. (3) Any written statement ascertaining the receivable shall be appealable according to the procedure established by the Administrative Procedure Code. (4) (Amended, SG No. 84/2003, repealed, SG No. 105/2005).Article 9c. Where a municipal authority has been entrusted with the performance of an act or with the issuance of a document for which a stamp duty is charged, the fee charged shall accrue to revenue of the municipal budget.Chapter TwoLOCAL TAXESSection IImmovable Property TaxArticle 10. (1) (Amended, SG No. 106/2004) Immovable property tax shall be levied on the buildings and lots located within the territory of Bulgaria, which are situate within the development limits of the nucleated settlements and the dispersed settlements, as well as the lots outside such development limits, which, according to a detailed plan, have the intended purpose under Item 1 of Article 8 of the Spatial Development Act. (2) (New, SG No. 106/2004) No tax shall be levied on any lots occupied by streets, roads of the national and municipal road networks and the railway network, up to the delimiting building lines. No tax shall furthermore be levied on any lots occupied by water bodies constituting state and municipal property.(3) (Supplemented, SG No. 109/2001, renumbered from Paragraph 2, SG No. 106/2004)) No tax shall be levied on agricultural land tracts and forests, with the exception of developed land in respect of the actually developed surface area and the adjoining ground.(4) (New, SG No. 100/2005, amended, SG No. 105/2006) No tax shall be levied on any corporeal immovable whereof the assessed value does not exceed BGN 1,680.Article 11. (1) The taxable persons shall be the owners of taxable corporeal immovables.(2) (Supplemented, SG No. 153/1998, amended, SG No. 106/2004) The owner of a building constructed on a state-owned or municipal-owned lot shall furthermore be taxable in respect of the said lot.(3) (Supplemented, SG No. 109/2001, amended, SG No. 36/2006) Should a real right of use have been created, the user shall be the taxable person.(4) (New, SG No. 36/2006) In cases of concession, the tax liable person shall be the concessionaire.Article 12. (1) Where the right of ownership or the limited real right to a taxable corporeal immovable vests in several persons, liability for tax shall apply to the said persons in proportion to the parts thereto appertaining.(2) Any one of the co-owners of the property, and any one of the co- holders of the limited real right, as the case may be, may pay the tax on the entire property for the account of the rest.Article 13. Tax shall be payable irrespective of whether the corporeal immovables are used or not.Article 14. (Amended, SG No. 103/1999) (1) The owner of, or the holder of the limited real right to, any newly constructed or otherwise acquired property, as the case may be, shall notify the municipality exercising competence over the status of the property within two months after the said construction or acquisition by submission of a tax return for annual immovable property taxation.(2) Upon alteration in any circumstance relevant to the assessment of the tax, the taxable persons shall notify the municipality according to the procedure and within the time limit established under Paragraph (1).(3) (New, SG No. 102/2000) Upon acquisition of a property by succession, the tax return referred to in Paragraph (1) shall be submitted within the time limit referred to in Article 32 herein.(4) (New, SG No. 119/2002) The tax return submitted by one co owner or user, as the case may be, shall benefit the rest of the co-owners or users.Article 15. (1) In respect of any newly constructed building or part of a building, tax shall be due as from the commencement of the month next succeeding the month wherein the said building or part thereof was completed or when use thereof began.(2) Upon transfer of a property, the transferee shall be liable for tax as from the commencement of the month next succeeding the month wherein the alteration in ownership or use occurred, unless the tax has been paid by the transferor.Article 16. (1) (Amended, SG No. 103/1999, supplemented, SG No. 102/2000) Upon partial or complete destruction of a building, as well as upon change of the status of a corporeal immovable from non-taxable to taxable and vice versa, the taxable persons shall notify the municipality exercising competence over the status of the property according to the procedure and within the time limit established by Article 14 (1) herein.(2) In the instances under Paragraph (1), the liability for payment of the tax shall terminate or arise, as the case may be, as from the commencement of the month next succeeding the month wherein the change occurred.Article 17. (1) (Supplemented, SG No. 153/1998, amended, SG No. 103/1999, redesignated from Article 17 and amended, SG No. 102/2000, amended and supplemented, SG No. 109/2001, amended, SG No. 100/2005) Within two months after acquisition of any non-residential property or after creation of a right to use, as the case may be, any enterprise shall submit a declaration to the municipal administration exercising competence over the status of the said property, stating therein the type of property, the exact location thereof, the book value thereof and any other circumstances as shall be relevant to the assessment of the tax, as well as the amount of the tax due. Upon any change in the particulars as declared, a declaration shall be submitted within two months after the date of the said change.(2) (New, SG No. 102/2000) In respect of any residential property, the persons referred to in Paragraph (1) shall submit a tax return according to the procedure and within the time limits established by Article 14 herein.(3) (New, SG No. 102/2000, amended, SG No. 119/2002) In respect of any residential property referred to in Article 11 (2) herein, enterprises shall submit a declaration according to the procedure and within the time limits established by Article 14 (1) herein and, after communication of the assessed value by the municipal administration officer, shall state the said assessed value in the declaration referred to in Paragraph (1).(4) (New, SG No. 102/2000) The tax shall be paid within the time limits established by Article 28 herein at the municipality exercising competence over the situs of the property according to the particulars as declared.Article 18. (1) (Redesignated from Article 18, SG No. 153/1998, amended, SG No. 34/2000) The municipal administration officer shall verify the returns as submitted. The said authority may require additional information on the taxable property, to compare the particulars of the return with the books of account, plans, drawings and documents of title or use of the property and, when necessary, through surveying of the said property by the technical authorities.(2) (New, SG No. 153/1998, amended, SG No. 34/2000) When requested by the municipal administration officers to provide any data and evidentiary material of property status (copies of maps and plans, computer models, registers and other such), the competent public financed services shall be obliged to provide anysuch data and material gratuitously within seven days.(3) (New, SG No. 34/2000) Any data of the cadastre, coming under Paragraph (2), shall be provided under the terms and according to the procedure established by the Cadastre and Property Register Act. Article 19. (1) The tax shall be assessed on the basis of the assessed value of the corporeal immovables covered under Article 10 (1) herein at the 1st day of January in the year wherefor the tax is due.(2) (Repealed, SG No. 153/1998).(3) (New, SG No. 119/2002, supplemented, SG No. 112/2003, amended, SG. No. 100/2005) Upon any modification of the assessed value of a property during the year, the tax shall be assessed on the basis of the new assessed value as from the month next succeeding the month of the modification. In the case of change by the Municipal Councils of the boundaries of the zones within the nucleated settlements and the categories of the country-house zones or of the nucleated settlements, the tax shall be assessed on the basis of the new assessed value as from the 1st day of January in the next succeeding year.Article 20. (Amended, SG No. 109/2001) The assessed value of any corporeal immovables appertaining to individuals shall be determined by a municipal administration officer at rates according to Annex 2 hereto depending on the type of property, the location, space, structure and depreciation, and shall be communicated to the taxable persons.Article 21. (1) (Supplemented, SG No. 153/1998, amended, SG No. 102/2000, SG No. 109/2001) The assessed value of any corporeal immovable appertaining to enterprises shall be the book value of the said property, and the assessed value of any residential property shall be the assessed value arrived at according to Annex 2 hereto.(2) (New, SG No. 102/2000, amended, SG No. 109/2001) The assessed value of any corporeal immovable in respect whereof a right to use has been created in favour of an enterprise shall be the book value of the said immovable as shown in the balance sheet of the owner or the assessed value arrived at according to Annex 2 hereto and, in respect of residential property, the assessed value arrived at according to Annex 2 hereto.(3) (New, SG No. 109/2001) The assessed value of any property referred to in Article 11 (2) herein, whereon any buildings of enterprises have been constructed, shall be arrived at rates according to Annex 2 hereto.(4) (Renumbered from Paragraph (2), SG No. 102/2000, renumbered from Paragraph (3), SG No. 109 of 2001) Should accounting data be unavailable, the assessed value shall be determined by a municipal administration officer for the account of the taxable person. In such cases, the municipal administration officer may resort to the services of experts.Article 22. (Amended, SG No. 110/2007) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax within a range of 1.5 to 3 per mile of the assessed value of the corporeal immovable.Article 23. (Amended, SG No. 103/1999, SG No. 109/2001)The amount of tax referred to in Article 14 (1) and (3) herein and in Article 17 (2) herein shall be determined by the municipal administration officer exercising competence over the situs of the corporeal immovable and shall be communicated to the taxable person or to a legal representative thereof.Article 24. (1) The following shall be exempt from (immovable property) tax:1. (supplemented, SG No. 153/1998) the municipalities, in respect of any immovables constituting public municipal property;2. (supplemented, SG No. 153/1998) the State, in respect of any immovables constituting public state property, except where the immovable has been allocated for use to another person and said person is not exempt from tax;3. (repealed, SG No. 153/1998);4. the community centres (chitalishte);5. the buildings owned by foreign states which house diplomatic missions and consular posts, on a basis of reciprocity;6. (repealed, SG No. 153/1998);7. the buildings appertaining to the Bulgarian Red Cross;8. (amended, SG No. 153/1998, SG No. 119/2002) the buildings of the higher schools and the academies, used for teaching and scientific research;9. the houses of worship appertaining to lawfully registered religious denominations in Bulgaria;10. the parks, the sports grounds, the playgrounds and other such immovables for public use;11. (repealed, SG No. 153/1998);11a. (new, SG No. 109/2001) the buildings designated as cultural landmarks, where not used for a for-profit purpose;12. the museums, the galleries, and the libraries;13. (amended, SG No. 119/2002) the immovables which are directly used for the operation of public transport;14. the farm buildings appertaining to agricultural producers and used for agricultural activities;15. the temporary buildings servicing the construction of a new building or facility, until completion and commissioning of the said new building or facility;16. (supplemented, SG No. 153/1998, repealed, SG No. 110/2007); 17. (new, SG No. 153/1998) the corporeal immovables whereof the ownership has been restituted by law and which are unusable, for a period of five years. The tax on any such immovables, which are used by the State, the municipalities, the public organizations of by commercial corporations wherein they hold a participating interest, including privatized commercial corporations, shall be due from the users;18. (new, SG No. 18/2004, amended, SG No. 55/2007) the buildings which have been commissioned prior to 1 January 2005 and which have received a Category A certificate, issued according to the procedure established by the Energy Efficiency Act, as follows:(a) for a period of 7 years reckoned from the year following the year of issue of the certificate;(b) for a period of 10 years reckoned from the year following the year of issue of the certificate, if they apply also measures for utilization of renewable energy sources for production of energy for satisfying the needs of the building;19. (new, SG No. 18/2004, amended, SG No. 55/2007) the buildings which have been commissioned prior to 1 January 2005 and which have received a Category B certificate, issued according to the procedure established by the Energy Efficiency Act, as follows:(a) for a period of 3 years reckoned from the year following the year of issue of the certificate;(b) for a period of 5 years reckoned from the year following the year of issue of the certificate, if they apply also measures for utilization of renewable energy sources for production of energy for satisfying the needs of the building.(2) (Amended, SG No. 153/1998) Exemption under Items 1, 2, 4, 7, 8 and 9 of Paragraph (1) shall apply subject to the condition that the immovables are not used for a for-profit purpose unrelated to the core activity thereof.(3) (New, SG No. 153/1998, repealed, SG No. 109/2001).(4) (Renumbered from Paragraph (3) and amended, SG No. 153/1998, amended, SG No. 109 of 2001) Paragraphs (1) and (2) shall furthermore apply accordingly to any parts of properties.(5) (New, SG No. 112/2003) In respect of any immovables referred to in Item 17 of Paragraph (17) the right of ownership whereof was restored prior to the 1st day of January 1999, the five-year period shall begin to run from the said date, and in respect of any such immovables the right of ownership whereof was restored after the said date, the said period shall begin to run from the month next succeeding the month of restoration.Article 25. (1) A rate rebate of 50 per cent shall apply to the tax due on any immovable used as a main residence.(2) (Amended, SG No. 119/2002) In respect of any immovable used as a main residence by a person who has lost between 50 and 100 per cent of the working capacity thereof, a rate rebate of 75 per cent shall apply to the tax due.Article 26(Amended, SG No. 153/1998, SG No. 103/1999, repealed, SG No. 102/2000).Article 27. Any eligible person shall claim the rights thereof to exemption from tax or to enjoyment of a rate rebate by means of a tax relief submitted within the time limit under Article 14 (1) herein.Article 28. (1) (Supplemented, SG No. 153/1998, amended, SG No. 102/2000) Immovable property tax shall be payable in four equal instalments within the following periods: from the 1st day of February to the 31st day of March, not later than the 30th day of June, not later than the 30th day of September, and not later than the 30th day of November in the year wherefor the tax is due.(2) Any taxpayer, who or which prepays the amount of tax due for the whole year by the time limit for payment of the first instalment, shall enjoy a rate rebate of 5 per cent.(3) (New, SG No. 100/2005) Upon transfer of a corporeal immovable or upon creation of rights in rem to a corporeal immovable, the tax due until the said transfer or creation, including for the month of the transfer or creation, shall be paid by the transferor or creator prior to the said transfer or creation.(4) (Amended, SG No. 102/2000, supplemented, SG No. 109/2001, renumbered from Paragraph (3), SG No. 100/2005) Immovable property tax shall be credited to revenue of the budget of the municipality exercising jurisdiction over the immovable. The tax due from the concessionaire for an immovable located within the territory of more than one municipality shall be credited to revenue of the municipality whereof the territory shall contain the larger part of the said immovable.Section IIInheritance TaxArticle 29. (1) Inheritance tax shall be levied on the estate of any decedent Bulgarian citizen located within Bulgaria or abroad when devolved by legal or testamentary succession, as well as on the estate located within Bulgaria where so devolved by any decedent foreign citizen.(2) The estate of any decedent stateless person shall be taxed as an estate of a Bulgarian citizen, should the said person have been permanently resident within the territory of Bulgaria.Article 30. (1) A decedent's estate shall incorporate the movable and immovable things owned by the ancestor and the rights to any such things, as well as the ancestor's other property rights, receivables and liabilities at the time of the opening of the succession, save as otherwise provided by statute.(2) Inheritance tax shall furthermore be levied on any property devolving directly on a third party in the event of death of the ancestor pursuant to a contract concluded by the ancestor.(3) Paragraph (2) shall not apply if the contract was concluded to fulfil an obligation imposed by statute.Article 31. (1) (Redesignated from Article 31, SG No. 106/2004) Liability for inheritance tax shall apply to the legal or testamentary heirs as well as to the legatees.(2) (New, SG No. 106/2004) Inheritance tax shall not be paid by the surviving spouse and by the lineal heirs without restraint.Article 32. (1) (Amended, SG No. 103/1999) Within six months after the opening of a succession, any taxable person covered under Article 31 herein or the legal representative thereof shall be obligated to submit a declaration to the municipality exercising competence over the last fixed abode of the ancestor or, should the ancestor have been domiciled abroad, to the municipality exercising competence over the situs of the larger part of the estate of the ancestor within Bulgaria.(2) For any heir or legatee other than a spouse, descendant, parent, or sibling, the six-month time limit for submission of the declaration shall begin to run from the day of learning that the succession has opened.(3) In respect of the estates of persons declared absent by the court, the declaration shall be submitted by the heirs apparent to the person declared absent at the time when the said person was last heard from. In such a case, the six-month time limit for submission of the declaration shall begin to run from the entry into possession.(4) Where the heir is a person who has been conceived at the time of opening of the succession and was born living, the time limit under Paragraph (1) in respect of the legal representatives of any such person shall begin to run from the date of birth of the said person.(5) Any declaration submitted in due course by one heir shall benefit the other heirs as well.(6) In the declaration, the heirs shall itemize the decedent's estate as inherited by type, location and value.(7) Any decedent's estate of which the taxable persons learn the time limit under the foregoing paragraphs has expired, shall be declared within one month after the day of learning about the estate. In such cases, the tax due shall be recalculated.Article 33. (1) Any decedent's estate, with the exception of such exempt from tax, shall be identified and valued in lev terms at the date of the opening of the succession, as follows:1. the corporeal immovables: at the assessed value arrived at according to Annex 2 hereto;2. the foreign currency and precious metals: at the central exchange rate of the Bulgarian National Bank;3. the securities: at fair market value or, where the fair market value cannot be established without considerable cost or difficulty, at face value;4. (Amended, SG No. 109/2001, SG No. 45/2002) the transport vehicles: at the insured value;4a. (New, SG No. 109/2001, repealed, SG No. 45/2002);5. any other movable things and rights: at fair market value;6. the enterprises or participating interests in commercial corporations or cooperatives: at fair market value or, where determination of the said value requires considerable expense or causes difficulties, according to accounting data.(2) The liabilities of the ancestor shall likewise be valued according to the procedure established by Paragraph (1).(3) Any rights and liabilities of the ancestor, which have not been established in terms of either legal grounds or amount, shall be declared but shall be valued and taken into consideration upon determination of the taxable estate being established in terms of legal grounds and amount. In such case, the tax due shall be recalculated.(4) Upon request by a municipal administration officer or an interested party, the insurers shall issue a certificate of the insured value of the thing within seven days.Article 34. The assets of the taxable estate as determined according to the procedure established by Article 33 herein shall be debited with the following items:1. the liabilities of the ancestor at the time of opening of the succession, established in terms of legal grounds and amount, unless property exempt from inheritance tax is acquired against such liabilities; any payables to creditors, whereof the claims to the ancestors are extinguished by prescription and are unrealized within the six-month time limit under Article 32 herein, shall not be set off;2. the rights and receivables transferred by the heirs in favour of the State or the municipalities according to the procedure established by the law within the six month time limit under Article 32 herein;3. (Amended, SG No. 153/1998) the funeral expenses up to the amount of BGN 1,000;4. any reliefs provided for by the law.Article 35. (1) The taxable estate shall be divided into portions, and each heir shall be allocated a portion according to the procedure established by the Succession Act. (2) The value of the legacies, valued according to the procedure established by Article 33 herein, shall be added or subtracted from the portions, as the case may be.Article 36. (Amended, SG No. 106/2004, SG No. 110/2007) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax separately in respect of each heir or legatee, as follows:1. applicable to siblings and the children of siblings: from 0.7 to 1.4 per cent per portion in excess of BGN 250,000;2. applicable to any persons other than such referred to in Item 1: from 5 to 10 per cent per portion in excess of BGN 250,000.Article 37. (Amended, SG No. 103/1999, SG No. 105/2005) The tax shall be assessed and shall be communicated to each legal or testamentary heir according to the procedure established by the Tax and Social Insurance Procedure Code. Article 38. (1) The following shall be exempt from tax:1. the estate of those who fell for the Republic of Bulgaria or in the line of duty, or who died in industrial accidents or natural disasters;2. (supplemented, SG No. 109/2001, SG No. 119/2002) the estate settled on the State, the municipalities, the Bulgarian Red Cross, the lawfully registered religious denominations in Bulgaria, the community centres (chitalishte) and other legal persons which are not merchants, with the exception of the non-profit organizations designated for pursuit of private- benefit activities;3. any ordinary household furnishings;4. any small farm implements;5. libraries and musical instruments;6. any works of art whereof the author is the ancestor, any of the heirs or a lineal relative thereof up to any degree of consanguinity, or a collateral relative up to the fourth degree of consanguinity;7. the ancestor's pensions payable;8. the estates of Bulgarian citizens located abroad, in respect of which inheritance tax has been paid in the respective State.(2) Should any two persons, of whom one is heir to the other, have died simultaneously or in immediate succession, no tax shall be due on the portion acquired by the deceased heir.(3) Exemption under Items 3, 4 and 5 of Paragraph (1) shall apply only to lineal heirs, spouses, and siblings.Article 39. Should any immovable property have devolved to the ancestor by succession, the decedent's estate shall include 40 per cent of the assessed value of the said property if acquired within one year prior to the death of the ancestor; 50 per cent, if acquired within two years prior to the death thereof, and 60 per cent, if acquired within three years prior to the death thereof.Article 40. (1) (Amended, SG No. 103/1999) Inheritance tax shall fall due for payment within two months after service of the notice.(2) Should the decedent's estate comprise the enterprise of a sole trader, participating interest in a general partnership, interests and shares representing more than 50 per cent of the capital of commercial corporations, the tax due may be paid within one year after the opening of the succession together with the legal interest, which shall begin to accrue upon the lapse of the two-month time limit referred to in Paragraph (1).Article 41. (1) (Amended, SG No. 103/1999, supplemented, SG No. 102/2000) Sums held on accounts of decedents shall be paid to the heirs of holders upon presentation of a certificate issued by the municipality, certifying that the said sums have been declared in the inheritance tax return and the tax has been paid. Should the tax be not paid, the said tax shall be withheld and credited to the account of the competent municipality within one month after presentation of a document on the amount of the tax due, and the heirs shall be paid sums up to the amount of the balance on the account of ancestor.(2) Paragraph (1) shall furthermore apply to payment of indemnities on a contract for life insurance, concluded by the ancestor in favour of third- party beneficiaries.(3) (Amended, SG No. 103/1999) The transfer of any registered shares and other securities which appertained to decedent persons or to persons who have been declared absent shall be executed proceeding from a certificate issued by the municipality exercising competence over the place of opening of the succession, certifying that the said securities have been declared in the inheritance tax return and the inheritance tax due has been paid.Article 42. (Amended, SG No. 103/1999, repealed, SG No. 100/2005).Article 43. (Amended, SG No. 103/1999) Any banks, insurance companies and other commercial corporations, as well as any other entities which are deposit keepers or obligors for securities, money or other property incorporated into a succession of which they know that it has opened, shall be obligated to transmit an inventory of the property to the municipality exercising competence over the place of opening of the succession prior to the payment, delivery or transfer of any such property.Section IIIGift Tax and Tax on Onerous Acquisition of PropertyArticle 44. (1) Tax shall be levied on any properties acquired by donation, as well as on any onerously acquired corporeal immovables, limited real rights thereto, and motor vehicles.(2) Any properties acquired gratuitously in any manner other than by donation, as well as any liabilities extinguished by remission, shall likewise attract a tax to the same amount as gift tax.(3) (New, SG No. 112/2003, amended, SG No. 106/2004) Paragraph (1) shall not apply to any motor vehicles which have been imported into Bulgaria as new.(4) (Renumbered from Paragraph (3) and supplemented, SG No. 112/2003) Paragraph (2) shall not apply should the transfer be effected to fulfil an obligation imposed by a law or in pursuance of an act of the Council of Ministers on gratuitous allocation of properties to investors under priority investment projects.(5) (New, SG No. 106/2004) No tax shall be levied on any properties acquired by donation between lineal relatives and between spouses.Article 45. (1) The tax shall be paid by the transferee of the property covered under Article 44 herein, and in the case of exchange, by the person acquiring the more valuable property, unless otherwise agreed. Should it be agreed that the tax is due by both parties, they shall incur solidary liability. Should the parties have agreed that the tax is due by the transferor, the other party shall stand surety.(2) Where the transferee of the property is abroad, the transferor shall be liable for the tax.Article 46. (1) The base for assessment of the tax shall be the assessed value of the property in lev terms at the time of the transfer.(2) The property shall be valued as follows:1. (Amended, SG No. 153/1998) corporeal immovables and limited real rights thereto: at the price agreed or at a price as set by a state or municipal authority or, should the said price be lower than the assessed value, at the assessed value arrived at according to Annex 2 hereto;2. (amended, SG No. 109/2001, SG No. 110/2007) any other properties: according to the procedure established by Items 2, 3, 4 and 5 of Article 33 (1) herein.(3) (New, SG No. 102/2000) The assessed value under Annex 2 in respect of any properties referred to in Item 1 of Paragraph (2) shall be arrived at proceeding from the particulars and characteristics contained in the declaration referred to in Article 14 (1) herein.Article 47. (1) (Amended, SG No. 110/2007) Upon donation of property, as well as in the cases covered under Article 44 (2) herein, tax shall be charged on the assessed value of the transferred property in an amount determined by the Municipal Council by the ordinance referred to in Article 1 (2) herein as follows:1. (amended, SG No. 106/2004, redesignated from Littera (b) and amended, SG No. 110/2007) from 0.7 to 1.4 per cent: applicable to donations between siblings and the children of siblings;2. (amended, SG No. 106/2004, redesignated from Littera (c) and amended, SG No. 110/2007) from 5 to 10 per cent: applicable to donations between any persons other than the persons referred to in Littera (b) sic, must be Item 1 - Translator's Note.(2) (Amended, SG No. 110/2007) Where property is onerously acquired, the tax shall be determined by the Municipal Council at a rate of 2 to 4 per cent of the assessed value of the transferred property, and in the case of exchange, of the assessed value of the more valuable property.(3) Upon partition of property resulting in an increase of the portion held before the partition, tax shall be charged on the increment.Article 48. (1) The following shall be exempt from tax:1. any properties acquired by:(a) the State and the municipalities;(b) (supplemented, SG No. 153/1998) any Bulgarian public-financed health, educational, cultural and scientific research organizations, as well as any public care homes and care homes for orphaned and abandoned pre-school children;(c) the Bulgarian Red Cross;(d) (amended, SG No. 106/2004) the nationally representative organizations of people with disabilities and for people with disabilities;(e) any funds providing relief to victims of natural disasters and financing the conservation and restoration of historical and cultural landmarks;2. (amended, SG No. 106/2004) any donations for medical treatment of Bulgarian citizens, as well as of technical aids for people with disabilities;3. (amended, SG No. 119/2002) any humanitarian donations to persons who have lost between 50 and 100 per cent of the working capacity thereof and to socially disadvantaged individuals;4. (amended, SG No. 109/2001, supplemented, SG No. 105/2006) any donations for not-for-profit legal entities which receive subsidies from the central-government budget, and any not-for-profit legal entities, registered in the Central Register of Not-for-Profit Legal Entities designated for pursuit of public-benefit activities, in respect of any donations received and provided;5. any customary gifts;6. any property transferred gratuitously in fulfilment of an obligation arising under statute;7. any donations in favour of community centres (chitalishte);8. (amended, SG No. 28/2002) any properties acquired according to the procedure established by the Privatization and Post-privatization Control Act; 9. any non-cash assets contributed towards an allotment in the capital of a commercial corporation, a cooperative or a non-profit corporation;10. (new, SG No. 112/2003) the foreign States in respect of acquisition of corporeal immovables: on a basis of reciprocity.11. (new, SG No. 103/2005) any assistance provided gratuitously under the terms and according to the procedure established by the Financial Support for Culture Act.(2) Should any property received under Paragraph (1) be transferred to third parties, the uncollected tax shall become due if it is proven that the transfer is not connected to attainment of the immediate objectives wherefore the respective organization, listed under Paragraph (1), has been established, or where the said objectives have been cited as ground for exemption from tax.Article 49. (Amended, SG No. 103/1999, supplemented, SG No. 102/2000, amended and supplemented, SG No. 109/2001, SG No. 119/2002, amended, SG No. 112/2003) (1) The tax shall be paid at the municipality exercising competence over the situs of the corporeal immovable, and in the remaining cases, (at the municipality exercising competence over) the permanent address or the registered office of the taxable person, as the case may be. Any person who does not have a permanent address shall pay the tax according to the current address thereof.(2) The tax shall be paid upon the transfer of the corporeal immovable, the limited real rights to a corporeal immovable and the motor vehicles.(3) Upon gratuitous acquisition of property in cases other than such under Paragraph (2), the acquirers of property shall submit a return for taxation of the said property and shall pay the tax within two months after receipt.Article 50. Judges, notaries, regional governors, municipality mayors and other public officials shall execute the transaction or the act whereby real rights are acquired, created, modified or terminated after ascertaining that the tax due under this Chapter has been paid.Article 51. (1) (Amended, SG No. 103/1999, SG No. 36/2004) The recording offices shall notify the competent municipality of any transferred, created, modified or terminated real rights to corporeal immovables within seven days, and the Ministry of the Interior and the other competent authorities shall notify (the competent municipality) of any motor vehicles which have been registered, deregistered and suspended from operation within seven days.(2) The time limit referred to in Paragraph (1) shall begin to run as from the day next succeeding the (day of) recording or registration, deregistration or suspension from operation of the transport vehicle, as the case may be.Section IVTransport Vehicle TaxArticle 52. Transport vehicle tax shall be levied on:1. (amended, SG No. 112/2003) any motor vehicles registered for operation on the road network in the Republic of Bulgaria;2. any ships recorded in the registers of the Bulgarian ports;3. (amended, SG No. 109/2001) any aircraft recorded in the state register of civil aircraft of the Republic of Bulgaria.Article 53. The tax shall be paid by the owners of the transport vehicles.Article 54. (Amended, SG No. 103/1999) (1) (Redesignated from Article 54 and amended, SG No. 109/2001, amended and supplemented, SG No. 112/2003, SG No. 106/2004) The owners of transport vehicles shall declare the transport vehicles owned thereby to the municipality exercising competence over the permanent address or the registered office thereof, as the case may be, within two months after acquisition of any such vehicles. In respect of any transport vehicles, which have not been registered for operation within Bulgaria, the two-month time limit shall begin to run as from the date of registration of any such vehicles for operation. Upon acquisition of a transport vehicle by succession, the declaration shall be submitted within the time limit established by Article 32 herein.(2) (New, SG No. 109/2001) Where the owners of transport vehicles have no permanent address or registered office, as the case may be, within the territory of Bulgaria, declarations shall be submitted to the municipality exercising competence over the (place of) registration of the transport vehicle.(3) (New, SG No. 119/2002, amended, SG No. 105/2006) The owners of transport vehicles shall claim the right thereof to exemption from tax or to enjoyment of a rate rebate by means of a tax return submitted within the time limit under Paragraph (1). No such return shall be submitted in the event of theft or destruction of a transport vehicle.(4) (New, SG No. 119/2002, amended, SG No. 105/2006) The municipal administration officer may require presentation of documents certifying facts and circumstances relevant to taxation. Upon theft or destruction of a transport vehicle, the taxable person shall present a document issued by a competent authority and certifying the relevant circumstance.(5) (New, SG No. 119/2002) The tax return submitted by one of the co-owners shall benefit the rest of the co-owners.(6) (New, SG No. 109/2001, renumbered from Paragraph (3), SG No. 119/2002) Where data on the year of manufacture of the road transport vehicle shall be unavailable, the year of the first registration thereof shall be treated as the year of manufacture.(7) (New, SG No. 106/2004, supplemented, SG No. 105/2006) Upon submission of a declaration under Paragraph (1), the owner shall present a documentary proof of the tax paid upon acquisition of the transport vehicle declared, and in the cases referred to in Article 168 of the Value Added Tax Act, a document certifying remittance of the value added tax.(8) (New, SG No. 100/2005, amended, SG No. 110/2007) Where the certificate of registration of the transport vehicles covered under Article 55 (7) herein does not state any data on the permissible maximum weight of the combination of transport vehicles, the permissible maximum weight of the combination of transport vehicles as designated by the manufacturer shall be stated in the declaration referred to in Paragraph (1).Article 55. (Amended and supplemented, SG No. 153/1998, amended, SG No. 109/2001, SG No. 45/2002, SG No. 112/2003, supplemented, SG No. 106/2004, amended, SG No. 100/2005, SG No. 105/2006, SG No. 110/2007) (1) In respect of passenger cars, by the ordinance referred to in Article 1 (2) the Municipal Council shall determine the amount of tax in conformity with the engine power, adjusted by a coefficient depending on the year of manufacture, as follows:1. up to 37 kW inclusive: from BGN 0.34 to BGN 1.02 per kW;2. from 37 kW to 55 kW inclusive: from BGN 0.40 to BGN 1.20 per kW;3. from 55 kW to 74 kW inclusive: from BGN 0.54 to BGN 1.62 per kW;4. from 74 kW to 110 kW inclusive: from BGN 1.10 to BGN 3.30 per kW;5. over 110 kW: from BGN 1.23 to BGN 3.69 per kW.Depending on the year of manufacture, the tax shall be multiplied by the following coefficients:Number of years since year of manufacture, incl. year of manufacture CoefficientMore than fourteen years 1Less than five and more than fourteen years inclusive 1.5Up to five years inclusive 2.8 (2) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax in respect of passenger car trailers as follows:1. cargo trailer: from BGN 5.00 to BGN 15.00;2. camping trailer: from BGN 10.00 to BGN 30.00.(3) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax in respect of mopeds at BGN 10.00 to BGN 30.00, and the amount in respect of motorcycles as follows:1. up to 125 cm inclusive: from BGN 12.00 to BGN 36.00;2. over 125 and up to 250 ccm inclusive: from BGN 25.00 to BGN 75.00;3. over 250 and up to 350 ccm inclusive: from BGN 35.00 to BGN 105.00;4. over 350 and up to 490 ccm inclusive: from BGN 50.00 to BGN 150.00;5. over 490 and up to 750 ccm inclusive: from BGN 75.00 to BGN 225.00;6. over 750 ccm: from BGN 100.00 to BGN 300.00.(4) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax in respect of tracers on the basis of the total weight as follows:1. up to 400 kg inclusive: from BGN 4.00 to BGN 12.00;2. over 400 kg: from BGN 6.00 to BGN 18.00.(5) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of the tax in respect of buses depending on the number of seats as follows:1. up to 22 seats, including the driver's seat: from BGN 50.00 to BGN 150.00;2. over 22 seats, including the driver's seat: from BGN 100.00 to BGN 300.00.(6) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of tax in respect of cargo trucks of up to 12 tonnes of legally permissible maximum weight at BGN 10.00 to BGN 30.00 per tonne of load-carrying capacity or fraction.(7) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the tax in respect of truck tractors and trailer tractors depending on the permissible maximum weight of the combination of transport vehicles, of the number of axles and the type of suspension of the tractor, indicated in the certificate of registration of the tractor as follows:Number of axles of the truck tractor/ trailer tractor Permissible maximum weight of the combination of transport vehicles, indicated in the certificate of registration of the tractor Tax (BGN) equal or greater than less than driving axle/axles with pneumatic or pneumatic-equivalent suspension other suspension systems of the driving axle or axles(A) two axles - 18 from 8 to 24 from 28 to 84 18 20 from 28 to 84 from 64 to 192 20 22 from 64 to 192 from 147 to 441 22 25 from 190 to 570 from 342 to 1,026 25 26 from 342 to 1,026 from 600 to 1,800 26 28 from 342 to 1,026 from 600 to 1,800 28 29 from 331 to 993 from 399 to 1,197 29 31 from 399 to 1,197 from 655 to 1,965 31 33 from 655 to 1,965 from 909 to 2,727 33 38 from 909 to 2,727 from 1,381 to 4,143 38 - from 1,007 to 3,021 from 1,369 to 4,107(B) three and more axles 36 38 from 640 to 1,920 from 888 to 2,664 38 40 from 888 to 2,664 from 1,228 to 3,684 40 - from 1,228 to 3,684 from 1,817 to 5,451 (8) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the amount of tax in respect of special-purpose construction vehicles (concrete delivery trucks, concrete pumps etc.), crane trucks, special-purpose trailers for transportation of heavyweight or oversize loads and other special-purpose automobiles, excluding electric buses, at BGN 50.00 to BGN 150.00.(9) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the amount of tax in respect of crane trucks of load-carrying capacity exceeding 40 tonnes, special-purpose trailers of load-carrying capacity exceeding 40 tonnes for transportation of heavyweight or oversize loads, at BGN 100.00 to BGN 300.00.(10) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the amount of tax in respect of tractors as follows:1. from 11 kW to 18 kW inclusive: from BGN 5.00 to BGN 15.00;2. over 18 kW and up to 37 kW inclusive: BGN 7.00 to BGN 21.00;3. over 37 kW: from BGN 10.00 to BGN 30.00.(11) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the amount of tax in respect of any other self-propelled vehicles at BGN 25.00 to BGN 75.00.(12) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the amount of tax in respect of motor sleds at BGN 50.00 to BGN 150.00.(13) By the ordinance referred to in Article 1 (2), the Municipal Council shall determine the tax in respect of cargo trucks of permissible maximum weight exceeding 12 tonnes depending on the permissible maximum weight, the number of axles and the type of suspension as follows:Number of motor vehicle axles Permissible maximum weight Tax (BGN) equal or greater than less than driving axle or axles with pneumatic or pneumatic-equivalent suspension other suspension systems of the driving axle or axles(A) two axles 12 13 from 30 to 90 from 61 to 183 13 14 from 61 to 183 from 168 to 504 14 15 from 168 to 504 from 237 to 711 15 - from 237 to 711 from 536 to 1,608(B) three axles 15 17 from 61 to 183 from 106 to 318 17 19 from 106 to 318 from 217 to 651 19 21 from 217 to 651 from 282 to 846 21 23 from 282 to 846 from 434 to 1,302 23 - from 434 to 1,302 from 675 to 2,025(C) four axles 23 25 from 282 to 846 from 286 to 858 25 27 from 286 to 858 from 446 to 1,338 27 29 from 446 to 1,338 from 708 to 2,124 29 - from 708 to 2,124 from 1,050 to 3,150 Article 56. (Amended and supplemented, SG No. 153/1998. SG No. 109/2001, amended, SG No. 100/2005, SG No. 110/2007) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of tax in respect of:1. ships recorded in the registers of small ships at Bulgarian ports and such recorded in the municipal registers for ships operated on the internal waters without contact with the Black Sea and the River Danube, excluding yachts and scooters: at BGN 1.00 to BGN 3.00 per gross ton or fraction;2. ships excluding yachts, scooters, tug boats and push boats, recorded in the register of large ships at Bulgarian ports: at BGN 1.00 to BGN 3.000 per gross ton or fraction up to 40 gross tons inclusive, and at BGN 0.10 to BGN 0.30 per gross ton or fraction in excess of 40 gross tons;3. jetski: at BGN 100.00 to BGN 300.00 per item;4. yachts and motor cruisers: at BGN 20.00 to BGN 60.00 per gross ton or fraction;5. scooters: at BGN 2.70 to BGN 8.10 per kilowatt;6. tug boats and push boats: at BGN 0.14 to BGN 0.42 per kilowatt;7. river-going non-self propelled navigation vessels: at BGN 0.50 to BGN 1.50 per ton deadweight.Article 57. (Amended, SG No. 109/2001, SG No. 110/2007) By the ordinance referred to in Article 1 (2) herein, the Municipal Council shall determine the amount of tax in respect of civil aircraft as follows:1. in respect of airplanes in service with a valid airworthiness certificate and in respect of helicopters: at BGN 20.00 to BGN 40.00 per ton of maximum take-off weight or fraction;2. in respect of para gliders: at BGN 12.00 to BGN 24.00;3. in respect of hang gliders: at BGN 12.00 to BGN 24.00;4. in respect of powered gliders: at BGN 20.00 to BGN 40.00;5. in respect of free balloons: at BGN 30.00 to BGN 60.00;6. in respect of gliders: at BGN 30.00 to BGN 60.00.Article 58. (1) The following transport vehicles shall be exempt from (transport vehicle) tax:1. (Amended, SG No. 153/1998) any transport vehicles owned by state and municipal bodies and by public-financed organizations which enjoy special traffic privileges, as well as ambulances and fire trucks appertaining to other persons;2. any vehicles owned by diplomatic missions and consulates, on a basis of reciprocity;3. any vehicles owned by the Bulgarian Red Cross, where used for the purposes of the said organization;4. (amended, SG No. 153/1998, SG No. 112/2003, SG No. 100/2005) any tricars or passenger cars owned by disabled persons who have lost between 50 and 100 per cent of the working capacity thereof, of an engine capacity not exceeding 1,800 cubic centimetres and engine power not exceeding 74 kW.(2) (Repealed, SG No. 109/2001).(3) Upon transfer of ownership of a transport vehicle, the new owner shall not pay the tax should the previous owner have paid the said tax for the time remaining until the end of the calendar year (wherein the transfer was effected).(4) (New, SG No. 45/2002, amended, SG No. 105/2006) No tax shall be collected in respect of any transport vehicle which shall not be operated, subject to the condition that the owner of the said vehicle has surrendered the registration certificate and has presented a certificate of dismantling prior to the end of the last preceding year.Article 59. (1) (Amended, SG No. 100/2005) A rate rebate of 50 per cent shall apply to the tax on passenger cars of engine power not exceeding 74 kW, equipped with operative catalytic converters.(2) (Amended, SG No. 109/2001, SG No. 45/2002, SG No. 100/2005, SG No. 105/2006, SG No. 110/2007) A rate rebate of 50 per cent shall apply to the tax under Article 55 (5), (6), (7) and (13) herein in respect of buses, cargo trucks, trailer tractors and truck tractors equipped with low-emission engines satisfying the Euro 2, Euro 3, Euro 4 and Euro 5 standards.(3) (Amended and supplemented, SG No. 109/2001, amended, SG No. 45/2002) A rate rebate of 10 per cent shall apply to the amount of tax arrived at according to the procedure established by Article 55 (5) herein in respect of buses operated in public carriage of passengers on Scheduled bus services in urban settlements and in sparsely populated mountain and border areas, which lines are subsidized by the municipalities, subject to the condition that the said buses are not used for other purposes.Article 60. (1) (Transport vehicle) tax shall be payable in two equal instalments, not later than: the 31st day of March and the 30th day of September in the year wherefor the tax is due. Any taxpayer, who or which prepays the amount of tax due for the whole year by the time limit for payment of the first installment, shall enjoy a rate rebate of 5 per cent.(2) (Amended, SG No. 112/2003, SG No. 106/2004) In respect of any transport vehicle acquired or registered for operation during a relevant current year, the tax shall be paid within two months after the day of acquisition or after the date of registration, as the case may be, in an amount equivalent to one-twelfth of the annual tax for each month remaining until the end of the year, including the month of acquisition or of the registration for operation, as the case may be.(3) (Repealed, SG No. 109/2001).(4) (Repealed, SG No. 109/2001).(5) (Amended, SG No. 102/2000, SG No. 112/2003) In respect of any destroyed or stolen transport vehicle, the tax paid shall be refunded in proportion to the number of clear months remaining until the end of the year, reckoned from the month of occurrence, upon presentation of a (supporting) document issued by the relevant competent authority.(6) (Amended, SG No. 105/2006) Payment of the tax shall be condition for compliance at the annual inspection of the transport vehicle.(7) (New, SG No. 45/2002, repealed, SG No. 105/2006).(8) (New, SG No. 45/2002, amended, SG No. 105/2006) In respect of any transport vehicle acquired in inoperable condition, the tax shall be paid according to the procedure and within the time limits established under Paragraph (2).(9) (New, SG No. 112/2003) In any cases other than such provided for, upon change of any circumstance relevant to assessment of the tax, the tax liability shall be modified as from the beginning of the month next succeeding the month of occurrence of the change.Article 61. (Amended, SG No. 109/2001, SG No. 112/2003) (Transport vehicle) tax shall be credited to revenue of the municipality where the owner of the transport vehicle, who has submitted the declaration, has his, her or its permanent address or registered office, as the case may be, and where no such declaration has been submitted and in the cases under Article 54 (2) herein, to revenue of the municipality where the transport vehicle has been registered.Section V(New, SG No. 109/2001, repealed, SG No. 106/2004) Road TaxArticle 61a. (Amended, SG No. 6/2004, repealed, SG No. 106/2004) Article 61b. (Repealed, SG No. 106/2004). Article 61c. (Repealed, SG No. 106/2004). Article 61d. (Amended, SG No. 6/2004, repealed, SG No. 106/2004) Article 61e. (Amended, SG No. 112/2003, repealed, SG No. 106/2004) Article 61f. (Supplemented, SG No. 112/2003, repealed, SG No. 106/2004) Article 61g. (Supplemented, SG No. 112, repealed, SG No. 106/2004). Section VI(New, SG No. 110/2007)Licence TaxArticle 61h. (New, SG No. 110/2007) (1) An annual licence tax shall be levied on any natural person, including a sole trader, who carries out any activity specified in Annex 4 hereto (licence activity), in respect of the income accruing from any such activity, provided that:1. the turnover of the person for the last preceding year does not exceed BGN 50,000, and2. the person is not registered under the Value Added Tax Act, with the exception of registration for intra-Community acquisition under Article 99 and Article 100 (2) of the said Act. (2) In respect of the licence activity carried out, the persons referred to in Paragraph (1) shall not be taxed according to the procedure established by the Income Taxes on Natural Persons Act. (3) The persons referred to in Paragraph (1) shall apply the provisions on taxes withheld at source and on taxation of expenses under Item 2 of Article 204 of the Corporate Income Tax Act. Article 61i. (New, SG No. 110/2007) (1) Where, within twelve successive months, any one natural person has ceased to carry out a licence activity and/or has formed a new enterprise which carries out a licence activity, and the aggregate turnover of the said two enterprises exceeds BGN 50,000 for twelve successive months, Article 61k herein shall not apply to any such newly formed enterprise. In such a case, the newly formed enterprise shall be subject to taxation according to the standard procedure established by the Income Taxes on Natural Persons Act for the current tax year.(2) Where, within the current tax year, the turnover of the person exceeds BGN 50,000 or the person registers under the Value Added Tax Act, the said person shall be taxed according to the standard procedure established by the Income Taxes on Natural Persons Act. (3) In the cases under Paragraphs (1) and (2), the licence tax for the current year shall be payable until the end of the quarter preceding the quarter during which the circumstances referred to in Paragraphs (1) and (2) have occurred.(4) In the cases under Paragraphs (1) and (2), the tax payable or remitted, as the case may be, shall be deducted from the annual tax liability according to the procedure established by the Income Taxes on Natural Persons Act. (5) At the request of the person, the municipality shall issue a certificate of the amount of licence tax due, for which no fee shall be charged.(6) Where, within the current tax year the person deregisters under the Value Added Tax Act, the said person shall be taxed according to the standard procedure established by the Income Taxes on Natural Persons Act for the entire tax year.Article 61j. (New, SG No. 110/2007) (1) The Municipal Council shall determine the amount of the licence tax within the ranges according to Annex 4 hereto depending on the location of the establishment within the territory of the relevant municipality.(2) The Municipal Council may determine a different amount of licence tax for one and the same activity in different nucleated settlements within the territory of the municipality, as well as in different zones within the territory of one and the same nucleated settlement. The nucleated settlements in the municipalities shall be zoned for the purposes of the licence tax by the ordinance referred to in Article 1 (2) herein.(3) The Municipal Council shall determine the amount of the tax reckoning with the following criteria: location of the nucleated settlement/zone, type of nucleated settlement, considering whether the said settlement is of local or national importance, number of residents and size of the nucleated settlement/zone, economic importance of the nucleated settlement/zone, seasonal or permanent nature of the activity, state of economic affairs of the nucleated settlement.(4) Where the licence activity is not carried out at an establishment or is not carried out from a fixed location, the permanent address of the person shall be treated as a location of the establishment for the purposes of determination of the amount of the licence tax.Article 61k. (New, SG No. 110/2007) (1) A licence tax shall be due separately for each of the activities practised according to Annex 4 hereto.(2) The persons who carry out a licence activity at more than one establishment shall be liable to tax for each establishment separately.(3) Where the licence activity commences or ceases in the course of the year, with the exception of the activity specified in Items 1 and 2 of Annex 4 hereto, the tax shall be assessed in proportion to the number of quarters during which the said activity is carried out, including the quarter of commencement or cessation of the said activity.(4) Where within any single licence activity, with the exception of the activities specified in Items 1 and 2 of Annex 4 hereto, any circumstance related to the determination of the tax changes in the course of the year, the amount of the tax until the end of the year, including for the quarter of the change, shall be determined on the basis of the amount of the tax determined conforming to the changes in the circumstances.(5) Where within any single licence activity of those specified in Items 1 and 2 of Annex 4 hereto any circumstance changes in the course of the year and this leads to determination of the licence tax in a larger amount, the larger amount of the tax, as determined conforming to the changes in the circumstances, shall be due for the tax year.(6) Any income accruing from any activity which is not specified in Annex 4 hereto shall be taxed according to the standard procedure established by the Income Taxes on Natural Persons Act.Article 61l. (New, SG No. 110/2007) (1) The taxable persons who are subject to levy of a licence tax may enjoy tax relief in the following sequence:1. any natural persons, including any sole traders, who have lost 50 per cent and more than 50 per cent of the working capacity thereof, which loss has been determined by an effective decision of a competent authority, shall enjoy a rate rebate of 50 per cent of the licence tax as determined if they carry out the activity in person and do not hire workers for the said activity throughout the tax year;2. any natural persons, including any sole traders, who carry out more than one type of any licence activity of those specified in Items 1 to 36 of Annex 4 hereto through work done in person throughout the tax year, shall pay 50 per cent of the licence tax as determined for the relevant activity;3. any natural persons, including any sole traders, who are pensioners and carry out a licence activity specified in Items 5, 6, 8 to 15, 18 to 20, 25, 27 to 29 and 31 of Annex 4 hereto, shall pay 50 per cent of the licence tax as determined if they carry out the activity in person and do not hire workers for the said activity throughout the tax year;4. any persons who use the workplace for training of apprentices within the meaning given by the Skilled Crafts Act and who carry out a licence activity of the ones specified in Items 10, 12 and 13 of Annex 4 hereto, shall pay 50 per cent of the licence tax as determined for the relevant workplace; this rebate shall be enjoyable subject to the condition that a copy of the certificate on entry in the register of apprentices, issued by the competent regional chamber of skilled crafts, is attached to the return referred to in Article 61m herein.(2) Notwithstanding Article 61k (4) herein, the tax relief referred to in Item 1 of Paragraph (1) shall be enjoyed for the entire tax year during which the loss of working capacity occurs or the validity of the decision expires.Article 61m. (New, SG No. 110/2007) (1) Not later than the 31st day of January of the current year, the persons subject to levy of a licence tax shall submit a tax return completed in a standard form, declaring thereby, the circumstances pertaining to the assessment of the tax. In the cases of commencement of activity after the said date, the tax return shall be submitted immediately before commencement of activity.(2) Any person, who submits the tax return referred to in Paragraph (1) on or before the 31st day of January of the current year and pays the full amount of the licence tax, as determined according to the circumstances as declared, on or before the same date, shall enjoy a rate rebate of 5 per cent.(3) By a return referred to in Paragraph (1), the persons shall furthermore declare all changes in the circumstances pertaining to the assessment of the tax within seven days after occurrence of the relevant circumstance.(4) The persons shall furthermore submit a tax return under Paragraph (1) on the occurrence of any circumstances referred to in Article 61i (1) and (2) herein during the relevant period. The tax return shall be submitted not later than at the end of the month next succeeding the month during which the circumstances referred to in Article 61i (1) and (2) herein have occurred.Article 61n. (New, SG No. 110/2007) (1) The tax returns referred to in Article 61m herein shall be submitted in the municipality within the territory whereof the establishment whereat the licence activity is carried out is located, and where the licence activity is not carried out at an establishment or is not carried out from a fixed location, the said returns shall be submitted in the municipality where the natural person, including the sole trader, has his or her permanent address.(2) Where the tax return of a non-resident natural person is submitted through an attorney-in-fact who has a permanent address in the country, the said submission shall be effected in the municipality where the said attorney-in-fact has his or her permanent address.(3) Outside the cases referred to in Paragraphs (1) and (2), the tax return shall be submitted in Sofia Municipality.Article 61o. (New, SG No. 110/2007) (1) The licence tax shall be remitted in four equal payments, as follows:1. for the first quarter: on or before the 31st day of January;2. for the second quarter: on or before the 30 the day of April;3. for the third quarter: on or before the 31st day of July;4. for the fourth quarter: on or before the 31st day of October.(2) Where an obligation to remit the licence tax arises during the tax year, the portion of the tax due for the current quarter shall be remitted within seven days after the date of submission of the return referred to in Article 61m herein, and where a return has not been submitted, the said portion shall be remitted within seven days after expiry of the time limit for submission of the said return.(3) The licence tax shall be credited to revenue of the municipality exercising jurisdiction over the establishment whereat the licence activity is carried out, and where the licence activity is not carried out at an establishment or is not carried out from a fixed location, the licence tax shall be credited to revenue of the municipality where the natural person, including the sole trader, has his or her permanent address. In the cases referred to in Article 61n (2) and (3) herein, the tax shall be credited to revenue of the municipality where the said attorney-in-fact has his or her permanent address or of Sofia Municipality, as the case may be.Chapter ThreeLOCAL FEESSection IHousehold Waste FeeArticle 62. (Supplemented, SG No. 153/1998) Household waste fee shall be charged for the services of collection, removal and safe disposal of household waste at sanitary landfills or similar waste disposal facilities, as well as for sanitation of the spatial development areas for public use in the nucleated settlements. The amount of the fee shall be determined according to the procedure established by Article 66 herein for each service separately: waste collection and waste removal; safe disposal of household waste at sanitary landfills or other facilities; sanitation of spatial- development areas for public use.Article 63. (1) (Supplemented, SG No. 153/1998) A tipping fee for use of household waste disposal sites and/or for sanitation of spatial- development areas for public use shall be charged in respect of any corporeal immovables located outside the areas where the municipality has organized a collection and removal of household waste.(2) (Amended, SG No. 153/1998) The boundaries of the areas and the type of the services provided under Article 62 herein in the relevant area, as well as the frequency of waste removal, shall be determined by an order of the (competent) municipality mayor and shall be made public on or before the 30th day of October in the year last preceding the year for which the fee is due.Article 64. (1) (Amended, SG No. 119/2002, effective 1.01.2004) The fee shall be paid by the owner of the immovable or, where a real right of use has been created, by the user, according to the expenses as approved by the Municipal Council for the relevant year for each of the activities covered under Article 62 herein.(2) (Amended, SG No. 109/2001, repealed, SG No. 119/2002, effective 1.01.2004).(3) (New, SG No. 109/2001, repealed, SG No. 119/2002, effective 1.01.2004).Article 65. (Amended, SG No. 153/1998, SG No. 103/1999, repealed, SG No. 119/2002, effective 1.01.2004).Article 66. (1) (Supplemented, SG No. 119/2002, effective 1.01.2004) The fee shall be determined by resolution of the Municipal Council as an annual amount in each nucleated settlement, based on an approved cost estimate for each activity, inclusive of the necessary expenses for:1. provision of receptacles for storage of household waste: containers, dust bins etc.2. collection of household waste and transportation of the said waste to sanitary landfills or other facilities and installations for the safe disposal thereof;3. (Amended, SG No. 109/2001) research, design, construction, maintenance, operation, closure and monitoring of sanitary landfills for household waste or other facilities and installations for safe disposal of household waste;4. cleaning of street roadways, squares, driveways, parks and other spatial-development areas of settlements assigned for public use.(2) (Repealed, SG No. 119/2002, effective 1.01.2005) The fee shall be collected by the tax administration.(3) (New, SG No. 153/1998) Should the Municipal Council fail to determine an amount of the household waste fee for a relevant current year before the end of the last preceding year, the said fee shall be charged on the basis of the amount effective at the 31st day of December in the last preceding year.(4) (New, SG No. 106/2004, repealed, SG No. 100/2005).(5) (New, SG No. 109/2001, renumbered from Paragraph (4), SG No. 106/2004) Any approved cost estimate for determination of the expenses of municipalities referred to in Paragraph (1) shall be subject to examination by the National Audit Office.Article 67. (1) (Redesignated from Article 67, SG No. 153/1998, amended, SG No. 109/2001, SG No. 119/2002, effective 1.01.2004) The amount of the (household waste) fee shall be determined in lev terms according to the quantity of household waste.(2) (Redesignated from sentence two of Item 2, SG No. 153/1998, amended, SG No. 119/2002, effective 1.01.2004) Where the quantity of household waste, referred to in Paragraph (1), is unascertainable, the amount of the fee shall be determined in lev terms per user or as a proportion of a base as shall be determined by the Municipal Council.(3) (New, SG No. 109/2001, amended, SG No. 119/2002, effective 1.01.2004) The amount of the fee determined depending on the quantity of household waste receptacles shall include the costs referred to in Items 1, 2 and 3 of Article 66 (1) herein.(4) (New, SG No. 109/2001, amended, SG No. 119/2002, effective 1.01.2004) The fee for sanitation of the spatial-development areas for public use in the nucleated settlements shall be determined in lev terms or as a proportion of a base as shall be determined by the Municipal Council.Article 68. (Amended, SG No. 119/2002, effective 1.01.2004) During the course of the year, it shall be inadmissible to revise the manner of determination and the amount of the household waste fee as adopted by the Municipal Council.Article 69. (Amended, SG No. 119/2002, effective 1.01.2004)(1) (Household waste) fee shall be payable according to a procedure established by the Municipal Council.(2) The municipality shall notify the persons covered under Article 64 herein of the fees due therefrom for the relevant period and of the time limits for payment.Article 70. (Repealed, SG No. 119/2002, effective 1.01.2004).Article 71. (Amended, SG No. 153/1998) No fee shall be charged for:1. (amended, SG No. 103/1999, SG No. 119/2002, effective 1.01.2004) household waste collection and household waste removal, where the service is not provided by the municipality;2. sanitation of the spatial-development areas for public use: where the service is not provided by the municipality;3. safe disposal of household waste and maintenance of sanitary landfills for household waste and other facilities for safe disposal of household waste: where no such are available.Section IIFees for Use of Retail and Wholesale Markets, Sidewalks, Squares,Street Roadways, Fairs and Grounds Assigned to Other UsesArticle 72. Fees shall be charged for use of sidewalks, squares, street roadways, retail market places (whether open-air or roofed), wholesale markets, fairs, as well as ground assigned to other uses which constitute municipal property.Article 73. (1) The fee shall be payable by natural and legal persons and shall vary by the zone wherein the grounds covered under Article 72 herein are located.(2) The zones referred to in Paragraph (1) shall be designated by the Municipal Council.Article 74. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 75. (Amended and supplemented, SG No. 153/1998, amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 76. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 77. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 78. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 79. (1) The fees shall be paid upon the issuance of a licence for the period specified in the said licence.(2) Where the space is used for a period exceeding one month, the fees shall be paid on a monthly basis.(3) (Repealed, SG No. 119/2002).Article 80. The municipal authority, which has issued a licence for use of space, may revoke the said licence where the space is not used for the assigned purpose, where the space is not used by the licensed user, or where public needs so require.Section IIIFees for Creches, Kindergartens, Public Care Homes, Camps andOther Municipal Social Services(Heading amended, SG No. 119/2002)Article 81. (Amended, SG No. 153/1998, SG No. 119/2002) Monthly fees shall be charged from the parents or tutors of the attendees for attendance of creches and kindergartens.Article 82. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 83. (Amended, SG No. 109/2001, repealed, SG No. 119/2002).Article 84. (1) (Amended, SG No. 153/1998, SG No. 119/2002) For attendance of schoolchildren's camps, a fee shall be charged per day in an amount as determined by the (competent) Municipal Council according to Articles 7, 8 and 9 herein.(2) (Repealed, SG No. 119/2002).(3) (Repealed, SG No. 119/2002).Article 85. (1) (Amended, SG No. 153/1998, SG No. 119/2002) Any schoolchildren who use dormitories shall pay a monthly fee in an amount as determined by the (competent) Municipal Council according to Articles 7, 8 and 9 herein.(2) (Repealed, SG No. 119/2002).Article 86. (1) (Amended, SG No. 119/2002) Any user of municipal social services shall pay a monthly fee to an amount equivalent to the relevant actual upkeep per person.(2) (Amended, SG No. 119/2002) The actual upkeep per person shall include the monthly costs of food, bedding and clothing, detergents and sanitary materials, food transportation costs, as well as the portion of the common costs of electric current and heat power, water supply, sewerage and household waste disposal, but excluding the donations, legacies and devices of any resident and non-resident natural and legal persons.Article 87. (1) The fee due shall be deducted from the personal income of the resident or beneficiary.(2) (Repealed, SG No. 119/2002).(3) (Repealed, SG No. 119/2002).(4) (Repealed, SG No. 119/2002).(5) (Repealed, SG No. 119/2002).Article 88. (Repealed, SG No. 119/2002).Article 89. (Repealed, SG No. 119/2002).Article 90. Any persons accommodated at private boarding homes or serviced by private schemes providing meals and domestic help at home, shall pay sums as contracted.Article 91. (Amended, SG No. 153/1998, SG No. 109/2001, SG No. 119/2002) For accommodation at an alcohol detoxification establishment or premises, a fee shall be charged per day.Article 92. (Supplemented, SG No. 153/1998) The fees under this Section shall be charged and collected by the office holders at the relevant establishments and shall be credited to revenue of the municipal budget not later than the 10th day of the month next succeeding the month wherefor such fees are due, and the fees under Article 86 herein, not later than the 25th day of the month next succeeding the month wherefor such fees are due.Section IV(Amended and supplemented, SG No. 71/1998, amended, SG No. 153/1998,supplemented, SG No. 102/2000, amended, SG No. 109/2001, SG No. 56/2002)Visitor FeeArticle 93. (1) (Amended, SG No. 94/2005) A fee shall be paid for use of a collective tourist accommodation establishment, a supplementary tourist accommodation or a hikers' chalet within the meaning given by the Tourism Act. (2) (Amended, SG No. 119/2002) The proceeds from the visitor fee shall be credited to the on-budget account of the municipalities.(3) (New, SG No. 112/2003, amended, SG No. 94/2005) The proceeds from the visitor fee from the collective tourist accommodation establishments, the supplementary tourist accommodations and the hikers chalets shall be expended according to a municipal programme for development of tourism, which shall be adopted annually, solely on:1. construction and maintenance of the infrastructure servicing tourism within the territory of the municipality, including local roads connecting resorts with airports, railway stations and bus stations, as well as with cultural landmarks and historical heritage sites;2. establishment of tourist information centres and arrangement of information services;3. conservation, maintenance and development of green spaces;4. sanitation and hygiene measures;5. promotion at home and abroad of tourism establishments located within the territory of the municipality.Article 93a. (1) The amount of the fee shall be determined by resolution of the Municipal Council not later than the 30th day of June in the last preceding year.(2) Should the Municipal Council fail to determine the fee within the time limit established by Paragraph (1), the amount of the fee effective during the last preceding year shall continue in effect for the next succeeding year.(3) (New, SG No. 112/2003) In the cases covered under Article 93 (1) herein, the Municipal Council shall determine the amount of the fee after advance consultation with the Municipal Tourist Board in the process of adoption of the annual programme for development of tourism.Article 94. (Amended, SG No. 94/2005) The fee shall be paid by each person using a collective tourist accommodation establishment, a supplementary tourist accommodation or a hikers' chalet simultaneously with the payment for the service.Article 95. (Repealed, SG No. 119/2002).Article 96. (Repealed, SG No. 119/2002).Article 97. (Amended, SG No. 119/2002, SG No. 94/2005) The fee shall be collected by the natural or legal persons who or which supply the service of overnight accommodation at a collective tourist accommodation establishment, a supplementary tourist accommodation or a hikers' chalet, and shall be credited to the on-budget account of the municipalities not later than the 15th day of the month next succeeding the month wherein the fee was collected.Section VQuarrying FeesArticle 98. Fees shall be charged for extraction of pit run, including such recovered from the bottom of water bodies.Article 99. (1) The fees shall be charged from the natural or legal persons who or which extract the pit run.(2) Any persons, who have been awarded a concession including extraction from the relevant deposit, shall not owe any fees under this Section.Article 100. The fees shall be determined separately in respect of each type of material according to the gross output determined:1. according to the production records mandatorily kept by each quarry;2. according to the quantities specified in the temporary or one-time permit for extraction of pit run.Article 101. (Amended, SG No. 119/2002) The amount of the fees shall be determined according to Articles 8, 8 and 9 herein:1. (amended, SG No. 109/2001, SG No. 119/2002) in respect of bank sand and pit sand, gravel and ballast;2. (amended, SG No. 109/2001, SG No. 119/2002) in respect of quartz sand used in glass-making and cutting sand;3. (amended, SG No. 109/2001, SG No. 119/2002) in respect of sandy loam material used for manufacture of bricks, roof tiles and ridge tiles, interior and exterior plastering;4. in respect of clay:(a) (amended, SG No. 109/2001, repealed, SG No. 119/2002);(b) (amended, SG No. 109/2001, repealed, SG No. 119/2002);5. (amended, SG No. 109/2001, SG No. 119/2002) in respect of foundry sand;6. (amended, SG No. 109/2001, SG No. 119/2002) in respect of rubble, crushed stone and mosaic of sedimentary, eruptive, erinaceous and other rocks;7. (amended, SG No. 109/2001, SG No. 119/2002) in respect of common stones of calcareous sandstone, limestone, travertine, dolomite, marble, aragonite, coquinoid limestone, conglomerate etc. used for interior and exterior facing;8. (amended, SG No. 109/2001, SG No. 119/2002) in respect of limestone, marl and calcite used for production of lime;9. (amended, SG No. 109/2001, SG No. 119/2002) in respect of limestone, marl, and sandy loam material used for production of cement;10. in respect of stone for manufacture of:(a) (amended, SG No. 109/2001, SG No. 119/2002) paving blocks;(b) (amended, SG No. 109/2001, SG No. 119/2002) rolls, millstones, grindstones and whetstones;(c) (amended, SG No. 109/2001, SG No. 119/2002) baseboards, eaves, steps and other such of sandstone, trochoid, marl and other of sedimentary rocks;(d) (amended, SG No. 109/2001, SG No. 119/2002) baseboards, eaves, steps and other such of granite, syenite, basalt, diorite, rhyolite, andensite and other of hard eruptive rocks;(e) (amended, SG No. 109/2001, SG No. 119/2002) sidewalk flagstones and roof slabs.Article 102. The fees shall be paid:1. every month: in the cases referred to in Item 1 of Article 100 herein;2. before extraction of the pit run in the cases referred to in Item 2 of Article 100 herein.Article 103. (Supplemented, SG No. 102/2000) The fees shall be credited to revenue of the budget of the municipality exercising jurisdiction over the place of extraction of the pit run not later than the 15th day of the month next succeeding the moth of extraction.Section VITechnical Service FeesArticle 104. Fees shall be charged for technical services provided by the municipalities and covering activities in connection with regional and urban planning, architecture, construction, urban development, cadastre in settlement and extra settlement spatial-development areas.Article 105. Technical service fees shall be charged from the natural and legal persons who and which benefit from the services, upon submission of the request.Article 106. The central-government and municipal bodies, the public-financed organizations and the Bulgarian Red Cross shall be exempt from technical service fees.Article 107. (Amended, SG No. 119/2002) The amount of technical service fees is hereby set as follows;1. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a design plat for a corporeal immovable;2. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a design plat for a corporeal immovable specifying the building development manner;3. (amended, SG No. 109/2001, SG No. 119/2002) for re certification of design plats after the lapse of six months since the issuance thereof;4. for marking of a building line and elevation:(a) (amended, SG No. 109/2001, repealed, SG No. 119/2002);(b) (amended, SG No. 109/2001, repealed, SG No. 119/2002);5. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of facts and circumstances regarding regional and urban planning;6. (amended, SG No. 109/2001, SG No. 119/2002) for certification of transcripts of documents and of copies of plans and the documentation appertaining thereto;7. (new, SG No. 119/2002) for issuance of a permit for placement of movable amenities for retail trade: stalls, kiosks, booths and other such;8. (new, SG No. 119/2002) for issuance of a building permit, an overhaul permit and a remodelling permit for existing buildings and premises therein.Article 108. No technical service fees shall be charged for:1. supplementation (correction) of an approved cadastral plan;2. a letter to the court, petitioning the issuing of a writ of execution on claims under an effective appraisal;3. certification of a construction work as unusable, a risk of spontaneous collapse, or harmful in terms of sanitation and hygiene, when the specialized commission ascertains the existence of such conditions;4. condemnation of corporeal immovables for construction purposes and indemnification of the title holders;5. modification and revocation of an effective order of condemnation and indemnification and reappraisal of a condemned immovable;6. determination of indemnities for corporeal immovables adjoinable to a parcel of land regulated under a yard regulation plan and for physical infrastructure work;7. provision of oral information on the cadastral, regulation and urban-planning status of corporeal immovables;8. provision of advance information on matters concerning technical services.Article 109. (1) The time limit for provision of technical services, which is not established by a statutory instrument, shall be set by resolution of the competent Municipal Council but may not be longer than one month.(2) Upon delay beyond the time limit referred to in Paragraph (1), the amount of the fee due for the respective service shall be reduced by 1 per cent daily, reckoned from the first day of delay, but by not more than 30 per cent in aggregate of the full amount of the said fee.Section VIIAdministrative Service FeesArticle 110. (1) The following fees shall be charged for provision of registrar services:1. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of heirship;2. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of identity of names;3. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of non-entry of a birth record or a death record;4. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a replacement of a birth certificate, a civil marriage certificate, as well as for re-issuance of an abstract of a death record;5. (amended, SG No. 109/2001, repealed, SG No. 119/2002);6. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of marital status;7. (amended, SG No. 109/2001, SG No. 119/2002) for issuance of a certificate of kinship;8. (amended, SG No. 109/2001, SG No. 119/2002) for address registration and/or issuance of certificates of permanent or current address;9. (amended, SG No. 109/2001, SG No. 119/2002) for authentication of an affidavit of invitation to a visit the Republic of Bulgaria of a foreigner;10. (amended, SG No. 109/2001, SG No. 119/2002) for authentication of an affidavit of invitation to a private visit to the Republic of Bulgaria to a non-resident person whereof one or both parents are of Bulgarian descent;11. (amended, SG No. 109/2001, SG No. 119/2002) for legalization of civil registration certificates intended for submission abroad;12. (amended, SG No. 109/2001, SG No. 119/2002) for any other types of certificates issued as requested;13. (amended, SG No. 109/2001, SG No. 119/2002) for transcripts of documents.(2) No fee shall be chargeable for any of the following services:1. entry of a birth record and issuance of an original birth certificate;2. entry of a civil marriage record and issuance of an original civil marriage certificate;3. entry of a death record and issuance of an abstract thereof;4. any entries, supplementary entries and corrections in the civil registration records;5. creation of tutorship and appointment of a curator;6. keeping of the population register;7. recording a change of name in the civil status register;8. issuance of a survivor benefit certificate.Article 111. (Amended, SG No. 109/2001, SG No. 119/2002) A fee shall be charged in respect of proceedings for accommodation of tenants, sale, exchange or creation of real rights in municipal corporeal immovables.Article 112. (Amended, SG No. 119/2002) A fee shall be charged for issuance of a certificate of ownership as required for sale of cattle.Article 113. (Amended, SG No. 109/2001, amended and supplemented, SG No. 119/2002, amended, SG No. 106/2004) (1) Fees shall be charged for issuance of permits and for practice of activities in amounts determined by the (competent) Municipal Council, in compliance with the following principles:1. the amount of the fees shall be determined on the basis of the expenses incurred by the municipality for the handling of the documents and for verification of compliance with the requirements set for practice of the activity;2. upon discontinuance of the operation of a distributive trade establishment, the municipality shall refund part of the annual fee in proportion to the period during which the activity is not performed;3. in the case of seasonal work, the annual fee shall be paid in an amount proportionate to the period of performance of the said work.(2) The following fees shall be collected under Paragraph (1):1. an initial fee: for issuance of a permit for trade under Article 30 (1) of the Tobacco and Tobacco Products Act; 2. an annual fee: for verification of compliance with the requirements for practice of the following activities:(a) trade in tobacco products under Article 30 (1) of the Tobacco and Tobacco Products Act; (b) storage, keeping, seasoning and wholesale trade in grape products, alcohol, distillates and spirit drinks;(c) retail trade in grape products, alcohol, distillates and spirit drinks;(d) trade in spirit drinks at mass-catering and amusement establishments;3. a daily fee: for a temporary stall for sale of grape products, alcohol, distillates and spirit drinks at fairs, local community festivals, corporate promotional campaigns and other such.(3) In respect of the year of issuance of the permit or of commencement of practice of the activity, the annual fee shall be paid in the amount of one-twelfth of the annual fee for each clear month remaining until the end of the year, including the month of issuance.(4) A person may not commence the relevant business prior to the issuance of a permit. A permit shall be issued upon presentation of a document certifying that there are no outstanding tax liabilities as well as other financial obligations to the municipality, whether declared or ascertained by a written statement of a competent authority at the date of issuance of the certificate.Article 114. (Supplemented, SG No. 109/2001, amended, SG No. 106/2004) The initial fee referred to in Item 1 of Article 113 (3) herein shall be paid by the persons upon submission of the request for issuance of a permit, and the annual fee referred to in Item 2 of (Article 113) (3) shall be paid on or before the 31st day of January.Article 115. (Repealed, SG No. 119/2002, new, SG No. 105/2006) A fee shall be paid for the issuance of certificates, where this is provided for in a law, and for certification of documents.Section VIIIDog Ownership(Amended, SG No. 109/2001, repealed, SG No. 119/2002,new, SG No. 87/2005) Article 116. (Repealed, SG No. 119/2002, new, SG No. 87/2005) (1) For ownership of a dog, the owner shall pay an annual fee in the municipality within the territory whereof the said owner has his, her or its permanent address or registered office, as the case may be.(2) The owners of dogs covered under Article 175 (2) of the Veterinary Practices Act shall be exempt from fee.Article 117. (Repealed, SG No. 119/2002, new, SG No. 87/2005) Within three months after acquisition of a dog, the owner thereof shall submit a declaration to the municipality exercising jurisdiction over the permanent address or the registered office of the said owner, as the case may be.Article 118. (Repealed, SG No. 119/2002, new, SG No. 87/2005) (1) The fee shall be paid annually, not later than the 31st day of March in the year wherefor the fee is due, or within one month after the date of acquisition of the dog, should the dog have been acquired after the 31st day of March. In respect of any dogs acquired during any current year, the fee shall be due in an amount equivalent to one-twelfth of the annual amount of the said fee for each month remaining until the end of the year, including the month of acquisition.(2) The proceeds from the fees collected under Paragraph (1) shall be used for measures related to a reduction of the number of stray dogs.Article 119. (Repealed, SG No. 119/2002). For more information visit www.solicitorbulgaria.com id: 338 Mon, 04 Aug 2008 06:57:18 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-1 http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-1 http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/LOCAL_TAXES_AND_FEES_ACT.JPG EUR http://web.solicitorbulgaria.com/index.php/bulgarian-local-taxes-and-fees-act-part-1 legal 80 negotiable Bulgarian Regulations for Application of the Value Added Tax Act info@solicitorbulgaria.com (SolicitorBulgaria) Subject MatterArticle 1. These Regulations shall govern the application of the Value Added Tax Act.Chapter OneGENERAL PROVISIONSTaxable PersonArticle 2. A taxable person upon importation of goods shall be any natural or legal person.Provision of Goods or Rendering of ServicesArticle 3. (1) Provision of goods or rendering of services between branches or between structural units established within the territory of the country within the structure of one person established within the territory of the country shall constitute internal turnover and shall not be supply.(2) Paragraph 1 shall furthermore apply to supply of goods or services between branches or between structural units established within the territory of the country within the structure of one person established outside the territory of the country.(3) For supplies of goods or services between a person established within the territory of a Member State and its branches or structural units established within the territory of the… For more information visit http://www.solicitorbulgaria.com id: 339 Subject MatterArticle 1. These Regulations shall govern the application of the Value Added Tax Act.Chapter OneGENERAL PROVISIONSTaxable PersonArticle 2. A taxable person upon importation of goods shall be any natural or legal person.Provision of Goods or Rendering of ServicesArticle 3. (1) Provision of goods or rendering of services between branches or between structural units established within the territory of the country within the structure of one person established within the territory of the country shall constitute internal turnover and shall not be supply.(2) Paragraph 1 shall furthermore apply to supply of goods or services between branches or between structural units established within the territory of the country within the structure of one person established outside the territory of the country.(3) For supplies of goods or services between a person established within the territory of a Member State and its branches or structural units established within the territory of the country the general rules of the Act regulating the arrangement of supplies shall apply.(4) Paragraph 3 shall furthermore apply to supplies of goods or services between branches or structural units established within the territory of the country and branches or structural units within the structure of the same person, which are established within the territory of another Member State.(5) The supply of goods or services between branches or between structural units established within the territory of another Member State, within the structure of one person established within the territory of the country shall not be reported, documented and declared under the procedure of the Act. (6) (New, SG No. 16/2007) Paragraphs 3 and 4 shall not apply where the supply of services is carried out to cover expenses at cost. In these cases internal turnover exists, not supply.Chapter TwoPLACE OF SUPPLIES AND INTRA-COMMUNITY ACQUISITIONSection IPlace of SuppliesPlace of Supply of GoodsArticle 4. In the cases of supply of goods transported from third countries or territories to a place within the territory of the country, the place of transaction of supply shall be within the territory of the country if the supplier of the goods is an importer.Place of Supply of ServicesArticle 5. (1) (Redesignated from Article 5, SG No. 16/2007) For the purposes of determining the place of supply of a service within the meaning of the Act , the terms "permanent address" and "habitual residence" shall mean the place specified as such in a passport or identity card and should the latter be absent, in other identity documents.(2) (New, SG No. 16/2007) The place of supply of transport, forwarding, courier or postal services (other than the services under Article 49 of the Act) shall be determined in accordance with Item 2 of Article 21 (2) of the Act where the services are provided in regard to international transport between:1. third country/territory and third country/territory or2. third country/territory and another Member State or3. another Member State and third country/territory.Place of Supply of Services in Intra-Community Transport of GoodsArticle 6. (1) The place of supply of services in intra-Community transport of goods shall be the territory of the country wherein transportation of the goods begins.(2) (Amended, SG No. 101/2006) Where a recipient of the supply referred to in Paragraph 1 is a person registered for VAT purposes in a Member State other than the Member State wherein the transport begins, the place of supply shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was effected thereto.(3) (New, SG No. 101/2006) Where a forwarder acts in the conditions of a forwarding contract and provides a forwarding service in relation to the supply of services for transport of goods between Member States, the place of supply of the forwarding service shall be the territory of the Member State wherein the transport begins.(4) (New, SG No. 101/2006) Where the recipient of the supply under Paragraph 3 is a person registered for VAT purposes in a Member State other than the Member State wherein the transport begins, the place of supply of the forwarding service shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was provided.(5) (New, SG No. 101/2006, supplemented, No. 3/2007) A forwarding service under Paragraphs 3 and 4 shall be the service of organizing, carrying out and servicing of transport of goods between Member States, including the supply of transport service as main supply and provision of services ancillary to this supply such as transport handling of goods, processing of documents, storage and insurance. Where the main supply of transport service is related to transport of goods between two places within the territory of the country, the forwarder shall have documents certifying that the transport of the goods within the territory of the country is directly related to the transport of the goods between Member States.(6) (New, SG No. 101/2006) In the cases referred to in Paragraphs 3 - 5 the provision of Article 127 of the Act shall not apply.(7) (New, SG No. 101/2006) The place of supply of courier or postal services (other than the services under Article 49 ) in relation to transport between two Member States shall be the territory of the Member State wherein the transport begins.(8) (New, SG No. 101/2006) Where a recipient of the supply under Paragraph 7 is a person registered for VAT purposes in a Member State other than that wherein the transport begins, the place of supply shall be the territory of the Member State which has issued the VAT identification number of the recipient under which the courier or the postal service was provided.(9) (New, SG No. 101/2006) For the purposes of documentation, declaration and recording in the ledgers of account the supplies under the foregoing paragraphs shall be equalized to supplies of services for transport of goods under Article 22 of the Act .Place of Supply of Services Ancillary to the Supply of Services inIntra-Community Transport of GoodsArticle 7. (1) The place of supply of services involving transport handling of goods ancillary to the supplies referred to in Article 6 herein shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was effected thereto.(2) (Amended, SG No. 101/2006) Where the recipient of the supply referred to in Paragraph 1 is a person registered for VAT purposes in a Member State other than that wherein the actual handling of goods in transit was effected, the place of supply shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was effected thereto.(3) The place of supply of a service effected by an agent, broker and another intermediary acting in the name and for the account of another person in connection with the supply of the service under Article 6 herein, shall be the territory of the Member State where transportation of the goods begins.(4) (Amended, SG No. 101/2006) Notwithstanding Paragraph 3, where the recipient of the supply under Paragraph 2 is a person registered for VAT purposes in a Member State other than that wherein the transport begins, the place of supply shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was effected thereto.(5) The place of supply of services effected by an intermediary acting in the name and for the account of another person in connection with the provision of services for transport handling of goods under Paragraph 1 shall be the place where the transport handling of the goods is physically performed.(6) (Amended, SG No. 101/2006) Where the recipient of the supply referred to in Paragraph 5 is a person registered for VAT purposes in a Member State other than that wherein the actual handling of goods in transit was effected, the place of supply shall be the territory of the Member State which issued the recipient the VAT identification number under which the service was effected thereto.(7) (New, SG No. 101/2006) For the purposes of documentation, declaration and recording in the ledgers of account the supplies under the foregoing paragraphs shall be equalized to supplies of services under Article 23 of the Act .Place of Supply of Services Involving Valuation and Work on MovableThings with Recipient Established within the Territoryof Another Member StateArticle 8. (1) The place of supply of services involving valuation or work on movable things shall be the place where the service is effected physically.(2) Where the recipient of the supply referred to in Paragraph 1 is a person registered for VAT purposes in another Member State and the goods have left the territory of the Member State where the service was effected physically, the place of supply shall be the territory of the Member State which issued the VAT identification number to the recipient under which the service was effected thereto.(3) In the cases referred to in Paragraph 2 the supplier shall have documents certifying the circumstances under Paragraph 2.(4) The supplier shall have the following documents certifying the circumstances referred to in Item 2 of Article 24 (3) of the Act:1. invoice on the supply;2. documents proving dispatch or transportation of the goods from the territory of the country to a destination outside the territory of the country such as:(а) a transport document or a written confirmation by the recipient or a person authorized thereby certifying that the goods are received outside the territory of the country - in the cases where the transport is at the expense of the supplier or the recipient but is carried out by a third party, or(b) a transport document or a written confirmation by the recipient or a person authorized thereby certifying that the goods are received outside the territory of the country - where the transport is carried out by the supplier, or(c) a written confirmation by the recipient certifying that the goods have left the territory of the country - where the transport is carried out by the recipient.(5) If the supplier of the service does not obtain the documents under Paragraph 4 by the end of the calendar month following the calendar month in which the chargeable event for the supply occurred, it shall be considered that the place of supply is the territory of the country and the tax on it shall become chargeable on the last day of the tax period following the tax period in which the chargeable event for the supply occurred.(6) The tax under Paragraph 5 shall be charged by the supplier by issuing a memorandum under Article 117 (2) of the Act.(7) The memorandum under Paragraph 6 shall be issued within 5 days effective as from the last day of the calendar month following the calendar month in which the chargeable event for the supply occurred.(8) Where the supplier obtains the documents under Paragraph 4 subsequently, it shall adjust the result of the application of Paragraphs 5 and 6 by cancelling the memorandum under Paragraph 6. No new memorandum shall be issued for the cancellation.(9) The cancellation under Paragraph 8 shall be effected within 5 days effective as from the date on which the person obtained the required documents.(10) (New, SG No. 101/2006) For the purposes of documentation, declaration and recording in the ledgers of account the supplies under Paragraph 1 shall be equalized to supplies of services under Article 24 of the Act.Section IIPlace of Intra-Community AcquisitionCertification of Existing Circumstancesof Intra-Community AcquisitionArticle 9. (1) To prove the circumstances under Article 62 (3) of the Act that the intra-Community acquisition of the goods is charged in the Member State where the goods have arrived or the transport thereof has ended, the acquirer Article 62 (2) shall have a document certifying that the intra-Community acquisition of the goods is charged in that Member State. The document shall be issued by the competent administration of the Member State where the goods have arrived or the transport thereof has ended.(2) To prove the circumstances under Article 62 (5) of the Act the intermediary in a triangular operation shall have the following documents:1. an invoice issued by the transferor in the triangular operation, stating the VAT identification number of the intermediary under Article 94 (2) of the Act;2. (supplemented, SG No. 101/2006) an invoice under Item 1 of Article 79 (2) issued by the intermediary in the triangular operation, specifying the VAT number of the acquirer in the triangular operation, issued by the Member State wherein the goods arrive;3. a VIES return for the relevant tax period in which the supply is declared in respect of which the invoice under Item 2 has been issued;4. a written confirmation by the acquirer in the triangular operation, certifying the receipt of the goods.(3) If the intermediary in the triangular operation fails to obtain the documents under Paragraph 2 until the end of the tax period following the tax period in which the tax on the intra-Community acquisition under Article 62 (2) would become chargeable, it shall be considered that the place of intra-Community acquisition is the territory of the country whereof the tax becomes chargeable from the intermediary.(4) In the cases referred to in Paragraph 3 the tax shall become chargeable on the last day of the tax period following the tax period during which the tax on the intra-Community acquisition under Article 62 (2) of the Act would become chargeable and shall be charged by the intermediary by issuing a memorandum under Article 117 (2) of the Act.(5) The memorandum under Paragraph 4 shall be issued within 5 days effective as from the date on which the tax under Paragraph 4 became chargeable.AdjustmentsArticle 10. (1) Where the tax on the intra-Community acquisition under Article 62 (2) of the Act is charged by a memorandum under Article 117 (2) of the Act and subsequently the person effecting the intra-Community acquisition obtains the document under Article 9 (1), the person shall adjust the result of the application of Article 62 (2) of the Act by cancelling the memorandum under Article 117 (2) whereby the tax is charged. No new memorandum shall be issued for the cancellation.(2) In the cases of Paragraph 1 the memorandum shall be cancelled not later than the last day of the tax period during which the person obtained the document under Article 9 (1).(3) Where the intermediary in a triangular operation obtains the documents under Article 9 (2) after the time limit under Article 9 (3), the said intermediary shall adjust the result of the application of Article 9 (4) and (5).(4) In the cases of Paragraph 3 the adjustment shall be carried out by the intermediary by cancellation of the memorandum under Article 9 (5). No new memorandum shall be issued for the cancellation.(5) The cancellation under Paragraph 4 shall be effected within 5 days effective as from the date on which the intermediary obtained the documents under Article 9 (2).Chapter ThreeCHARGEABLE EVENT, TAXABLE AMOUNT AND TAX RATEChargeable EventArticle 11. (1) A chargeable event within the meaning given by the Act shall be any supply effected by taxable persons under the Act, including supplies whereof the place of transaction is outside the territory of the country.(2) A chargeable event shall furthermore be the intra-Community acquisition of goods.(3) A chargeable event shall furthermore be the importation of goods within the meaning given by Article 16 of the Act.Date of Occurrence of Chargeable Event upon Supply of ServicesArticle 12. (1) Except for the cases referred to in Article 25 (3) and (4) of the Act the service shall be considered supplied within the meaning of the Act on the date on which the conditions for recognition of the income therefrom occur in accordance with the Accountancy Act and the applicable accounting standards.(2) Except for the cases of Article 25 (3) and (4) of the Act where under a contract for supply of a service the latter is related to execution of separate stages which shall be accepted by the recipient of the supply, for every stage of completeness of the service a chargeable event shall occur and the tax on it shall become chargeable on the date of acceptance of the said stage and such date shall be ascertained by a delivery-acceptance protocol signed by the supplier and the recipient.(3) (New, SG No. 101/2006) In the event of supplies under Article 25 (4) of the Act - with periodic, staged or ongoing execution - every period or stage for which a payment is agreed shall be considered a separate supply the chargeable event whereof occurs on the date on which the payment became due.(4) (New, SG No. 101/2006) Where a payment on a supply is made before a chargeable event under Paragraph 3 occurred, the tax shall become chargeable upon receipt of the payment.(5) (New, SG No. 101/2006) Paragraphs 3 and 4 shall also apply in the cases of a lease contract wherein no obligation has been agreed but only a possibility (option) for transfer of the ownership right. It is considered that an option in a lease contract exists where an explicit expression of will by the lessee and an additional payment other than instalments due on the contract are required for the transfer of ownership.Chargeable Event upon Modification of Lease ContractArticle 13. (1) In the cases of modification of a lease contract which initially provides for an option for transfer of ownership over the goods and as a result of the modification of the contract transfer of ownership over the goods is provided for expressly, it shall be considered that the person effects supply under Item 3 of Article 6 (2) of the Act on the date of modification of the contract.(2) The taxable amount of the supply under Paragraph 1 shall be equal to the sum total of the instalments due after the date of the modification of the contract, net of tax due thereon.(3) The supply under Paragraph 1 shall be documented in accordance with the standard procedure established by the Act.(4) (New, SG No. 101/2006) The service of granting a loan on supply of goods under the conditions of a lease contract shall be considered a separate supply the chargeable event whereof occurs under the terms of Article 25 (4) of the Act.(5) (New, SG No. 101/2006) The supply under Paragraph 4 shall be documented in accordance with the standard procedure established in the Act.(6) (New, SG No. 101/2006) Upon replacement of a lessee with a new lessee under an existing lease contract which provides explicitly for a transfer of the right of ownership over the goods it shall be considered that at the date of replacement with the new lessee a termination of the lease contract with the replaced (initial) lessee exists, which shall be documented under the terms of Article 115 (6) of the Act.(7) (New, SG No. 101/2006) In the cases of Paragraph 6 it shall be considered that at the date of replacement with the new lessee the lessor effects a supply under Item 3 of Article 6 (2) of the Act to the new lessee. The taxable amount of said supply shall be equal to the sum of the instalments due after the date of the replacement with the new lessee, without the tax due thereon.(8) (New, SG No. 101/2006) The supply under Paragraph 7 shall be documented in accordance with the standard procedure established in the Act.Taxable Amount of Supply of Excisable GoodsArticle 14. The taxable amount under Article 26 and Article 52 of the Act shall not include the amount of the excise duty where the goods are placed under excise duty suspension arrangement in accordance with the terms and procedure of the Excise Duties and Tax Warehouses Act.Taxes and Fees under the Local Taxes and Fees Act Article 15. Taxes and charges under the Local Taxes and Fees Act shall be included in the taxable amount of the supplies for which they are due.Utilisation of Investment Grants (Subsidies)Article 16. (1) Investment grants (subsidies) shall be considered utilized where the conditions required for their recognition as income occur pursuant to the Accountancy Act and the applicable accounting standards.(2) Where the investment grant (subsidy) received is for both additional payment on effected supplies in respect of which a right to deduct credit for input tax applies as well as on exempt supplies or on supplies or activities in respect of which no right of credit for tax input applies and it is impossible to determine for which supplies or activities it refers to, it shall be considered that the investment grant (subsidy) is allocated proportionately in accordance with the supplies effected by the supplier under Article 73 (3) of the Act and Items 2 - 6 of Article 73 (4) of the Act in the last 12 months before the month in which the investment grant (subsidy) was utilized.Usual or Customary Packing MaterialsArticle 17. (1) Usual or customary packing materials or containers within the meaning of the Act shall be only those intended for multiple use without recycling, such as bottles, cases, cans, drums, pallets, casks, barrels, cisterns, containers and others, after their adjustments to the hygienic and sanitary requirements.(2) The taxable amount under Article 26 (2) of the Act shall not be credited with the value of the usual or customary packing materials or containers under Item 4 of Article 26 (3) of the Act in so far as this value is included in the incidental expenses for packing under Item 3 of Article 26 (3) of the Act.Trade Discounts or Rebates Granted to RecipientsArticle 18. (1) Item 1 of Article 26 (5) of the Act shall apply regardless of whether the trade discount or rebate is granted in the form of money, goods or services.(2) Supply of goods or services not linked to the subject of the supply in respect of which they are supplied shall not be considered trade discount or rebate granted.(3) Goods or services are considered linked to the subject of the supply within the meaning of Paragraph 2 if they are of the same kind or if they are intended for advertising, testing, accompany or facilitate the use of the goods or services supplied.(4) Where the trade discount or rebate is granted after the date of occurrence of the chargeable event for the supply, to adjust the taxable amount of the supply the supplier shall issue a credit advice to the invoice issued for the supply and where more than one invoice is issued, by a credit advice stating the numbers of all invoices issued for the supply.(5) In the cases of Item 2 of Article 26 (5) of the Act where usual or customary packing materials or containers are not returned within 12 months from dispatch thereof, the taxable amount of the supply shall be credited by issuing a debit advice to the invoice issued for the supply. The advice shall be issued within 5 days effective as from the day of expiration of the 12-month time limit.Taxable Amount for Intra-Community Acquisition of Excisable GoodsArticle 19. (1) Included in the taxable amount for intra-Community acquisition of excisable goods shall be the excise duty due or paid for the goods in the Member State from which the excisable goods were dispatched or transported.(2) Where the excise duty due or paid for the goods in the Member State from which they were dispatched or transported has been refunded, the taxable amount under Paragraph 1 shall be debited with the amount of the excise duty refunded.(3) Refunding of the excise duty under Paragraph 2 shall be ascertained by the person with a document issued by the competent administration of the Member State which has refunded the excise duty.(4) The taxable amount under Paragraph 2 shall be debited by issuing a memorandum under Article 117 (4) of the Act.(5) The memorandum under Article 117 (4) of the Act shall be issued within 5 days effective as from the last day of the tax period in which the person obtained the document under Paragraph 3.(6) Excluded from the taxable amount under Article 64 of the Act shall be the amount of the excise duty where the goods are placed under excise duty suspension arrangement in accordance with the terms and procedure of the Excise Duties and Tax Warehouses Act.Special Cases of Determination of Taxable AmountArticle 20. The open market value under Article 27 (3) of the Act shall be determined at the date of occurrence of the chargeable event for the supply.Chapter FourCERTIFICATION OF EXISTING CIRCUMSTANCES OF SUPPLIESSupply of Goods Dispatched or Transported Outside theTerritory of the CommunityArticle 21. (1) Where the goods are dispatched or transported to a third country, to prove the supply under Items 1 and 2 of Article 28 of the Act the supplier shall have the following documents:1. a written customs declaration naming the supplier as the exporter of the goods, certified by the exit customs office;2. an invoice on the supply;3. a document of transportation of the goods.(2) Where the goods are dispatched or transported to a third territory, to prove the supply under Items 1 and 2 of Article 28 of the Act the supplier shall have the following documents:1. an invoice on the supply;2. a document of transportation of the goods;3. a written confirmation by the recipient certifying that the goods have arrived in the third territory.International Transport of PassengersArticle 22. To prove international transport of passengers under Article 29 of the Act the supplier of the service shall have the following documents:1. a license for operation of international transport of passengers;2. a document certifying international transport of passengers specifying the number of the means of transport by which the transport is effected.International Transport of GoodsArticle 23. (1) To prove international transport of goods under Items 1 and 2 of Article 30 of the Act the supplier of the service shall have the following documents:1. a license for operation of international transport of cargo, if the transport is effected by road;2. international transport documents naming the supplier as the carrier - a bill of lading, an air waybill or another internationally recognised transport document or a copy thereof;3. an invoice on the supply.(2) To prove international transport of goods under Item 3 of Article 30 of the Act the supplier of the service shall have the following documents:1. transport documents naming the supplier as the carrier;2. a copy of a transit customs declaration of transport between two customs offices, specifying the identification number of the means of transport by which the transport is effected;3. an invoice on the supply.International Transport of Natural Gas and ElectricityArticle 24. (1) For the purposes of proving international transport of natural gas within the meaning of Article 30 of the Act the supplier of the service shall have the following:1. a contract for transport, transfer or transit of natural gas;2. a written confirmation by the supplier of natural gas for the transited quantities, accompanied by a delivery acceptance act issued by a gas measuring station;3. invoice on the supply.(2) For the purposes of proving international transport of electricity within the meaning of Article 30 of the Act the supplier of the service shall have the following documents:1. written confirmation by the owner of the electricity of the quantities involved in the traffic or documents issued by the administrator under international cross-border trade agreements;2. invoice on the supply.Supply of Goods for Supply of Vessels,Aircrafts or Rolling Railway StockArticle 25. (1) (Former text of Article 25, SG, No. 3/2007) For the purposes of proving the supply under Item 1 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents simultaneously:1. an order for supply, supply receipt, supply list, delivery certificate or another document for supply of goods for consumption on board showing: the number and date of the international route, the destination and the initials (name and/or number) of the vehicle;2. a written customs declaration naming the supplier as the exporter - where the destination is a third country;3. invoice on the supply.(2) (New, SG No. 3/2007) Item 1 of Article 31 of the Act shall furthermore apply to an international route within the Community.Supply of Goods Intended for Consumption on Board of VesselsArticle 26. For the purposes of proving supply for vessels under Item 2 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents simultaneously:1. an order for supply, supply receipt, supply list, delivery certificate or another document for supply of goods for consumption on board showing: the number and date of the international route, the destination and the initials (name and/or number) of the vehicle;2. documents certifying the right of carrying out commercial, industrial or fishing activities outside the sea territories of the Republic of Bulgaria;3. invoice on the supply.Supply of Services for Construction of Vessels or AircraftsArticle 27. (1) For the purposes of proving the supply of services for construction of a vessel or aircraft under Item 3 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a contract for construction of a vessel or aircraft;2. invoice on the supply.(2) For the purposes of proving the supply of services for maintenance, repair, modification, transformation, assembly, equipping, furnishing, transport and destruction of a vessel or aircraft under Item 3 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a contract with the vessel owner or the company operating the aircraft for provision of the relevant service, specifying the name and/or number of the vehicle;2. invoice on the supply.Chartering of Vessels, Aircrafts and Railway Rolling StockArticle 28. (1) (New, SG No. 16/2007) For the purpose of proving the supply under Item 4 of Article 31 of the Act with place of transaction within the territory of the country for renting of vessels corresponding to those referred to in Article 34 (3) of the Merchant Shipping Code the supplier shall have the following documents:1. a rent contract;2. a copy of the certificate of registration or the act of nationality of the vessel;3. an invoice on the supply.(2) (Supplemented, SG No. 3/2007, previous Article 28 and amended, SG No. 16/2007) Notwithstanding the cases referred to in Paragraph 1 for proving supply under Item 4 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a contract stating that the vessel, aircraft or railway rolling stock will be used by the charterer thereof for effecting of international transport, including international transport within the Community;2. a license or another document certifying the right of the charterer to effect international transport with the chartered vehicle where the charterer is a resident person;3. a copy of a document showing:(a) the initials of the vehicle;(b) the crew or the team;(c) the number of the flight, cruise or another route, the departure time and the arrival time.4. an invoice on the supply.Handling of Vessels, Aircraft and Railway RollingStock On International RouteArticle 29. (1) For the purposes of proving the supply of services for handling of a vessel under Item 5 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. (amended, SG No. 3/2007) a document issued by the port enterprise of the vessel owner or its agent for said services certifying that the vessel is on international route, including an international route within the Community, and specifying the number and date of the route;2. an invoice on the supply.(2) For the purposes of proving the supply of services for handling of an aircraft under Item 5 of Article 34 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. (amended, SG No. 3/2007) a document of the land servicing issued by the airport authorities or by the licensed operator for land servicing to the aircraft operator receiving the services, showing that the aircraft is on an international flight, including an international flight within the Community, and specifying the number and date of the flight;2. an invoice on the supply.(3) For the purposes of proving the supply of services for handling of railway rolling stock under Item 5 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a copy of the bill of lading CIM or copy of the bill of lading SMGS, receipt standard form 312c;2. an invoice on the supply.(4) Rescue operations under Item 5 of Article 31 shall be operations involving services linked to combating of natural calamities, elimination of the consequences thereof, as well as prevention of calamities through preventive measures, where such operations are performed outside the territory of the country.(5) "Calamity" shall mean an earthquake, flood, fire, landslide, volcano eruption, air or water disasters, wild animal incursion, calamity due to insects, epidemics or others, as well as accidents and disasters of massive nature that have grown into calamity (chemical, radiation or other pollution, accidents or disasters of public transport vehicles and others).(6) "Services linked to rescue operations" shall be:1. combat against calamities, including the transportation of rescue teams; the search, transportation or evacuation of people; the supply of food, medicines, human organs or others; the spraying of chemical and other substances; other rescue operations (monitoring, measuring, testing, mapping, weather impact, photographing and others);2. leasing of vehicles for the purposes of providing the services under Item 1.(7) For the purposes of proving the supply of services under Paragraph 6 the supplier shall have the following documents:1. where provided by air transport:(а) a document issued by the foreign competent authority to certify the preventive measures, the calamity or the elimination of the consequences thereof, as well as its nature;(b) a services contract;(c) an aviation operator license;(d) a statement on the services provided in hours or another measurement depending on the type of service;(e) an invoice on the supply;2. where provided by water transport:(a) documents proving the services provided in accordance with the Commercial Maritime Code;(b) an invoice on the supply.3. where provided by rolling railway transport:(a) documents certifying the services provided;(b) an invoice on the supply.Transport Handling of Goods or PassengersArticle 30. (1) For the purposes of proving the supply of services for handling of goods under Item 6 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. the documents proving the handling of the vehicle;2. an invoice on the delivery.(2) The documents issued under Item 1 of Paragraph 1 may be issued in the name of the vessel owner (aviation operator or railway carrier), owner of the cargo, the carrier or the forwarder.(3) For the purposes of proving the supply of services for handling of passengers under Item 6 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. the documents proving the handling of the vehicle;2. an invoice on the supply.Supply of Vessels and AircraftsArticle 31. For the purposes of proving the supply under Item 7 of Article 31 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a written contract for transfer of ownership or other property rights over the vehicle pursuant to the Merchant Shipping Code , the Civil Aviation Act respectively;2. an invoice on the supply.Supply Linked to International Goods TrafficArticle 32. (1) For the purposes of proving the supply under Item 1 of Article 32 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. customs documents certifying that the goods are non-Community;2. customs documents showing that at the date on which the tax becomes chargeable the goods have the status of goods in temporary storage, or placed in a free zone or a free warehouse or under customs procedure of: customs warehousing, inward processing, temporary importation with full exemption from duty, external transit;3. an invoice on the supply.(2) For the purposes of proving the supply under Item 2 of Article 32 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a written declaration by the person who is the principal of the direction/procedure under Paragraph 1, stating that as of the date on which the tax on the supply of the service becomes chargeable for the goods, the circumstances under Paragraph 1 exist.2. an invoice on the supply.Supply for Handling of GoodsArticle 33. For the purposes of proving the supply of services for handling of goods under Article 33 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. (amended, SG No. 101/2006) a written customs declaration for placing the goods under customs procedure of "inward processing" or "processing under customs control" naming the supplier as the principal - where the goods are non-Community, respectively a document certifying completion of customs formalities where the goods are Community and are imported into the territory of the country from a third territory;2. a contract under which the supplier undertakes the obligation to carry out treatment, processing or repair of the goods referred to in Item 1;3. documents proving the treatment, processing or repair of the goods referred to in Item 1;4. (amended, SG No. 101/2006) a written customs declaration of export or re-export of the treated, processed or repaired goods whereby the supplier completes the customs procedure under Item 1, respectively a customs document certifying that the treated, processed or repaired goods are sent from the territory of the country to a third territory;5. an invoice on the supply.Supply of Gold for Central BanksArticle 34. For the purposes of proving the supply under Article 34 of the Act with place of transaction within the territory of the country the supplier shall have the following documents:1. a written contract for transfer of ownership over the gold;2. a copy of a document certifying that the status of the recipient is a central bank of another Member State - where the recipient is a central bank of another Member State;3. a written confirmation by the recipient under Item 2 certifying the receipt of the goods thereby;4. an invoice on the supply.Supply of Goods at Duty-free Distributive Trade EstablishmentsArticle 35. (1) The sales of goods in duty-free distributive trade establishments under article 35 of the Act shall be liable to tax at the zero rate only where the sale of the goods is considered export pursuant to the Excise Duties and Tax Warehouses Act. (2) The sales referred to in Paragraph 1 shall be reported and documented in accordance with the Regulations for Application on the Excise Duties and Tax Warehouses.Supply of Services Provided by Agents, Brokersand Other Intermediaries Linked to International TransportArticle 36. (1) Agency services with place of transaction within the territory of the country provided in connection with international transport under Article 23 shall be the service provided by the shipping agent to the ship owner and/or the captain of the ship in connection with all formalities and activities linked to the arrival, stay and departure of the vessel.(2) For the purposes of proving the supply under Paragraph 1 with place of transaction within the territory of the country the supplier shall have the following documents:1. a disbursement account;2. a contract between the ship owner and the shipping agent;3. an invoice on the supply.(3) Brokerage services in connection with the supply under Article 23 shall be maritime brokerage services within the meaning of Articles 226 - 230 of the Merchant Shipping Code.(4) For the purposes of proving the supply under Paragraph 3 with place of transaction within the territory of the country the supplier shall have the following documents:1. a maritime brokerage contract;2. an invoice on the supply.(5) For the purposes of proving forwarding services with place of transaction within the territory of the country, provided in connection with international transport under Article 23 the supplier shall have the following documents:1. a copy of a transport document for international transport, in connection with which the forwarding services are provided, or, in the absence of a uniform international transport document, any of the alternative documents as follows:(а) a copy of a customs declaration in writing, indicating the place in the country where the goods are cleared as local goods upon importation;(b) a copy of the customs documents certifying the completion of customs clearance - in the cases of Article 16 (3) of the Act;(c) a copy of the document under Item 1 of Article 21 (1);(d) a copy of the document under Item 3 of Article 21 (2);(e) a copy of the transit customs declaration on transport between two customs institutions;2. (supplemented, SG No. 3/2007) an invoice on the forwarding services related to the organisation, performance or servicing of international transport and included activities for re-loading on the way, storage, insurance and customs clearance.(6) (Amended, SG No. 101/2006) For the purposes of proving the supply of courier services with place of transaction within the territory of the country in connection with international transport under Article 23 the supplier shall have the following documents:1. a bill of lading;2. an invoice of the transport service or a document, whereby the shipper undertakes the obligation to pay in the event of non-payment on the part of the customer;3. an invoice on the supply.(7) (Amended, SG No. 101/2006) For the purposes of proving the supply of postal services with place of transaction within the territory of the country in connection with international transport under Article 23 the supplier shall have the following documents:1. delivery receipts used in the exchange of international postal items in pursuance of the Regulations on the Enforcement of the Universal Postal Convention and the Regulations on the Enforcement of the Postal Parcels Agreement;2. an invoice on the supply.(8) (New, SG No. 3/2007) The services under Paragraphs 5, 6 and 7 shall be equalised to services for international transport of goods under Article 30 of the Act.(9) (New, SG No. 3/2007) In the cases of Paragraph 5 the provision of Article 127 of the Act shall not apply.Supply of Services for Sale of Airplane Tickets for InternationalTransport of PassengersArticle 37. For the purposes of proving the supply of services for sale of airplane tickets with place of transaction within the territory of the country, provided in connection with international transport of passengers, the supplier shall have the following documents:1. a contract for the provision of intermediary services in connection with the sale of airplane tickets for international transport;2. a report on the sales of airplane tickets, drawn up and presented by the airline company in accordance with the contract with this airline company, which contains the following compulsory requisites: name of the airline company, number of the ticket, destination of the flight, the unit price per ticket, the amount of the discount (commission fee);3. a report on the sales of airplane tickets containing compulsory requisites including the name of the airline, the number of the ticket, the flight destination, the unit price per ticket and the amount of the fee for the sale of an airplane ticket;4. an invoice on the supply.Supply of Other Services Provided by Agents, Brokers and OtherIntermediariesArticle 38. (1) For the purposes of proving the supply of services under Article 36 (1) of the Act with place of transaction within the territory of the country, other than those referred to in Articles 36 and 37, the supplier shall have documents certifying that the services are provided in connection with supplies in respect of which the circumstances of Chapter Three of the Act exist.(2) For the purposes of proving the supply under Article 36 (2) of the Act with place of transaction within the territory of the country, the supplier shall have documents certifying that the services are provided in connection with supply of goods or services with place of transaction outside the Community.Adjustments of SuppliesArticle 39. (1) In case the supplier fails to obtain the documents under Articles 21 - 38 by the end of the calendar month following the calendar month in which the tax became chargeable, including advance payment on a supply, it shall be considered that the supply is subject to a 20% rate of tax.(2) In the cases under Paragraph 1 the tax shall be charged by the supplier by issuing a memorandum under Article 117 (2) of the Act.(3) The memorandum under Paragraph 2 shall be issued within 5 days effective as from the last day of the calendar month following the calendar month in which the tax for the supply became chargeable.(4) Where the supplier obtains the required documents subsequently, the supplier shall adjust the result of the application of Paragraphs 1 and 2 by cancelling the memorandum under Paragraph 2. No new memorandum shall be issued for the cancellation.(5) Cancellation under Paragraph 4 shall be effected within 5 days effective as from the date on which the person obtained the required documents.(6) (New, SG No. 101/2006) In the cases of Paragraph 4 where the taxable amount of the supply is lower than the advance payment received, a tax shall be charged on the difference at a rate of 20 per cent by issuing a new memorandum under Article 117 (2) of the Act .(7) (New, SG No. 101/2006) The memorandum under Paragraph 6 shall be issued within the time limits referred to in Paragraph 5.Accommodation Provided by a Hotelier, Where Part of a Package TourArticle 40. For the purposes of proving the supplies under Article 66 (2) of the Act, the supplier shall have the following documents:1. a document certifying that the accommodation is part of a package tour;2. a copy of the register of accommodated tourists;3. a certificate of category of the tourist place;4. an invoice on the supply, except for the cases where issuance thereof is not compulsory under Article 113 (3) of the Act.Chapter FiveEXEMPT SUPPLIESSupply of Prostheses Linked to Health CareArticle 41. Prostheses within the meaning of Item 3 of Article 39 of the Act shall be the prostheses within the meaning of the Regulations for the Application of the Integration of Persons with Disabilities Act adopted by Council of Ministers' Decree No. 343 of 2004 (promulgated in the State Gazette No. 115/2004; amended, No. 31/2005, No. 63/2005 - Decision of Supreme Administrative Court No. 7081/2005 on administrative case No. 4402/2005, No. 78/2005, No. 54/2006, No. 58/2006 - Decision of Supreme Administrative Court No. 7623/2006 on administrative case No. 2426/2006).Financial Services and Insurance Services(Title supplemented, SG No. 101/2006) Article 42. (1) (Previous Article 42, SG No. 101/2006) Derivatives of securities within the meaning of Article 46 (5) of the Act shall be: investment portfolios, bond coupons, etc.(2) (New, SG No. 101/2006) An exempt supply within the meaning of Article 47 of the Act shall also be the execution of services under the conditions and in accordance with the procedure of the Insurance Code by reinsurers.(3) (New, SG No. 16/2007) The taxable amount of the financial services (transactions) for purchase and sale (exchange) of foreign currency provided as primary activity shall be the positive difference (positive margin) between income and expenses on forex operations reported under the Accountancy Act and the applicable accounting standards, realised in the tax period. Income and expenses from subsequent measurements (revaluations) of foreign currency shall not be taken into account in the calculation of the taxable amount.(4) (New, SG No. 16/2007) Where fees and commissions are agreed for the services under Paragraph 3, they shall be added to the taxable amount formed under Paragraph 3, including the cases where the value of such fees and commissions is zero.(5) (New, SG No. 16/2007) The taxable amount formed under the terms of Paragraph 3, Paragraph 4 respectively, may be recorded in the sales log on one line.Supply of Postage Stamps and Postal ServicesArticle 43. (1) An indication equivalent to postage stamps within the meaning of Item 1 of Article 49 of the Act shall be an imprint of a postage stamp on an envelope issued and circulated in accordance with the legally prescribed procedure. The imprint made by a charging machine under the control of a post office shall not be deemed to be an indication equivalent to postage stamps.(2) A universal postal service within the meaning of Item 2 of Article 49 of the Act shall be a universal postal service within the meaning of Chapter Four, Section I of the Postal Services Act.Supply of Buildings and Parts ThereofArticle 44. (1) Taxable supplies shall furthermore be the supplies of parts of a building which meet the definition of Item 5 of 1 of the supplementary provision of the Act.(2) Upon supply of a building comprised of parts in respect of which the circumstances under Item 5 of 1 of the supplementary provision of the Act exist as well as parts in respect of which such circumstances do not exist, exempt shall be only the supply of the parts of buildings in respect of which the circumstances do not exist.(3) In the cases of Paragraph 2 the supplier shall document the supplies as follows:1. by issuing separate invoices for the taxable supply and for the exempt supply, or2. by issuing a common invoice in which the data under Items 11 - 14 of Article 114 (1) of the Act are recorded on separate lines for the taxable supply and the exempt supply respectively.(4) (New, SG No. 101/2006) In the cases of Paragraph 2 the related terrain to the parts of a building for which the circumstances of Item 5 of 1 of the supplementary provision of the Act exist shall be determined on the basis of the proportion between the parts of the building for which the circumstances exist and the total space of the building.Chapter SixCERTIFICATION OF EXISTING CIRCUMSTANCES OF INTRA-COMMUNITY SUPPLIESDocuments Certifying Intra-Community Supply of GoodsArticle 45. For the purposes of proving an intra-Community supply of goods, the supplier shall have the following documents:1. (amended, SG No. 101/2006) a document on the supply:(a) an invoice on the supply stating, where the recipient is registered for VAT purposes in another Member State, the VAT identification number of the recipient issued by a Member State under which the service was effected thereto;(b) a memorandum under Article 117 (2) of the Act - in the cases of intra-Community supply under Article 7 (4) of the Act;(c) a document under Article 168 (8) of the Act - where the supplier is a natural person other than a sole trader and is not registered under the Act;2. documents proving dispatch or transport of the goods from the territory of the country to the territory of another Member State:(а) a transport document or written confirmation by the recipient or a person authorized thereby, certifying the receipt of the goods on the territory of another Member State - where the transport is at the expense of the supplier or the recipient but is effected by a third party, or(b) a transport document or written confirmation by the recipient or a person authorized thereby, certifying the receipt of the goods on the territory of another Member State - where the transport is effected by the supplier, or(c) a written confirmation by the recipient, certifying the receipt of the goods on the territory of another Member State - where the transport is effected by the recipient.Adjustments for Intra-Community SuppliesArticle 46. (1) If the supplier of the service does not obtain the documents under Article 45 by the end of the calendar month following the calendar month in which the tax for the supply became chargeable, it shall be considered that the supply is subject to a 20% rate of tax.(2) In the cases under Paragraph 1 the tax shall be charged by the supplier by issuing a memorandum under Article 117 (2) of the Act.(3) The memorandum under Paragraph 2 shall be issued within 5 days effective as from the last day of the calendar month following the calendar month in which the tax for the supply became chargeable.(4) Where the supplier obtains the required documents subsequently, the supplier shall adjust the result of the application of Paragraphs 1 and 2 by cancelling the memorandum under Paragraph 2. No new memorandum shall be issued for the cancellation.(5) Cancellation under Paragraph 4 shall be effected within 5 days effective as from the date on which the person obtained the required documents.Chapter SevenTAXATION OF IMPORTSTaxable Amount upon Importation of GoodsArticle 47. (1) The value for customs purposes shall not be credited with the expenses incidental to the importation under Item 2 of Article 55 (1) of the Act in so far as said expenses are included in the value for customs purposes.(2) (Supplemented, SG No. 101/2006) The amount of the excise duty shall not be included in taxable amount under Article 55 of the Act where the goods are placed under excise duty suspension arrangement under the terms and according to the procedure of the Excise Duties and Tax Warehouses Act. (3) (New, SG No. 101/2006) On importation of goods under Article 16 of the Act under "temporary importation with partial exemption from duty" or "processing under customs control" procedure included in the taxable amount under Article 55 of the Act shall be the full amount of the customs duties determined by the customs authorities.Taxing upon Importation by Customs Authorities and Payment of Tax(Title supplemented, SG No. 101/2006) Article 48. (1) A tax upon importation of goods shall be charged regardless of whether the importer is a person registered or not registered under the Act.(2) In the cases of exemption upon importation no tax shall be due, but it shall be recorded in the customs declaration.(3) (New, SG No. 101/2006) No tax shall be charged upon placement of goods under free circulation arrangement after "temporary importation with partial exemption from duty" or "processing under customs control" procedure.(4) (New, SG No. 101/2006) Upon importation of goods under Article 16 of the Act under "temporary importation with partial exemption from duty" or "processing under customs control" procedure the tax charged by the customs authorities shall be remitted to the republican budget upon placement of the goods under the respective procedure.Charging of Tax by the Importer for Goods Imported for InvestmentProjects ImplementationArticle 49. (1) To exercise the right of taxing under Article 164 (2) of the Act the importer shall submit to the relevant customs office clearing the importation the following documents:1. a written customs declaration of importation wherein the importer states that it will use the special arrangements for VAT charging - in the cases of importation under Article 16 (1) and (2) of the Act;2. customs documents for completion of customs clearance wherein the importer states that it will use the special arrangements for VAT charging - in the cases of importation under Article 16 (3) of the Act;3. an order of the minister of finance issued pursuant to Article 166 (5) of the Act;4. a written declaration whereby the importer certifies that at the time of the importation the importer is a registered person under the Act and has no chargeable or unpaid tax liabilities or social insurance liabilities to the National Revenue Agency.(2) Before effecting the importation customs authorities may require information about the specific supply under the permission granted.(3) In the cases of Paragraph 1 the tax shall be recorded in the customs declaration and shall not be accounted for and customs authorities may admit release of the goods without the tax being effectively paid or secured.(4) The tax under Paragraph 3 shall be charged by the importer by a memorandum under Article 117 (2) of the Act, which shall be issued within 5 days effective as from the date of occurrence of the chargeable event under Article 54 of the Act.Charging of Tax by Importer in Other CasesArticle 50. (1) Where the importer under Item 6 of Article 58 (1) of the Act fails to obtain the documents under Article 45 by the end of the calendar month following the calendar month in which the chargeable event under Article 54 of the Act occurred, the tax on the importation shall become chargeable on the importer.(2) In the cases of Paragraph 1 the tax shall be charged by the importer by a memorandum under Article 117 (2) of the Act, which shall be issued within 5 days effective as from the last day of the calendar month following the calendar day in which the chargeable event under Article 54 of the Act occurred.(3) Where the supplier obtains the required documents subsequently, the supplier shall adjust the result of the application of Paragraphs 1 and 2.(4) In the cases of Paragraph 3 the adjustment shall be effected by the supplier by cancelling the memorandum under Paragraph 2. No new memorandum shall be issued for the cancellation.(5) The memorandum under Paragraph 4 shall be cancelled within 5 days effective as from the date on which the importer obtained the required documents.Exemption from Tax upon ImportationArticle 51. (1) In cases of exemption from tax upon importation of textbooks and teaching aids the importer under Item 1, "a" of Article 41 of the Act shall submit to the competent customs office a copy of a document whereby the textbooks and teaching aids are approved by the minister of education and science or the minister of culture.(2) In cases of tax exemption upon importation under Item 6 of Article 58 (1) of the Act the importer shall submit to the competent customs office the following documents:1. a copy of the certificate of registration under Article 104 of the Act;2. a declaration in writing whereby the importer certifies that at the time of effecting the importation the importer is a registered person under the Act;3. transport documents stating that the goods are intended for another Member State.(3) (Amended, SG No. 16/2007) In cases of tax exemption upon importation under Item 10 of Article 58 (1) of the Act the importer shall submit to the competent customs office a license granted in accordance with the Energy Act . according to which the person is authorized to make importation of electricity and natural gas.(4) In cases of tax exemption upon importation under Item 17 of Article 58 (1) of the Act the importer shall submit to the competent customs office a memorandum or another document proving that the goods are returned on claim concerning quality or non-observance of standards.Provision of Security in respect of Tax upon ImportationArticle 52. The provisions of Article 59 of the Act shall furthermore apply to cases where the director of the National Customs Agency has exercised the right to determine another amount of the security for the customs duties or to approve exemption from security in accordance with the Customs Act and the regulations for its application.Chapter EightASSESSMENT OF TAX LIABILITY AND CHARGING OF TAXCalculation of the Tax for Every SupplyArticle 53. (1) The amount of the tax due for each supply shall be calculated in accordance with the following formula: T - the amount of the tax due for the specific supply;TA - the taxable amount for the specific supply;RT - the rate of tax as applicable.(2) Where in accordance with the Act the tax is assumed as included in the declared or agreed price, the amount of the tax shall be calculated in accordance with the following formula: T - the amount of the tax due for the specific supply;P - the agreed price with the tax included or the declared retail price for the specific supply;RT - the rate of tax as applicable.(3) In case of free of charge taxable supplies of goods or services under Article 6 (3) and Item 4 of Article 9 (2) and Article 9 (3) of the Act the charged tax shall be at the expense of the supplier.(4) (New, SG No. 16/2007) Free of charge supply of the services under Item 2 of Article 9 (3) of the Act shall be deemed to be tax exempt supply where the supplied services are subject to exemption upon their receipt.Charging of TaxArticle 54. A registered person in respect whereof the tax has become chargeable shall charge it by:1. issuing a tax document stating the tax on a separate line;2. including the amount of the tax in the calculation of the result for the corresponding tax period in the VAT return under Article 116 for such tax period;3. recording the document under Paragraph 1 in the sales log under Article 113 for the corresponding tax period.Charging of Tax for Supplies of Goods and Servicesfor Advertising PurposesArticle 55. (1) Any registered person shall charge tax upon free of charge provision of goods and free of charge rendering of services for advertising purposes.(2) Paragraph 1 shall not apply and no tax shall be charged in the cases of free of charge supply of goods or free of charge supply of services of negligible value, for advertising purposes for the purpose of independent economic activity of the person, where supply under Item 2 of Article 6 (4) or Item 4 of Article 9 (4) of the Act does not exist.Chapter NineSPECIAL CASES OF RIGHT TO DEDUCT CREDIT FOR INPUT TAXImportation of Goods under Inward Processing ArrangementArticle 56. (Amended, SG No. 101/2006) (1) The right to deduct credit for input tax for the tax paid in the cases of importation shall be exercised and the customs declaration, the document certifying completion of customs formalities respectively, shall be recorded in the purchases log for the respective period.(2) A right to deduct credit for input tax exists also for the tax paid in the cases of importation of goods:1. under inward processing and refunding system. system arrangement;2. under processing under customs control procedure;3. under temporary importation with partial exemption from duty procedure;4. under Article 16 (3) of the Act.Goods and Services of Negligible Value for Advertising PurposesArticle 57. (1) The person shall have the right to deduct credit for input tax for received goods and services of negligible value for advertising purposes where such goods or services were, are or will be used for advertising of the supplies effected by the person, which are taxable within the meaning of Article 69 of the Act.(2) The person shall have the right to deduct a partial credit for input tax in respect of the tax on received goods or services of negligible value for advertising purposes where such goods or services were, are or will be used for advertising of supplies effected by the person in respect of which the right to deduct credit for input tax exists and for exempt supplies or supplies or activities in respect of which the person has no such right.Right to Deduct Credit for Input Tax upon Cancellation, Loss,Destruction or Theft of Tax Documentand upon Absent Document in the Cases of Intra-Community Acquisition(Title supplemented, SG No. 16/2007) Article 58. (1) In the event of cancellation of erroneously drafted or corrected documents under Article 116 of the Act the registered person may exercise its right to deduct credit for input tax on the basis of the newly issued tax document under Article 116 (1) of the Act, provided that the registered person holds a memorandum under Article 116 (4) of the Act.(2) In the event of a loss, destruction or theft of the original of a document, the registered person may exercise its right to deduct credit for input tax, notifying thereof the National Revenue Agency territorial directorate whereat the said person is registered and providing the issuer with a copy of the document certified thereby with signature and seal, to be kept in its accounting office.(3) (New, SG No. 16/2007) In the cases of Intra-Community acquisition of goods in regard to the actual receipt of goods under Article 6 (2) the right to deduct credit for input tax may also be exercised where the supplier of the goods has not issued a document in accordance with the provisions of Article 114 of the Act. (4) (New, SG No. 16/2007) In the cases of Paragraph 3 the person performing the acquisition shall have other documents ascertaining the taxable amount of the actually received goods under Article 6 (2).(5) (New, SG No. 16/2007) In the event of intra-Community acquisition of goods under Article 13 (3) the right to deduct credit for input tax shall be exercised only on the basis of the memorandum under Article 117 (2) and provided that the person has met the requirements of Article 86 of the Act. Right of Credit for Input Tax upon Public Auction under Tax andSocial-Insurance Procedure Code or under Code of Civil Procedureor Sale under Registered Pledges Act and Credit Institutions ActArticle 59. (Supplemented, SG No. 101/2006) Any registered person may exercise the right to deduct credit for input tax on the basis of the document under Article 83 (1) in compliance with the general requirements for the exercise of said right.Right to Credit for Input Tax in cases of Legal Successionunder Article 10 of the Act Article 60. (1) In the cases of legal succession under Article 10 of the Act the legal successor shall have the right to deduct credit for input tax for goods and services received where the following conditions are met simultaneously:1. the transforming corporation, the transferor or the contributor of a non-cash asset has not exercised its right to deduct credit for input tax;2. the time limit under Article 72 (1) of the Act has not expired, within which the transforming corporation, the transferor or the contributor of a non-cash asset should have exercised its right to deduct credit for input tax;3. the received goods or services will be used for the purposes of the taxable supplies within the meaning of Article 69 of the Act effected by the legal successor;4. the supplier of the goods or services is a registered person under the Act at the date of issue of the tax document and the supply is taxable at that time.(2) In the cases of legal succession under Article 10 of the Act, the legal successor shall furthermore have the right to deduct credit for input tax for the received goods or services for which the transforming corporation, the transferor or the contributor of a non-cash asset has not had the right to deduct credit for input tax where the following conditions are met simultaneously:1. the received goods or services will be used for the purposes of the taxable supplies within the meaning of Article 69 of the Act effected by the legal successor and the supplier of the goods and services is a registered person under the Act at the date of issue of the tax document and the supply is taxable at such date;2. the goods or services are acquired by the transforming corporation, the transferor or the contributor of a non-cash asset within 5 years, and for immovable things, within 20 years before the date of entry in the commercial register of the respective circumstance under Article 10 of the Act.(3) In the cases of Paragraphs 1 and 2, where the goods and services will be used for both taxable supplies under Article 69 of the Act and for exempt supplies or supplies and activities not entitled to credit for input tax, a right to deduct partial credit for input tax shall exist for the charged tax, calculated under the terms of Article 73 of the Act.(4) The right to deduction under paragraphs 1 and 2 shall be exercised where the following conditions obtain:1. the legal successor has a copy of the tax document, drawn up in accordance with the provisions of Articles 114 and 115 of the Act , wherein the tax is stated on a separate line - in respect of supplies of goods or services whereon the recipient is the transforming corporation, the transferor or the contributor of a non-cash asset;2. (amended, SG No. 3/2007) the legal successor has a copy of a memorandum under Article 117 (2) of the Act, issued by the transforming corporation, the transferor or the contributor of a non-cash asset - in the cases where the tax is chargeable from the transforming corporation, the transferor or the contributor of a non-cash asset as a payer under Article 82 (2) and (3) of the Act;3. the legal successor has a copy of a customs declaration, customs documents respectively, certifying completion of customs clearance wherein the transforming corporation, the transferor or the contributor of a non-cash asset is specified as an importer and the tax is paid under the terms of Article 90 (1) of the Act - in the cases where the transforming corporation, the transferor or the contributor of a non-cash asset is an importer;4. the legal successor has a copy of a customs declaration, customs documents respectively, certifying completion of customs clearance wherein the transforming corporation, the transferor or the contributor of a non-cash asset is specified as an importer, and a memorandum under Article 117 (2) of the Act issued by the transforming corporation, the transferor or the contributor of a non-cash asset - in the cases where the tax is chargeable from the importer under the terms of Article 57 (1) and Article 58 (2) of the Act ;5. the legal successor has a copy of a document which meets the requirements of Article 114 of the Act , wherein the transforming corporation, the transferor or the contributor of a non-cash asset is specified as a recipient, and a copy of the memorandum under Article 117 (2) of the Act issued by the transforming corporation, the transferor or the contributor of a non-cash asset - in the cases of intra-Community acquisition under Article 84 of the Act by the transforming corporation, the transferor or the contributor of a non-cash asset;6. has a copy of a document under Article 83 (1) - in the cases where the transforming corporation, the transferor or the contributor of a non-cash asset has acquired a movable thing under Article 131 (1) of the Act.(7) (new, SG No. 3/2007) the legal successor has a copy of a document which meets the requirements of Article 114, wherein the transforming corporation, the transferor or the contributor is indicated as the recipient, and a copy of a memorandum under Article 117 (2) issued by the transforming corporation, the transferor or the contributor in the cases where the tax is chargeable from the transforming corporation, the transferor or the contributor as payer under Article 82 (4) and (5) of the Act .(5) The legal successor under Article 10 of the Act shall make an inventory in standard form - appendix No. 7 - of received goods and services under Paragraphs 1 and 2.(6) The inventory under Paragraph 5 shall be submitted to the National Revenue Agency territorial directorate at registration of the legal successor within 30 days effective as from the date of entry in the commercial register of the respective circumstance under Article 10 of the Act.(7) The right to deduct credit for input tax under Paragraphs 1 and 2 shall be exercised in the tax period in which it occurred or in one of the following three tax periods and the document under Paragraph 4 included in the inventory under Paragraph 5 shall be recorded in the purchases log and included in the calculation of the net tax for the relevant tax period.(8) The right to deduct credit for input tax under Paragraphs 1 and 2 shall not occur and may not be exercised if the inventory under Paragraph 5 is submitted after the time limit under Paragraph 6.Right to Deduct Credit for Input Tax for Assets Availableand Services Received before Registration Date or beforeRe-registration DateArticle 61. (1) The right to deduct credit for input tax under Article 74 of the Act shall occur only in respect of any assets available at the date of registration or services received before the date of registration recorded in the registration inventory in a standard form - appendix No. 2 - which shall be submitted not later than seven days from the registration date.(2) The right to deduct credit for input tax under Article 76 of the Act shall occur only in respect of any assets available at the date of re-registration recorded in the registration inventory in a standard form - appendix No. 3 - which is submitted not later than seven days from the re-registration date.(3) In the cases of Paragraphs 1 and 2 where the asset was used, is used or will be used for both taxable and exempt supplies or for supplies or activities in respect of which no right to deduct credit for input tax exists, a right to partial credit for input tax shall exist for the charged tax, calculated under the terms of Article 73 of the Act.(4) The right to deduct credit for input tax under Paragraphs 1 and 2 shall be exercised in the tax period in which it occurred or in one of the following three tax periods and the respective document under Article 71 of the Act shall be recorded in the purchases log for the relevant tax period.(5) The right to deduct credit for input tax under Paragraphs 1 and 2 shall not occur and may not be exercised if the inventory under Paragraphs 1 and 2 is submitted after the time limit under Paragraphs 1 and 2.Chapter TenRESTRICTIONS OF THE RIGHT TO DEDUCT CREDIT FOR INPUT TAXGoods and Services for Business or Entertainment PurposesArticle 62. (1) Business or entertainment purposes within the meaning of Item 3 of Article 70 (1) of the Act shall be: welcome, stay and seeing off of guests and delegations; accommodation; consumption of food and drinks; arrangement of business meetings; celebrations, entertainment; excursions.(2) Paragraph 1 shall not apply in respect of organization of symposia, congresses, conferences and other similar events directly related to the presentation or testing of the goods and services offered by the person within its independent economic activity.Goods and Services of Negligible Value for Advertising PurposesArticle 63. The registered person shall not have the right to deduct credit for input tax for received goods and services of negligible value where the advertised supplies are exempt supplies or supplies or activities in respect of which no right to deduct credit for input tax exists.Chapter ElevenADJUSTMENTS OF CREDIT FOR INPUT TAX USEDCalculation of the Factor under Article 73 (2) of the Act Article 64. (1) For the purposes of calculating the factor under Article 73 (2) of the Act the following supplies shall not be included in the turnover under Article 73 (3):1. Article 6 (4), Article 9 (4), Article 10 (1) and (3), Article 129 of the Act;2. a supply resulting from a request or an act of a central or local government authority or in pursuance of the law where no compensation is provided.(2) For the purposes of calculating the factor under Article 73 (2) of the Act the following supplies shall not be included in the turnover under Article 73 (4) of the Act:1. supplies under Paragraph 1;2. interest received on current and deposit accounts; this does not refer to:(а) credit and financial institutions within the meaning of the Credit Institutions Act;(b) insurance companies within the meaning of the Insurance Code;(c) collective investment schemes, investment companies and management companies under the Public Offering of Securities Act, social insurance companies, pension funds and management companies under the Social Insurance Code, health insurance companies under the Health Insurance Act.(3) (Amended, SG No. 16/2007) The person itself shall calculate the factors under Article 73 of the Act, shall round them up under the terms of Article 85 (3) and shall have the data necessary for calculation thereof.Annual Adjustment under Article 73 (8) of the Act Article 65. (1) The difference under Article 73 (8) of the Act shall be calculated in accordance with the following formula:AA = Tdpcit x Fcy - CIPUcy, where:AA shall be the amount of the annual adjustment under Article 73 (8) of the Act ;Tdpcit - tax with right to deduct partial credit for input tax for current year;Fcy - the factor under Article 73 (2) of the Act for the current year;CIPUcy - total amount of credit for input tax used in the current year.(2) (Supplemented, SG No. 101/2006, amended, SG No. 3/2007) The amount of the annual adjustment under Paragraph 1 shall be stated in cell 43 of Appendix No. 13 for the last tax period with "+" or "- sign. A memorandum under Article 117 (2) of the Act shall be drawn up for the adjustment, wherein the requisites under Items 3 to 7 of Article 117 (2) shall not be completed and the amount of the annual adjustment under Article 73 (8) shall be stated with a "+" or "-" sign. The memorandum shall be issued on the last day of the last tax period at the latest and shall be recorded in the purchases log for the last tax period.Adjustments of Credit for Input Tax Used(Title amended, SG, No. 101/2006) Article 66. (1) The adjustments under Article 73 (1) and (3) of the Act shall be made by issuing a memorandum which shall contain:1. number, date;2. name and identification number of the person under Article 94 (2) of the Act;3. grounds for the adjustment;4. description of the goods or service;5. amount of credit for input tax used;6. number of years under Article 79 (6) of the Act;7. amount of tax due under Article 79 (6) of the Act.(2) The memorandum under Paragraph 1 shall be issued not later than the last day of the tax period in which the circumstances for the adjustment arose.(3) The adjustment under Article 79 (2) of the Act shall be made by issuing a memorandum which shall contain:1. number, date;2. name and identification number of the person under Article 94 (2) of the Act;3. grounds for the adjustment;4. description of the goods or service;5. amount of credit for input tax used;6. number of years under Article 79 (7) of the Act;7. a factor under Article 79 (7) of the Act;8. amount of tax due under Article 79 (7) of the Act.(4) The memorandum under Paragraph 3 shall be issued not later than the last day of the last tax period of the year in which the circumstances for the adjustment arose.(5) The memorandums under Paragraphs 1 and 3 shall be recorded in the sales log and the VAT return for the tax period in which they were issued.(6) (New, SG No. 101/2006) A registered person which has fully or partially deducted credit for input tax on goods produced, purchased, acquired or imported thereby and subsequently effects an intra-Community free of charge supply therewith, shall owe a tax in the amount of the credit for input tax used.(7) (New, SG No. 101/2006) The adjustment under Paragraph 6 shall be made by issuing a memorandum which shall contain:1. number and date;2. name and identification number of the person under Article 94 (2) of the Act;3. grounds for the adjustment;4. type and quantity of the goods;5. amount of due tax (credit for input tax used);(8) (New, SG No. 101/2006, amended, No. 3/2007) The memorandum under Paragraph 7 shall be issued not later than the last day of the tax period in which the tax on the free of charge intra-Community supply became chargeable and shall be recorded in the sales log for said tax period.Adjustments of Credit for Input Tax Used in Other CasesArticle 67. (1) In the cases of Article 79 (8) of the Act the registered person has the right to credit the amount of the partial credit for input tax used with an amount calculated under the following formula:1. for immovable things: whereICIT is the increase of the amount of partial credit for input tax used;Tdpcit - the tax with right to deduct partial credit for input tax;Fydpcit - the factor under Article 73 (2) of the Act, calculated on the basis of the turnovers for the year in which the right to deduction of partial credit of input tax was exercised;NoY - the number of years from occurrence of the circumstances under Article 79 (8) of the Act , excluding the year of occurrence of the circumstances, until expiration of the 20-year time limit, effective as from the year of exercise of the right to deduct partial credit for input tax inclusive;2. for all other goods or services: where:ICIT is the increase of the amount of partial credit for input tax used;Tdpcit - the tax with right to deduct partial credit for input tax;Fydpcit - the factor under Article 73 (2) of the Act, calculated on the basis of the turnovers for the year in which the right to deduction of partial credit of input tax was exercised;NoY - the number of years from occurrence of the circumstances under Article 79 (8) of the Act, excluding the year of occurrence of the circumstances, until expiration of the 5-year time limit, effective as from the year of exercise of the right to deduct partial credit for input tax inclusive.(2) The increase under Paragraph 1 shall be effected by issuing a memorandum, which shall contain:1. number, date;2. name and identification number of the person under Article 94 (2) of the Act;3. grounds for the adjustment;4. description of the goods or service;5. charged tax with right to deduct partial credit for input tax;6. number of years under Paragraph 1;7. factor under Paragraph 1;8. increase of the amount of the credit for input tax under Paragraph 1.(3) The memorandum under Paragraph 2 shall be issued not later than the last day of the tax period in which the circumstances under Article 79 (8) of the Act occurred.(4) The right to deduct credit for input tax under Paragraph 1 shall be exercised by recording the memorandum under Paragraph 2 in the purchases log and in the VAT return for the last tax period of the year in which the time limit under Paragraph 1 expires and provided that the goods or services are used only for effecting taxable supplies under Article 69 of the Act for the period commencing from the period of occurrence of the circumstances under Article 79 (8) of the Act till the last day of the last tax period.(5) Where the person deregisters before the lapse of the time limit under Paragraph 1, the right to deduct credit for input tax shall be exercised by recording the memorandum under Paragraph 2 in the purchases log and in the VAT return for the last tax period under Article 87 (4) of the Act and provided that the goods or services are used only for effecting taxable supplies under Article 69 of the Act for the period from occurrence of the circumstances under Article 79 (8) of the Act until the last day of the tax period.(6) Where before the lapse of the time limit under Paragraph 1 the person effects a taxable supply of goods or service under Article 69 of the Act , the right to deduct credit for input tax under Paragraph 1 shall be exercised by recording the memorandum under Paragraph 2 in the purchases log and in the VAT return for the tax period in which the tax on the supply is charged and provided that the goods or services are used only for effecting taxable supplies under Article 69 of the Act from the period of occurrence of the circumstances under Article 79 (8) of the Act until the date on which the chargeable event for the supply occurred.Chapter TwelveSET-OFF, DEDUCTION AND REFUND OF NET TAX FOR PERIOD:INPUT TAX CLAIMABLEProcedure for Set-Off, Deduction and Refund of Net Tax forPeriod: Input Tax ClaimableArticle 68. (1) Where a registered person declares an input tax claimable in a VAT return submitted thereby for a specific tax period and the said person has chargeable and unpaid tax liabilities and liabilities for social insurance contributions at the date of submission of the VAT return the revenue authority shall set off such liabilities against the stated input tax claimable.(2) Subject to deduction under Article 92 (1) of the Act shall be any input tax claimable or the balance thereof after set-off, if such set-off is effected before submission of the next VAT return with the exception of:1. the input tax claimable subject to set-off or refund under the terms of Article 92 (3) and (4) of the Act ;2. the input tax claimable subject to set-off or refund together with the balance of another input tax claimable under the terms of Item 5 of Article 92 (1) of the Act.(3) If after submission of the three VAT returns under Item 2 of Article 92 (1) of the Act there is undeducted balance of the input tax claimable, the person shall state in cell 80 of the last VAT return the undeducted balance of the input tax claimable which is subject to set-off or refund within 45 days. If in any of the three VAT returns submitted an input tax claimable is declared, in respect of which Article 92 (3) and (4) of the Act does not apply, such tax shall be added to the undeducted balance of the input tax claimable and shall be stated in cell 80 of the last VAT return.(4) Where an input tax claimable which is subject to set-off or refund after completed deduction procedure is stated in cell 80 of the VAT return, the person shall submit in respect of such tax a statement of effected deduction in a standard form - appendix No. 6 - together with the VAT return.(5) The revenue authority may furthermore require submission of a statement of effected deduction in respect of another input tax claimable.Balance for RemissionArticle 69. (1) Where during an ongoing deduction procedure under Item 2 of Article 92 (1) of the Act a person declares in the VAT return submitted thereby for a specific tax period an output tax payable and after the deduction a balance remains of the output tax payable, such balance shall be due within the time limit under Article 89 of the Act.(2) Where during an ongoing deduction procedure under Item 2 of Article 92 (1) of the Act a person declares in the VAT return submitted thereby for a specific tax period an output tax payable which may be deducted with more than one input tax claimable, the deduction shall be effected consecutively with each input tax claimable in the order of occurrence thereof.Input Tax Claimable within 30 DaysArticle 70. (1) Where a registered person declares in a VAT return submitted thereby for a specific tax period an input tax claimable and in respect of the said person the circumstances under Article 92 (3) and (4) of the Act exist and such person wishes to apply this provision, the said person shall state in cells 81 and 82 of the VAT return for the period the input tax claimable which is subject to refund or set-off within 30 days.(2) The circumstances under Article 92 (3) and (4) of the Act shall be ascertained by the person by declaring them in the VAT return for the respective tax period.(3) In the cases referred to in Paragraph 1 the provisions of Article 68 (2) and (3) shall not apply and the input tax claimable shall not participate in the deduction procedure.Completion of Procedure for Deduction of Input Tax Claimable uponDeregistrationArticle 71. Where at the deregistration date the person is undergoing a procedure for deduction under the terms of Article 92 (1) of the Act, it shall be considered that the three one-month periods have lapsed at such date and the person shall state in cell 80 of the VAT return for the last tax period the balance of the input tax claimable after the deduction thereof.Chapter ThirteenREGISTRATIONVAT Identification NumberArticle 72. (1) Persons not registered under the Tax and Social-Insurance Procedure Code may not be registered under the Value Added Tax Act.(2) In the cases of registration under Article 152 of the Act the National Revenue Agency shall issue to the person an official identification number under Article 84 (3) of the Tax and Social-Insurance Procedure Code on the basis of the application submitted by the person under Article 95 (1).(3) Registration under the Value Added Tax Act of non-residents through accredited representative shall be effected by the competent National Revenue Agency territorial directorate whereat the accredited representative is registered or is subject to registration.(4) Upon registration under the Value Added Tax Act a VAT identification number shall be issued, containing the sign BG followed by the identification number of the person.(5) Upon registration under Article 152 of the Act the VAT identification number shall contain the sign EU.Obligations of the Persons Regarding Grounds for RegistrationArticle 73. (1) All taxable persons after the end of the calendar month shall determine their taxable turnover under Article 96 (2) of the Act for the 12 months preceding the current one.(2) All taxable persons and non-taxable legal persons which effect intra-Community acquisition of goods shall:1. determine on a current basis the total amount of intra-Community acquisitions for the current year, with the exception of acquisition of new means of transport and excisable goods;2. determine for the previous calendar year the sum total of the taxable amounts of the taxable intra-Community acquisitions, with the exception of acquisition of new means of transport and excisable goods;(3) All registered persons effecting supplies of goods under the terms of distance selling shall:1. determine on a current basis the total amount of the supplies of goods under the terms of distance selling for every individual Member State separately;2. determine for every of the two calendar years preceding the current one the taxable amounts of the effected supplies under the terms of distance selling for every individual Member State separately.Documents Linked to RegistrationArticle 74. (1) The application for registration under Article 101 (1) of the Act shall be submitted in a standard form - appendix No. 1.(2) The following documents shall be enclosed to the application for registration:1. a statement of the taxable turnover by month for the last 12 months preceding the current one - for registration under Article 96 (1) of the Act ;2. a statement of the total amount of taxable intra-Community acquisitions for the current year with the exception of acquisition of new means of transport and excisable goods - for registration under Article 99 (1) of the Act.(3) In the cases of registration pursuant to Article 133 of the Act, enclosed to the application for registration shall also be:1. a certificate by the competent tax authorities of current tax registration abroad of a non-resident person and a translation thereof;2. the original of a notary certified contract in the country between the non-resident person and the accredited representative on the occasion of assignment of obligations under Article 135 (2) and (3) of the Act;3. a certificate of current court registration of the person - accredited representative - or a copy of the identity documents where the latter is a natural person;4. a document by the competent tax authorities certifying registration for VAT purposes in another Member State - for the registration under Article 98 and Article 100 (3) of the Act ;5. a document by the competent tax authorities certifying that the latter authorities are notified that the person wishes the place of transaction of the distance sales effected thereby to be within the territory of the country - for registration under Article 100 (3) of the Act.(4) In the cases of registration under Article 132 of the Act enclosed to the application for registration shall be a copy of the court judgement on recording of the circumstance under Article 10 (1) of the Act in the commercial register.Registration CertificateArticle 75. (1) The certificate under Article 104 (1) and (2) of the Act shall be drawn up in a standard form - appendix No. 4.(2) The certificate under Article 104 (3) of the Act shall be drawn up in a standard form - appendix No. 5.Obligations of Accredited RepresentativeArticle 76. (1) Any accredited representative shall notify without delay the territorial directorate National Revenue Agency whereat the non-resident person is registered if circumstances arise which lead to the accredited representative being incapable of fulfilling his obligations under Article 135 (2) and (3) of the Act .(2) The accredited representative shall incur solidary and unlimited liability for the obligations of the non-resident person which have arisen on the date on which the accredited representative has assumed the obligations under Article 135 of the Act and where the non-resident person has nominated another accredited representative, until the date on which the other accredited representative has accepted to fulfil the obligations under Article 135 of the Act.Chapter FourteenTERMINATION OF REGISTRATION (DEREGISTRATION)Documents Linked to DeregistrationArticle 77. (1) The application for termination of registration (deregistration) under Article 109 of the Act shall be submitted in a standard form - appendix No. 8.(2) Enclosed to the application under Paragraph 1 shall be:1. a statement of the taxable turnover by months for the last 12 months preceding the current one;2. a statement of the total amount of taxable intra-Community acquisitions for the previous and current years, with the exception of acquisition of new means of transport and excisable goods;3. a statement of the sum total of the taxable amounts of the supplies under the terms of distance selling with place of transaction within the territory of the country, with the exception of the supplies of excisable goods, for the current year and for every of the two calendar years preceding the current one;4. (repealed, SG No. 16/2007); 5. the registration certificate(s) under Article 104 (1) and (2) of the Act.(3) In the cases of termination of registration on the grounds of Items 3 and 4 of Article 107 of the Act a copy of a court judgement certifying occurrence of the circumstances for termination of registration shall be enclosed to the application for deregistration.(4) (Amended, SG No. 16/2007) Together with the VAT return for the last tax period the person shall submit an inventory-memorandum for charging the tax under Article 111 of the Act according to a standard form - Appendix No. 9.(5) (New, SG No. 16/2007) The inventory-memorandum under Paragraph 4 shall be included in the sales log for the last tax period and in the net result for the last tax period stated in the VAT return for this tax period.Chapter FifteenDOCUMENTING SUPPLIESRequirements to Invoices and AdvicesArticle 78. (1) The forms of invoices and advices thereto issued by persons registered under the Act on grounds other than registration under Article 99, Article 100 (2) and Article 152 of the Act shall include the following printed requisites:1. sequence number;2. inscription "original" on the first counterpart;3. name, identification number of the person that will issue them;4. the VAT identification number under Article 94 (2) of the Act.(2) The numbers of the documents under Paragraph 1 shall be ten-digit, growing without any duplication and omissions, regardless of the type of form or document. Numbers of forms may duplicate only where they are issued from a fiscal device. All counterparts of any single document shall bear the same number.(3) The numbering of documents shall not depend on and be interrupted by the end of the calendar year. Where all possible numbers are exhausted, the person/branch shall re-start the numbering from "0000000001" upon advising the National Revenue Agency territorial directorate in writing thereof.(4) Where the person/branch has subdivisions or units, they may specify a range of numbers to be used by each subdivision (unit) in issuing tax documents thereby. The range shall be exhausted gradually over the next periods. Upon filling the range, a new range shall be assigned.(5) Faulty or damaged forms and cancelled documents shall not be destroyed and the issuer shall keep all counterparts thereof.(6) In the cases of cancellation of documents under Article 116 of the Act the memorandum under Article 116 (4) of the Act shall be kept by the issuer and the recipient.(7) Registered persons shall keep, use and report forms under the terms and procedures envisaged for the storage and reporting of documents in the Accountancy Act.(8) (New, SG No. 101/2006) The signature of the person who has prepared the document may be substituted by an identification code under Article 8 of the Accountancy Act.(9) (New, SG No. 101/2006) The invoices of intra-Community supplies issued by persons registered for VAT purposes in another Member State shall also be considered to meet the requirements of Article 114 of the Act in the cases where:1. the sequential number of the document is not a ten-character number or contains symbols other than Arabic numerals, or2. does not contain the requisites under Item 6 of Article 114 (1) of the Act.Issue of Invoices and AdvicesArticle 79. (1) Except for the cases of Article 113 (3) of the Act an invoice or advice thereto shall be issued regardless of whether the recipient is a registered or non-registered person under the Act.(2) An invoice/advice shall furthermore be issued for effecting supply with place of transaction outside the territory of the country within the economic activity of the person and no tax shall be charged in the invoice. The following shall be recorded in the invoice/advice as grounds for non-charging of tax under the Act:1. "Article 28с(Е)(3) 77/388/ЕЕС" - for supplies of goods as intermediary in a triangular operation;2. "Article 113 (9)" - for supplies of persons not registered under the Act or persons registered under Article 99 and Article 100 (2) of the Act;3. (amended, SG No. 101/2006, No. 3/2007) the relevant provision of the Act or the Regulations - for supply of services under Articles 22 - 24 of the Act;4. the relevant provision of the Act according to which the supply of goods or services is with place of transaction outside the territory of the country - for supply of goods and services other than those referred to in Items 1 - 3.(3) In case of supply with place of transaction within the territory of another Member State under the terms of distance selling, no grounds for non-charging of tax shall be recorded in the invoice/advice but the following shall be specified mandatorily:1. the VAT identification number of the person issued by the other Member State;2. the rate of tax as applicable in the other Member State;3. the amount of tax due on the supply.(4) In case of effecting exempt supply in the invoice/advice as grounds for non-charging of tax shall be specified the relevant provision of the Act pursuant to which the supply is exempt.(5) (New, SG No. 101/2006) For supply of single service to tourists in the invoice/advice as grounds for non-charging a tax shall be stated "Article 86 (1) of the RAVATA".(6) (New, SG No. 101/2006) For supply on which the tax is chargeable from the recipient of the supply in the invoice/advice as grounds for non- charging of tax shall be stated the relevant provision of the Act or the Regulations according to which the tax shall be charged from the recipient.(7) (Previous Paragraph 5, SG No. 101/2006) The original of the invoice/advice shall be submitted to the recipient of the supply.MemorandumsArticle 80 (1) The forms of memorandums issued by the persons registered under the Act, except for memorandums under Article 116 (4) of the Act, shall contain permanently printed requisites under Items 1, 3 and 4 of Article 78 (1).(2) The numbers of the memorandums shall be ascending without duplication and omissions and shall not depend on the type of the form. All counterparts of one memorandum shall have the same number.(3) The numbering of the forms of the memorandums does not depend on and shall not be interrupted by the end of the calendar year.(4) Where the person/branch of the person has subdivisions or units, the latter may specify a range of numbers to be used by each subdivision (unit) in issuing memorandums. The range shall be exhausted gradually over the next periods. Upon filling the range, a new range shall be assigned.(5) Incorrectly drawn up or corrected memorandums shall be cancelled and new ones shall be issued.(6) Faulty or damaged forms and cancelled memorandums shall not be destroyed and the issuer shall keep all the counterparts.(7) The provision of Article 78 (7) shall apply to the memorandums.Issue of MemorandumsArticle 81. (1) (Supplemented, SG No. 101/2006) For each individual supply the registered persons shall mandatorily issue a memorandum under Article 117 (2) of the Act in the following cases:1. (amended, SG No. 101/2006, No. 3/2007) where the person is a recipient on a supply under Article 82 (2), (4) and (5) of the Act , as well as where the person is an acquirer under Article 82 (3) and Article 84 of the Act; 2. where the person is an importer under Article 57 (1) and Article 58 (2) of the Act in connection with Article 49 (4) and Article 50 (2) herein;3. (supplemented, SG No. 101/2006) where the person is a supplier of goods and services under Article 6 (3) (including free of charge intra- Community supplies), Article 7 (4) and Article 9 (3) of the Act;4. where the person is a supplier of goods and services under Article 142 (1) and Article 144 (4) of the Act in connection with Article 87 (1) and Article 90 (1) herein;5. (amended, SG No. 101/2006) under Article 8 (6), Article 9 (4), Article 39, Article 46 (2), Article 67 (2), Article 100 (1) hereof.6. (new, SG No. 16/2007) upon utilization of Investment grants (subsidies) under Article 16.(2) (Amended, SG No. 101/2006) The memorandums under Paragraph 1 shall be completed in accordance with the requirements of Article 117 (2) of the Act in so far as otherwise provided for in this Regulations.(3) (New, SG No. 101/2006) In the cases of Item 1 of Paragraph 1 where the supplier is registered for VAT purposes in another Member State the memorandum under Paragraph 1 shall contain the following in addition to the requisites under Article 117 (2) of the Act :1. VAT identification number of the supplier under which the supply was effected, issued by another Member State;2. number and date of the invoice - where such has been issued until the date of issue of the memorandum.(4) (New, SG No. 101/2006) A memorandum under Article 116 (4) of the Act is not mandatorily issued where the date of issue of the cancelled document coincides with the date of issue of the new document.Issue of Tax Documents in Special CasesArticle 82. (1) Where after entry in the commercial register of the circumstances under Article 10 grounds for changing the taxable amount of a supply or grounds for rescission of a supply arise, the change shall be documented as follows:1. by issuing an advice to the invoice wherein the legal successor shall be stated as recipient - in cases where the transforming corporation, the transferor or the contributor under Article 10 of the Act was the recipient of the supply;2. by issuing an advice to the invoice wherein the legal successor shall be stated as supplier - in cases where the transforming corporation, the transferor or the contributor under Article 10 of the Act was the supplier;3. by issuing a memorandum under Article 117 (4) of the Act where the legal successor shall be stated as issuer - in cases where the tax was charged by the transforming corporation, the transferor or the contributor under Article 10 of the Act by issuing of a memorandum.(2) It shall be stated in the documents issued under Paragraph 1 that the supplier/recipient is the legal successor under Article 10 of the Act.(3) The legal successor under Article 10 of the Act shall have a copy of the tax document for the supply in respect of which the document under Paragraph 1 was issued.(4) Where after entry in the commercial register of the circumstances under Article 10 grounds arise for cancellation of a tax document under Article 116 of the Act , the legal successor under Article 10 of the Act shall be stated as the supplier, recipient respectively, in the new tax document and the memorandum under Article 116 (4) of the Act .Documenting of Supplies of Goods and Services upon Public Auction underTax and Social-Insurance Procedure Code or under Code of Civil Procedureor Sale under Registered Pledges Act and underCredit Institutions ActArticle 83. (1) In cases of sale under Article 131 (1) of the public enforcement agent, the bailiff or the pledgee shall execute a document of the sale, which shall contain the following requisites at a minimum:1. company name/name, address and identification number of the enforcement agent, the bailiff or the pledgee;2. company name/name, address, identification number, and VAT identification number of the debtor;3. company name/name, address, identification number, and VAT identification (if any) of the recipient (buyer);4. quantity and type of the goods or service;5. taxable amount and rate of tax;6. selling price of the thing under Article 131 (2) of the Act;7. date of issue of the document;8. name, surname and signature of the person who has executed the document.(2) The document under Paragraph 1 shall be issued in 3 counterparts within 5 days effective as from receipt of the full price on the sale.(3) Within the time limit under Paragraph 2 the public enforcement agent, the bailiff or the pledgee shall submit a notification in standard form - appendix № 20 - to the National Revenue Agency territorial directorate whereat the debtor is registered.(4) Where the thing has been awarded to the execution creditor on a motion thereby in payment of the claim thereof according to the procedure established by the Tax and Social-Insurance Procedure Code and by the Code of Civil Procedure, the supply shall be documented by the supplier (debtor) according to the standard procedure established in the Act. The taxable amount of the supply shall be determined in accordance with Article 131 (4) of the Act.Documenting of Damages and Interest of Compensatory NatureArticle 84. No tax document shall be issued for documentation of damages and interest of compensatory nature and the latter shall be documented by issuing a document certifying payment thereof.Chapter SixteenSUPPLIES UNDER SPECIAL ARRANGEMENTS FOR TAXINGSection IServices to TouristsArticle 85. (1) The tax on the supply of single service to tourists in the cases referred to in Article 136 of the Act shall be determined in accordance with the following formula: TA is the total amount, which the tour operator or the travel agent has received or will receive from the customer or the third party for the supply, including any subsidies and investment grants directly linked to such supply, the taxes and fees, as well as the incidental expenses such as commission and insurance, charged by the supplier to the recipient but exclusive of any trade discounts granted;PTot - the total taxable amounts and the tax on the supplies of goods and services received by the tour operator or the travel agent from other taxable persons for the direct benefit of the tourist;RT- the rate of tax at 20%.(2) Where the provision of Article 140 of the Act applies, the tax shall be determined according to the following formula: TA is the total amount, which the tour operator or the travel agent has received or will receive from the customer or the third party for the supply, including any subsidies and investment grants directly linked to such supply, the taxes and fees, as well as the incidental expenses such as commission and insurance, charged by the supplier to the recipient but exclusive of any trade discounts granted;PTot - the total taxable amounts and the tax on the supplies of goods and services received by the tour operator or the travel agent from other taxable persons for the direct benefit of the tourist;RT- the rate of tax at 20%.F - a factor rounded up to the second digit after the decimal place and determined in accordance with the following formula: P is the total of the taxable amounts and the tax on the supplies of goods and services received by the tour operator or the travel agent from other taxable persons for the direct benefit of the tourist and whose place of transaction is within the territory of third countries and territories.(3) (New, SG No. 101/2006) The rounding shall be made in accordance with the following rule:0,120 0,125 0,121 0,126 0,122 = 0,12 0,127 = 0,130,123 0,128 0,124 0,129 Documenting of Supply of Single Service to TouristsArticle 86. (1) Tour operators and travel agents shall document the supplies of single service to tourists provided thereby, including advance payments received on such supplies, by issuing invoices and advices to invoices wherein no tax shall be stated.(2) Invoices under Paragraph 1 shall be issued within 5 days from the date of payment (full or partial advance payment) or from the date of occurrence of the chargeable event for the supply, and advices to invoices under Paragraph 1, within 5 days from the alteration of the total amount which the tour operator or the travel agent has received or will receive from the customer or the third party for the supply.(3) (Amended, SG No. 101/2006) The invoices and advices to invoices under Paragraph 1 shall be recorded in the sales log for the tax period in which they are issued and the information in columns 9 - 25 of appendix № 10 shall not be completed.(4) (New, SG No. 101/2006) For supplies of services to tourists the tour operator or the travel agent shall prepare a report on sales effected in the tax period under Article 120 (1) of the Act , which shall not be included in the sales log.Charging of TaxArticle 87. (1) Upon occurrence of a chargeable event for the supply of single service to tourists the tour operator or the travel agent shall charge the tax for the supply of the single service to tourists effected by them by issuing a memorandum not later than 5 days from the occurrence of the chargeable event.(2) Besides the requisites under Article 117 (2) of the Act the memorandum under Paragraph 1 shall furthermore contain number and date of the tax documents issued in connection with the supply.(3) In case of alteration of the taxable amount of the supply in respect of which a memorandum under Paragraph 2 is issued, the correction shall be made within 5 days from the occurrence of the alteration, whereby a correction memorandum shall be issued, which shall satisfy the provisions of Article 117 (4) of the Act .(4) (Amended, SG No. 101/2006) The memorandums under Paragraphs 2 and 3 shall be recorded in the sales log for the relevant tax period and the information in columns 9 - 25 of appendix № 10 shall be completed in respect thereof.Section IISupply of Second-Hand Goods, Works of Art, Collectors'Items and AntiquesSupply of Second-Hand Goods, Works of Art, Collectors'Items and AntiquesArticle 88. (1) (Previous wording of Article 88, SG No. 101/2006) The tax on the supply of goods under special arrangements for taxing the margin under Chapter Seventeen of the Act shall be determined according to the following formula: T is the tax due for the supply;Ps - the total amount which the taxable dealer has received or will receive from the customer or the third party for the supply, including any subsidies and investment grants directly linked to such supply, the taxes and fees, as well as the incidental expenses for packing, transport, commission and insurance, charged by the supplier to the recipient but exclusive of any trade discounts granted;Pp - the amount which has been paid or will be paid for the goods received by the persons under Article 143 (1) and (3) of the Act , including the tax under the Act, and where the goods are imported, the taxable amount upon importation, including the tax under the Act;RT - the rate of the tax applicable to the supplies under Chapter Seventeen of the Act.(2) (New, SG No. 101/2006) The right of option under Article 143 (3) of the Act shall be exercised by means of submission of a notification according to a standard form set out in Appendix No. 23.Documenting of SuppliesArticle 89. (1) (Supplemented, SG No. 16/2007, effective 20.02.2007) Taxable dealers shall document the supplies effected thereby under special arrangements for taxing the margin by issuing invoices and advices to invoices wherein "Article 143 of the Act " shall be stated. The taxable amount and tax shall not be stated in the invoices and advices thereto.(2) (Amended, SG No. 101/2006) The invoices and advices to invoices under Paragraph 1 shall be recorded in the sales log for the relevant period and the information in columns 9 - 25 of appendix № 10 shall not be completed.Charging of TaxArticle 90. (1) At the end of every tax period the taxable dealers shall charge the tax for the supplies under Chapter Seventeen of the Act effected thereby by issuing a memorandum.(2) The memorandum under Paragraph 1 shall contain the following information:1. number and date;2. name, identification number and VAT identification number of the issuer;3. tax period;4. description of the goods - second-hand, works of art, collectors' item or antique;5. purchase price of the goods under Item 4;6. selling price of the goods under Item 4;7. difference between the total amount of the selling prices under Item 6 for the period and the total amount of the purchase prices under Item 5 for the period;8. tax charged for the period.(3) A separate memorandum shall be issued for sales upon public auction.(4) (Amended, SG No. 101/2006) The memorandums under Paragraphs 2 and 3 shall be recorded in the sales log for the relevant tax period and the information in columns 9 - 25 of appendix № 10 shall be completed in respect thereof.Credit for Input TaxArticle 91. Where the taxable dealer has not exercised the right under Article 143 (3) of the Act, the right to deduct credit for input tax for imported and acquired goods under Items 1 and 2 of Article 143 (3) shall occur and shall be exercised according to the standard procedure of the Act.Annual AdjustmentArticle 92. (1) Where the credit for input tax under Article 147 (1) of the Act used during the year exceeds the tax charged during the year on the supplies under Chapter Seventeen of the Act, a tax to the amount of the excess shall be chargeable from the registered dealer.(2) In the cases of Paragraph 1 the excess shall be declared in the VAT return for the last tax period as annual adjustment in cell 43 of appendix № 13 for the last tax period.Average Margin of DealerArticle 93. (1) (Amended, SG No. 101/2006) The average margin of a dealer shall be determined on the basis of effected supplies under Chapter Seventeen of the Act for the last 12 months preceding the date of deregistration of the dealer in accordance with the following formula: AM is the average margin of the dealer rounded up to the second digit after the decimal place;TPS - the total amount of PS under Article 88 for the period;TPP - the total amount of PP under Article 88 for the period;(2) The tax upon deregistration of a dealer shall be determined in accordance with the following formula: T is the tax due on the occasion of the dealer's deregistration on available second-hand goods, works of art, collector's items and antiques;PP - the amount which has been paid or will be paid for the available goods, including the tax under the Act, and where the goods are imported, the taxable amount upon importation, including the tax under the Act;AM - the average margin determined in accordance with Paragraph 1;RT - the rate of the tax applicable to the supplies under Chapter Seventeen(3) The dealer shall be liable for tax under the standard procedure of the Act upon deregistration for the available assets in respect of which no tax has been charged under Paragraph 2.Sales ReportArticle 94. (1) In the cases referred to in Article 151 (6) of the Act for supplies in respect of which special arrangement of taxing has been applied under Chapter Seventeen of the Act , the taxable dealer shall prepare a sales report for the tax period under Article 120 (1) of the Act .(2) The report under Paragraph 1 shall not be included in the sales log.(3) The supply of goods other than those referred to in Paragraph 1 shall be reported under the standard procedure of the Act.Section IIISupplies of Services Supplied Electronically by Persons Who Are NotEstablished within Community.Electronic Application for Registration and DeregistrationArticle 95. (1) In the cases of registration under Article 152 of the Act and of deregistration under Article 153 (1) of the Act the persons shall submit electronically to the National Revenue Agency territorial directorate - Sofia, an application for registration, deregistration respectively.(2) The requisites, the format and the manner of sending electronic applications under Paragraph 1 shall be announced on the website of the NRA.Electronic RegisterArticle 96. (1) Any person registered under Article 152 of the shall be obligated to prepare and keep an electronic register for the supplies effected thereby under Chapter Eighteen of the Act.(2) The parameters and requirements to the structure of data in the electronic register under Article 120 (3) of the Act shall be in accordance with appendix № 18.DeclarationArticle. 97. The VAT return for every tax period under Article 157 (2) of the Act shall be prepared and submitted by the registered person under Article 119.Section IVInvestment GoldRight of OptionArticle 98. (1) Where the supplier wishes to exercise the right under Article 160 (2) of the Act, the said supplier shall state this, including in the tax document issued for the supply the wording "Article 160 (2) of the Act applies to this supply and in accordance with Item 2 of Article 161 (1) of VAT Act the tax will be charged from the recipient in the amount of ..... (the amount of VAT shall be specified)".(2) In the cases of Paragraph 1 the tax shall be charged from the recipient of the supply who is a person registered under the Act.Supply of Gold Materials and Semi-manufactured ProductsArticle 99. (1) Notwithstanding Article 82 (1) of the Act, the tax on the supply of gold materials or semi-manufactured products of a purity of 325 thousandths or greater shall be charged from the recipient who is a person registered under the Act.(2) In the cases referred to in Paragraph 1 the supplier shall state in the tax document issued the wording "Pursuant to Item 1 of Article 161 (1) of VAT Act the recipient shall charge VAT in the amount of ..... (the amount of VAT shall be specified)".Charging of TaxArticle 100. (1) In the cases under Article 98 (2) and Article 99 (1) the tax shall be charged from the recipient by issuing a memorandum under Article 117 (2) of the Act.(2) The memorandum under Paragraph 1 shall be issued within 5 days effective as from the date on which the tax on the supply became chargeable.(3) In the cases of change of the taxable amount of the supply the change shall be documented by the recipient by issuing a memorandum under Article 117 (4) of the Act.(4) The memorandums under Paragraphs 1 and 2 shall be recorded in the sales log for the relevant tax period.(5) (New, SG No. 101/2006) The report on sales effected in the tax period under Article 120 (1) of the Act shall not be included in the sales log.Section VSpecial Arrangements for New Means of TransportReturn on Intra-Community Supply or Intra-Community Acquisition of NewMeans of Transport by Persons Who Are Not RegisteredArticle 101. (1) Any person not registered under the Act, who effects an intra-Community acquisition of a new means of transport referred to in Article 13 (2) of the Act or effects an incidental intra-Community supply of a new means of transport referred to in Article 7 (2) of the Act, shall be obligated to declare the intra-Community acquisition or the incidental supply as effected by submitting a return in a standard form - appendix № 19.(2) The return shall be submitted within 14 days after the lapse of the tax period during which the tax on the acquisition or the supply became chargeable. The return shall be submitted at the competent National Revenue Agency territorial directorate whereat the person is registered or is subject to registration under the Tax and Social-Insurance Procedure Code.(3) Enclosed to the return under Paragraph 1 shall be a copy of the document issued by the supplier, which shall contain the requisites under Items 3 - 15 of Article 114 (1) of the Act.Remittance of Tax upon Intra-Community Acquisition of New Means ofTransport by a Person Who Is Not RegisteredArticle 102. (1) The tax due on an intra-Community acquisition shall be remitted by the person under Article 101 within 14 days after the lapse of the tax period during which the tax on the acquisition became chargeable.(2) The tax shall be remitted to Executive Budget Revenue by crediting an account of the National Revenue Agency territorial directorate whereat the person is registered or is subject to registration under the Tax and Social-Insurance Procedure Code.Refund of Tax upon Subsequent Intra-Community Supply of aNew Means of Transport by a Person Who Is Not RegisteredArticle 103. (1) The right to refund tax under Article 168 (5) of the Act shall be exercised whereby the person who effects an intra-Community supply of the new means of transport shall specify the amount of the input tax claimable in the return for the intra-Community supply under Article 101 (1).(2) In the cases under Paragraph 1, the following documents shall be enclosed to the return:1. a copy of a document certifying the acquisition of the new means of transport:(а) an invoice satisfying the requirements of Article 114, where the means of transport is purchased within the territory of the country, or(b) a customs declaration, a customs document respectively, certifying the completion of customs clearance, where the means of transport is imported,(c) a document issued by the supplier which shall contain the requisites under Items 3 - 15 of Article 114 (1) of the Act , where the means of transport is acquired through an intra-Community acquisition;2. a copy of a payment document certifying that the tax has been remitted to Executive Budget Revenue, where the means of transport is acquired through importation or intra-Community acquisition;3. documents certifying dispatch or transportation of the means of transport from the territory of the country to the territory of another Member State:(а) a transport document or a written confirmation by the recipient or a person authorized thereby, certifying that the means of transport has been received within the territory of another Member State, where the transport is at the expense of supplier or the recipient, but has been carried out by a third party, or(b) a transport document or a written confirmation by the recipient or a person authorized thereby, certifying that the means of transport has been received within the territory of another Member State, where the transport has been carried out by the supplier, or(c) a written confirmation by the recipient, certifying that the means of transport has been received within the territory of another Member State, where the transport has been carried out by the recipient;4. a declaration (free wording) signed by the recipient wherein the recipient certifies:(а) that the recipient acquires a new means of transport within the meaning of Item 17 of 1 of the supplementary provision of the Act;(b) that the recipient is aware that the intra-Community acquisition of the means of transport is subject to declaration and taxation in the Member State where the means of transport is dispatched/transported;5. a document issued by an after-sales service establishment, insurance company or a competent government authority (ministry, agency, etc.) certifying that the means of transport is new within the meaning of Item 17 of 1 of the supplementary provision of the Act .(3) The tax under Paragraph 1 shall be refunded within 2 months from submission of the return and the documents enclosed thereto.Intra-Community Acquisition and Intra-Community Supply ofNew Means of Transport by Persons Registered under the ActArticle 104. (1) (Previous wording of Article 104, SG No. 101/2006) Any person registered under the Act who effects an intra-Community supply of a new means of transport under Article 7 (2) of the Act (incl. incidental) or intra-Community acquisition of a new means of transport under Article 13 (2) of the Act shall apply the general provisions for taxation of intra-Community supplies and intra-Community acquisitions.(2) (New, SG No. 101/2006) The invoices issued by the persons under Paragraph 1 shall be recorded in the VIES return for the relevant tax period provided that the recipient is registered for VAT purposes in another Member State.(3) (New, SG No. 101/2006) In the cases of Paragraph 1 where the recipient on the supply is a person not registered for VAT purposes in another Member State, the invoices under Paragraph 1 shall not be recorded in the VIES return.Chapter SeventeenTAX EXEMPTION AND REFUND IN SPECIAL CASESSection IExemption upon ImportationImportation Exempted by Virtue of International TreatiesArticle 105. (1) Where an international treaty whereto the Republic of Bulgaria is a signatory, ratified and promulgated according to the relevant procedure, provides for exemption of the importation from taxes, levies or other charges (payments, duties) having an effect equivalent to an indirect tax, including where such treaties are financed by resources of the executive budget or the municipal budgets or by loans guaranteed by the Government, exemption shall be granted by means of a written confirmation by the authority coordinating the performance of the contract to the regional customs directorate in whose structure the customs office carrying out the customs clearance of the specific supply is.(2) The written confirmation shall contain:1. the name, date of promulgation and date of entry into force of the international treaty, agreement, accord, convention, etc., in connection with which a contract is entered into with the importer, and the grounds for exemption;2. the name of the programme or project financed with funds in implementation of the international treaty under Item 1;3. the number, date and subject of the contract entered into for implementation of the international treaty and according to which the person under Item 4 is the importer, and the assignor is the coordinating authority under Paragraph 1;4. the company name, registered address, registered office, identification number (for non-resident person - identification number in the country in which it is a resident person) of the importer under the contract referred to in Item 3;5. type, quantity and value of the imported goods in connection with the performance of the contract referred to in Item 3;6. information about the persons authorized to sign contracts or effect payments with funds granted under the international treaty.(3) Copies of all documents necessary for the customs clearance of the goods shall be enclosed to the written confirmation under Paragraph 1.(4) The authority coordinating the performance of the international treaty shall notify in writing the Head Office of the National Customs Agency about the persons authorized to sign the written confirmations under Paragraph 1 and shall send a copy of the contract entered into in implementation of the international treaty.(5) The director of the regional customs directorate shall make inspection on compliance with the requirements for tax exemption on the basis of the relevant written confirmation.(6) Where in the course of an inspection it is established that the requirements for exemption exist, the director of the regional customs directorate shall notify the head of the customs office in charge of the customs clearance that the grounds for exemption from tax upon importation exist. The notification shall also be sent to the authority coordinating the performance of the international treaty.(7) Where the requirements for exemption are not satisfied, the director of the regional territorial directorate shall notify the authority coordinating the performance of the international treaty thereof.Exempted Importation of Goods by Armed Forces of Other StatesWhich Are Parties to North Atlantic TreatyArticle 106. (1) Exempted importation shall be the importation of goods imported by the armed forces of other states which are parties to the North Atlantic Treaty for use by such armed forces or by the civilian staff accompanying them, or for supplying their messes or canteens, where such forces take part in the common defence effort of the North Atlantic Treaty within the territory of the country.(2) Exemption under Paragraph 1 shall be granted by virtue of a Manifest NATO 302, certified in accordance with NATO procedures.Section IIExempted Supplies by Virtue of International TreatiesProcedure for Receiving Opinion on Application of Zero RateArticle 107. (1) In respect of supplies which are exempted from value added tax by virtue of international treaties, accords, agreements, conventions etc. whereto the Republic of Bulgaria is a signatory, ratified and promulgated according to the relevant procedure, a zero rate of tax shall apply, including in respect of the part of the supply financed by resources of the executive budget or the municipal budgets or by loans guaranteed by the Government.(2) Any person registered under the Act who is the main contractor under the contract referred to in Item 3 of Paragraph 3 shall submit a written request for confirmation of the existence of grounds for application of the arrangement under Article 173 (1) of the Act to the National Revenue Agency territorial directorate - Sofia.(3) The request under Paragraph 2 shall contain:1. the name, date of promulgation and date of entry into force of the international treaty, agreement, accord, convention, etc., which provide for exemption of taxable supplies from value added tax or a tax, levy or charge with equivalent to an indirect tax effect;2. the name of the programme or project in connection with which the supplies are effected, in respect of which confirmation of existence of the grounds for application of the arrangement under Article 173 (1) of the Act is required.3. (supplemented, SG No. 16/2007) a certified by the main contractor copy of the contract entered into in implementation of a programme or project under Item 2 by virtue of which the taxable person is the main contractor and the coordinating authority is the assignor or recipient;4. the company name, registered address, registered office , identification number, VAT identification number of the person which is the main contractor under the contract referred to in Item 3;5. the name, registered address, registered office, identification number of the coordinating authority under Item 3 and where the latter is a non-resident person, the name, registered address, and registered office.(4) Within 14 days from receipt of the request the National Revenue Agency territorial directorate - Sofia shall send to the registered person confirmation of existing grounds to use the arrangement under Article 173 (1) of the Act.(5) Within the meaning of this Section, the coordinating authority is a Bulgarian or non-resident legal person or organisation, receiving supplies of goods and/or services under the contract under Item 3 of Paragraph 3 and implementing a programme or project financed within the framework of an international treaty, accord, agreement, convention or another instrument.(6) The status of the coordinating authority under paragraph 5 shall be certified at the National Revenue Agency Territorial Directorate - Sofia by issuing a document in writing signed by the persons designated by each government to implement the respective international treaty, accord, agreement, convention or another instrument.(7) Within the meaning of this Section, the main contractor is a person who is the supplier of goods and/or services under the contract under Item 3 of Paragraph 3, under which the coordinating authority is the assignor.(8) The zero rate under Article 173 (1) of the Act shall be allowed only in respect of supplies effected by the main supplier(s).Obligations of the Coordinating AuthorityArticle 108. (1) The persons appointed by the relevant State to implement the relevant international treaty, accord, agreement, convention or another instrument shall certify said circumstance by a document to the National Revenue Agency Territorial Directorate - Sofia.(2) By the 15th day of the month following every quarter of the calendar year the persons under Paragraph 1 or the coordinating authorities within the meaning of Article 107 (5) of the Act shall submit at the National Revenue Agency Territorial Directorate - Sofia information about:1. contracts under Item 3 of Article 107 (3) entered into in the respective period, together with the data under Article 107 (3) of the Act about the parties to every contract, as well as the name of the programme or project in implementation of which the contracts have been entered into;2. the persons authorized to sign contracts or effect payments under a programme or project;3. total amount of agreed and paid funds under contracts entered into under Item 3 of Article 107 (3) for purchase of goods and services in Bulgaria as well as under every separate contract;4. manner of financing the supplies.Section IIIExempted Supplies in Which Recipients are Armed Forcesof Other States or Institutions of the European UnionCertification of Supplies Liable to Tax at Zero RateArticle 109. (1) Liable to tax at zero rate shall be the goods and services in which recipients are:1. the armed forces of other states which are parties to the North Atlantic Treaty, or2. institutions of the European Union.(2) For application of the zero rate under Paragraph 1 the supplier shall hold a certificate of tax exemption in a standard form - appendix № 21 - certified by the National Revenue Agency Territorial Directorate - Sofia, and an invoice on the supply.Procedure for Certification of the CertificateArticle 110. (1) The persons under Article 109 (1) shall submit at the National Revenue Agency Territorial Directorate - Sofia the appendix under Article 109 (2) in two counterparts before effecting the purchases.(2) The territorial directorate under Paragraph 1 shall certify the counterparts and shall keep one of the counterparts and the other one shall be submitted to the person.(3) The territorial directorate under Paragraph 1 shall keep a register of the certified certificates under Paragraph 2.Requirements to Forms of CertificateArticle 111. The form of the certificate under Article 109 (2) shall satisfy the following requirements:1. to be white with size 210 mm x 297 mm with maximum deviation in length of - 5 mm or +8 mm;2. to be printed on paper satisfying the requirements set out in the Official Journal of the European Communities № C 164/3 of 1.07.1989.Chapter EighteenREPORTING AND DECLARATIONSection IReports and LedgersSales LogArticle 112. (1) In respect of supplies for which no invoice is issued on the grounds of Article 113 (3) of the Act the supplier who is a registered person under the Act shall prepare a sales report, which shall contain consolidated information on the supplies for the relevant tax period.(2) The report under Paragraph 1 shall be prepared on the last day of the tax period at the latest.(3) The sales report under Paragraph 1 shall describe:1. the total sum of the taxable amounts and the sum total of the tax on the taxable supplies - separately according to the rate of tax (20%, 7%, 0%, respectively);2. the sum total of the taxable amounts of exempt supplies;3. (supplemented, SG No. 101/2006) the sum total of the taxable amounts of supplies other than those under Item 2, on which no tax shall be charged (with right to credit for input tax, without right to credit for input tax respectively).(4) (Amended, SG No. 101/2006) The supplier shall record the sales report under Paragraph 3 in the sales log, by completing columns 01 - 05 and 9 - 25 of appendix № 10.(5) The report under Paragraph 1 shall not describe the supplies on which tax is charged by the supplier with a memorandum in accordance with the provisions of the Act and these Regulations."Sales Log", "Purchases Log", and "Intra-Community Suppliesof New Means of Transport Ledger" Ledgers of Account(Title amended, SG No. 101/2006) Article 113. (1) Registered persons shall mandatorily keep the ledgers under Article 124 (1) of the Act: a purchases log and a sales log containing information of all issued and received tax documents and reports, which shall be issued in accordance with the provisions of the Act or these Regulations.(2) Registered persons shall keep the ledger under Paragraph 1 "Sales Log" in a standard form - appendix No. 10 - regardless of the type and form of their accounting systems.(3) (Supplemented, SG No. 101/2006) Registered persons shall keep the ledger under Paragraph 1 "Purchases Log" in a standard form - appendix No. 11 - regardless of the type and form of their accounting systems. Registered persons on the grounds of Articles 99 and 100 (2) of the Act are not required to keep mandatorily a purchases log. In these cases the purchases log submitted by the person on a magnetic data storage medium shall contain one single entry with values "zero" for numerical fields and "interval" for symbol fields.(4) Registered persons shall furthermore submit the information under Paragraph 1 on a magnetic or optical data storage medium, electronically respectively, according to parameters and requirements to files set out in appendix No. 12.(5) Information from ledgers of account shall be used for completion of VAT returns and VIES returns under the Act.(6) Data in the ledgers of account on a paper-based medium shall coincide completely with data submitted on the magnetic or optical data storage medium.(7) The data to be completed and submitted in the sales log and purchases log shall provide all the information contained in appendix No. 10 and appendix No. 11 respectively.(8) The information with the data to be submitted on a magnetic or optical data storage medium together with the VAT return and VIES return for the respective period shall provide all the information contained in appendix No. 10 and appendix No. 11.(9) (Amended, SG No. 101/2006) Where the sum of the taxable amounts of taxable supplies for a tax period in the documents included by the registered person in the purchases log or in the sales log exceeds BGN 1,000, the registered person shall have the right not to submit the ledgers of account on a paper-based medium.(10) (Amended, SG No. 101/2006) The right under Paragraph 9 shall be exercised and the registered person together with the VAT return for the relevant tax period shall file a request in writing (free wording) to the director of the relevant National Revenue Agency territorial directorate.(11) (New, SG No. 101/2006) Upon submission of the ledgers of account under Paragraphs 2 and 3 the following columns are not required to be printed mandatorily:1. subject of the supply and name of counterparty, and2. the columns which contain only blank fields.(12) (New, SG No. 101/2006) The registered person who is an intermediary in a triangular operation shall record the invoice issued by the transferor in the triangular operation in the purchases log for the tax period during which the invoice for the supply has been recorded by the intermediary to the acquirer in the triangular operation. In these cases columns 9 - 14 shall not be completed and in column "type of document" code "09" shall be indicated, and in column "TA upon acquisition of goods by an intermediary in a triangular operation" shall be stated the taxable amount in BGN specified in the invoice issued by the transferor in the triangular operation. Said taxable amount shall not be taken into account in the calculation of the net result for the period.(13) (New, SG No. 101/2006) Registered persons who in the calendar quarter have effected intra-Community supplies of new means of transport the recipients whereof are persons not registered for VAT purposes in other Member States, shall record the supplies effected in the calendar quarter in an intra-Community supply of new means of transport ledger.(14) (New, SG No. 101/2006) The persons shall provide information from the ledger under Paragraph 13 on a magnetic or optical data storage medium by the 14th day of the month following the calendar quarter for which it refers.(15) (New, SG No. 101/2006) The parameters and requirements to the structure of data in the ledger under Paragraph 13 shall be in compliance with appendix No. 22.(16) (New, SG No. 101/2006) Supplies with place of transaction outside the territory of the country, which have not been equalized to taxable ones within the meaning of Article 69 (2) of the Act , as well as supplies and activities outside the independent economic activity of the person shall be recorded in the ledgers of account as exempt supplies.Requirements to Magnetic and Optical Data Storage MediumsArticle 114. (1) (Amended, SG No. 101/2006) Magnetic and optical data storage mediums, as well as electronically submitted data from ledgers of account shall contain a set of the following files: Deklar, PRODAGBI, POKUPKI.(2) Any of the files under Paragraph 1 shall have the format of a standard ASCII text file with "txt" extension.(3) The files under Paragraph 1 shall be furthermore prepared and submitted in the cases where they do not contain information.(4) The files under Paragraph 1 shall cover only one tax period concerning the tax period for which the VAT return is submitted.(5) The National Revenue Agency territorial directorates shall not accept magnetic or optical data storage mediums which do not satisfy the parameters set out in appendix No. 12.(6) The National Revenue Agency territorial directorate shall draw up and submit a protocol certifying acceptance or refusal to accept the magnetic or optical data storage medium.(7) If no acceptance protocol under Paragraph 6 is issued, it shall be considered that the registered person has not submitted the information from the ledgers of account on a magnetic or optical data storage medium.(8) (Amended, SG No. 101/2006) Upon established inconsistencies between data submitted in the VAT return and data in the ledgers of account under Article 124 of the Act submitted on a magnetic or optical data storage medium thereto, the person submitting the data shall be asked to remove the inconsistencies within 7 days. To certify the circumstances referred to in this Paragraph the National Revenue Agency territorial directorate shall prepare and send a message.(9) (Supplemented, SG No. 101/2006) In the cases of Paragraph 8 the VAT return shall be considered to be submitted upon removal of the inconsistency upon submission of a correct VAT return and this shall not result in modification of the legally prescribed time limit for its submission and payment of the debt.Section IIDeclaration of Tax and VAT ReturnsDeclaration of TaxArticle 115. (1) Any registered person shall submit, as stated in this Section, a VAT return under Article 125 (1) of the Act, a VIES return under Article 125 (2) of the Act and a return on the supply of services supplied electronically under Article 157 (2) of the Act .(2) Tax periods for reporting of tax and time limits for submission of returns under Paragraph 1 are stipulated by the Act.(3) Determination, declaration and reporting of tax shall be effected by issuing the relevant standard forms set out in these Regulations.(4) Declaration under the terms of Paragraph 1 shall be effected by submission of the relevant standard form on a paper-based medium, as well as on a magnetic or optical data storage medium where this is required by the Act.(5) Paragraph 4 shall not apply in the cases of submission of returns electronically under the terms and procedure of the Tax and Social-Insurance Procedure Code.(6) Returns under Paragraph 1 shall be submitted in person at the competent National Revenue Agency territorial directorate by the person representing the registered person or a person authorized thereby.(7) The person shall mandatorily complete all data required in the standard forms of the returns and the ledgers of account under this Chapter. In case a field describing value is blank (shall not be completed according to the provisions of the Act and these Regulations) a zero value shall be specified.(8) Returns under Paragraph 1 shall be completed in Bulgarian.(9) (Amended, SG No. 101/2006) Returns under Paragraph 1 shall be published in Bulgarian on the website of the NRA.(10) Correction of errors in the VAT return and VIES return shall be effected in accordance with the terms of Article 126 of the Act.VAT ReturnArticle 116. (1) Any registered person shall be obligated to submit a VAT return under Article 125 (1) of the Act in a standard form - appendix № 13 - for every tax period.(2) A VAT return under Paragraph 1 shall furthermore be submitted in the cases where no tax is payable or claimable, as well as in the cases where the registered person has not effected or received supplies or acquisitions or has not effected importation for said tax period.(3) The registered person shall submit the return under Paragraph 1 at the competent National Revenue Agency territorial directorate for every tax period for which it refers.(4) The registered person shall submit at the competent National Revenue Agency territorial directorate the ledgers of account under Article 124 (1) of the Act together with the VAT return under Paragraph 1.VIES ReturnArticle 117. (1) The VIES return shall be prepared in a standard form - appendix № 14.(2) The return shall contain the following data:1. data about the registered person - name/company name, VAT identification number, address for correspondence;2. data about the person submitting the return - name, PIN/Personal Number of Non-resident, address for correspondence;3. tax period for which the return is submitted in format: mm/yyyy;4. (amended, SG No. 101/2006) sum total of taxable amounts of:(a) all effected intra-Community supplies of goods the recipients whereon are persons registered for VAT purposes in another Member State;(b) supplies of services under Article 21 (3) and Articles 22 - 24 of the Act with place of transaction within the territory of another Member State, the recipients whereon are persons registered for VAT purposes in another Member State;(c) supplies as an intermediary in a triangular operation;5. (amended, SG No. 101/2006) taxable amount of intra-Community supplies of goods, whereby recipients are VAT registered persons in another member state.6. (amended, SG No. 101/2006) total number of declared lines;7. (amended, SG No. 101/2006) VAT identification number of the recipient/acquirer, including the sign of the Member State under ISO 3166;8. (amended, SG No. 101/2006) the sum total of the taxable amounts of effected intra-Community supplies of goods to one registered person for VAT purposes in another Member State;9. (amended, SG No. 101/2006) the sum total of the taxable amounts of effected supplies of services under Article 21 (3) and Articles 22 -24 of the Act to one registered person for VAT purposes in another Member State;10. (amended, SG No. 101/2006) the sum total of the taxable amounts of effected supplies as intermediary in triangular operations to one registered person for VAT purposes in another Member State;11. (new, SG No. 101/2006) the tax period in which the tax on the supplies under Items 8 - 10 became chargeable in case said period is different from the tax period under Item 3.(3) (Amended, SG No. 101/2006) Intra-Community supplies of goods on which the person is supplier, supplies of services under Article 21 (3) and Articles 22 - 24 of the Act with place of transaction within the territory of another Member State, as well as supplies as intermediary in a triangular operation shall be mandatorily recorded in the ledgers of account .(4) (Amended, SG No. 101/2006) The VIES return shall be prepared on the basis of the consolidated data from the ledgers of account under Article 124 (1) of the Act, excluding intra-Community supplies of goods and supplies of services under Article 21 (3) and Articles 22 - 24 of the Act, with place of transaction within the territory of another Member State the recipients whereon are persons not registered for VAT purposes.(5) (Amended, SG No. 101/2006) Where in the tax period the registered person has not effected intra-Community supplies, supplies of services under Article 21 (3) and Articles 22 - 24 of the Act with place of transaction within the territory of another Member State, supplies as intermediary in a triangular operation and has not shown missing data for a previous tax period in accordance with Item 1 of Article 126 (3) of the Act, no VIES return shall be submitted.(6) The registered persons shall also submit the data under Paragraph 2 on a magnetic or optical data storage medium.(7) Data from the VIES return on a paper-based medium shall coincide completely with the data submitted on a magnetic or optical data storage medium.(8) (New, SG No. 16/2007) Submission of VIES return is not mandatory for supply of services under Article 21 (3) where the supply of the services with place of transaction within the territory of the country might be exempt.Requirements to Magnetic and Optical MediumsArticle 118. (1) The parameters of the data of the information from the VIES return, the information submitted on a magnetic or optical data storage medium as well as the requirements to the structure of the files submitted electronically are specified in appendix № 15.(2) The territorial directorates of the National Revenue Agency shall not accept magnetic or optical data storage mediums which do not satisfy the parameters set out in appendix № 15.(3) The territorial directorate of the National Revenue Agency shall prepare a protocol ascertaining the acceptance or refusal to accept the magnetic or optical data storage medium.(4) If no protocol under Paragraph 3 ascertaining the acceptance has been issued, it shall be deemed that the registered person has not submitted the information from the VIES return on a magnetic or optical data storage medium.(5) (Supplemented, SG No. 101/2006) The VIES return shall contain only one entry (line) with the consolidated data for all effected supplies to a given recipient/acquirer from a Member State for the current period, possessing a valid VAT identification number issued by the Member State.(6) Additional entries for the same recipient/acquirer are allowed only upon declaration of missing data for previous periods in accordance with Item 1 of Article 126 (3) of the Act.(7) Upon established inconsistencies between data submitted in the VIES return and data in the ledgers of account under Article 124 of the Act submitted on a magnetic or optical data storage medium thereto, the person submitting the data shall be asked to remove the inconsistencies within 14 days. To certify the circumstances referred to in this Paragraph the National Revenue Agency territorial directorate shall prepare and send a message.(8) In the cases of Paragraph 7 the VIES return shall be deemed to be submitted after removal of the inconsistency on submission of a correct VIES return.Return on Taxation of Supply of Services Effected Electronically byPersons Who Are not Established in the CommunityArticle 119. (1) Any registered person under Chapter Eighteen of the Act who effects supply of services effected electronically shall submit a return under Article 157 (2) of the Act in a standard form - appendix № 16.(2) The return shall be submitted electronically at the National Revenue Agency territorial directorate - Sofia under the terms and according to the procedure of the Tax and Social-Insurance Procedure Code.(3) The file with the information for the VAT return under Paragraph 1 submitted electronically shall satisfy the requirements set out in appendix № 17.(4) Data for the return under Paragraph 1 shall be completed on the basis of the consolidated data from the electronic register under Article 120 (3) of the Act.Exchange of Information with Foreign AdministrationsArticle 120. (1) (Amended, SG No. 101/2006) The information specified in the ledgers of account, the intra-Community supply of new means of transport ledger and the VIES return shall be exchanged with the administration of other Member States under the procedure, manner and time limits set out in Council Regulation (EC) № 1798/2003.(2) Exchange of information related to the levy of value added tax with the tax administrations of other Member States shall be effected under the terms of the Tax and Social-Insurance Procedure Code.Chapter NineteenOTHER OBLIGATIONSAccounting and Reporting of TaxArticle 121. (1) Registered persons shall keep documentation and accounts in conformity with the requirements of the Accountancy Act, the Value Added Tax Act and these Regulations.(2) Documentation and accounts shall be kept for taxable supplies, exempt supplies, supplies with place of transaction outside the territory of the country, intra-Community acquisitions, received supplies on which the person is the payer of the tax under Chapter Eight of the Act, and for importation.(3) Branches of registered persons shall keep accounts and maintain documentation as separately registered persons, without having any settlements with the budget.(4) Branches shall submit to the registered person the required information for completion of the VAT return, VIES return for the period and the information for the magnetic and data storage mediums.(5) Settlement with the budget for the value added tax shall be carried out by the registered person.(6) Branches of non-resident persons shall settle payments with the budget independently.(7) Registered persons shall calculate the net result for the tax period on the basis of the documents recorded in the ledgers for this tax period.(8) Any registered person shall keep a register of the goods under Items 8 - 10 of Article 7 (5) and Items 8 - 10 of Article 13 (4) of the Act, which shall provide the following information:1. type of dispatched/received goods;2. purpose of dispatch/receipt of goods;3. quantity of dispatched/received goods;4. Member State to/from which the goods have been dispatched/received;5. date of dispatch/receipt of the goods.SUPPLEMENTARY PROVISION 1. (1) (Former text of 1, SG No. 3/2007) For the purposes of this Regulations:1. "Identification number" shall mean:(а) the uniform identification code under the commercial register - of the persons entered in the commercial register;(b) the uniform identification code under BULSTAT - of the persons entered in the BULSTAT register;(c) the personal identification number or the personal number of a non-resident - of natural persons who are not entered in the commercial register or the BULSTAT register;(d) (amended, SG No. 101/2006) the official number under Article 84 (3) of the Tax and Social-Insurance Procedure Code for persons other than those under letters "a" - "c" and who are taxable persons under the Tax and Social-Insurance Procedure Code .2. " Third country" shall be a country outside the customs territory of the Community.3. "Third territory" shall be a territory which is part of the customs territory of the Community but is not part of the "territory of the Community" within the meaning of Item 3 of 1 of the supplementary provision of the Act.4. (New, SG No. 101/2006) VAT identification number under Article 94 (2) of the Act of the persons registered under the Act shall be the identification number under Item 1, in front of which the sign "BG" is written.(2) (New, SG No. 3/2007) Natural persons shall identify themselves for the purposes of the Act with the VAT identification number received upon registration thereof for all supplies carried out thereby constituting independent economic activity.(3) (New, SG No. 3/2007) Where a natural person receives a VAT identification number upon his registration in a capacity other than a sole trader and subsequently records himself as a sole trader, the said person shall be obliged to re-register and the VAT identification number for him shall be the number under "a" Item 1 of Paragraph 1, "b" respectively, received in the capacity of a sole trader, in front of which the sign "BG" shall be placed.(4) (New, SG No. 3/2007) Where a natural person receives a VAT identification number upon his registration in his capacity as a sole trader and subsequently deletes himself from the commercial register and the grounds for registration under the Act exist for him, the said person shall be obliged to re-register and the VAT identification number for him shall be the personal identification number, the personal number of a foreigner respectively, in front of which the sign "BG" shall be placed.(5) (New, SG No. 3/2007) Re-registration under Paragraphs 3 and 4 shall be made within 14 days from recording the relevant circumstance in the commercial register by filing a written notification to the relevant National Revenue Agency territorial directorate. The date of re-registration shall be the date of recording the relevant circumstance in the commercial register.TRANSITIONAL AND FINAL PROVISIONS 2. These Regulations shall supersede the Regulations of Application of the Value Added Tax Act (Promulgated State Gazette No. 19/1999, amended and supplemented, SG No. 55/1999, SG No. 9/2000, corrected, SG 15/2000, amended, Judgment No. 404/2001 of the Supreme Administrative Court - SG No. 12/2001, amended and supplemented, SG No. 15/2001, amended, SG No. 58/2001, amended and supplemented, SG No. 43/2002, SG No. 63/2002, SG No. 29/2003, SG No. 26/2004, SG No. 32/2005, SG No. 9/2006). 3. (1) (Amended, SG No. 101/2006) Registration certificates under Article 75 (1) shall be issued to the persons under 4 (1) of the transitional and final provisions of the Value Added Tax Act.(2) The certificates under Paragraph 1 shall be issued ex officio by the competent National Revenue Agency territorial directorate and shall be submitted to the persons within one month from entry into force of these Regulations.(3) Until submission of the certificate under Paragraph 2 the VAT identification number under Article 94 (2) of the Act shall be the identification number under Item 1 of 1 of the supplementary provision of these Regulations in front of which the sign "BG" shall be placed.(4) (New, SG No. 3/2007) For natural persons other than sole traders which upon their registration with the BULSTAT register have received uniform identification code other than the personal identification number, the VAT identification number shall be the personal identification number in front of which the sign "BG" shall be placed. 4. (1) For tax periods until entry into force of these Regulations the standard forms of documents provided in the superseded Regulations of Application of the Value Added Tax Act shall apply.(2) Together with the VAT return for the last tax period prior to the entry into force of these Regulations the persons shall submit on paper-based and magnetic data storage mediums the ledgers of account for the said last period.(3) The paper-based and magnetic data storage mediums submitted under Paragraph 2 shall comply with the format, parameters and requirements set out in Articles 91 and 92 and in appendix No. 10 of the superseded Regulations of Application of the Value Added Tax Act.(4) In the cases of 4 (5) of the transitional and final provisions of the Value Added Tax Act the registration inventory of the assets available at the registration date or the assets available at the re-registration date shall be submitted in a standard form - appendix No. 3, appendix No. 4 respectively of the superseded Regulations of Application of the Value Added Tax Act.(5) For the assets under Paragraph 4 the right to deduct credit for input tax occurs where the conditions of Chapter Twelve of the superseded Value Added Tax Act apply. 5. For presentation of the effected deduction of input tax claimable for the tax periods until entry into force of these Regulations a standard form appendix No. 5 of the superseded Regulations of Application of the Value Added Tax Act shall be completed and submitted. 6. The balance of the input tax claimable under 6 (3) of the transitional and final provisions of the Value Added Tax Act shall be stated in cell 80 of appendix No. 8 and in the statement on appendix № 5 of the superseded Regulations of Application of the Value Added Tax Act . 7. The sales report covering the tax periods prior to the entry into force of these Regulations shall be prepared in accordance with the provisions of Article 93 (5) of the superseded Regulations of Application of the Value Added Tax Act. 8. (1) Any registered person shall have the right to deduct the tax charged on the assets upon deregistration under Article 119 (3) of the superseded Value Added Tax Act , which are available at the date of said person's re-registration under the Value Added Tax Act .(2) The right under Paragraph 1 shall arise where the following conditions obtain simultaneously:1. available assets within the meaning of the Accountancy Act at the date of re-registration under the Value Added Tax Act have been charged upon the deregistration under Article 119 (3) of the superseded Value Added Tax Act;2. the tax charged upon the deregistration has been effectively paid or set off by the revenue authority;3. with the available assets under Item 1 the person has effected, is effecting or will effect taxable supplies within the meaning of Article 69 of the Act;4. the registration inventory in a standard form - appendix № 3, of the assets under Item 1 has been prepared at the date of re-registration and has been submitted not later than 7 days from the registration date;5. the assets under Item 1 have been acquired by the person up to 5 years, and for immovable things, up to 20 years before the date of re-registration under the Act.(3) In the cases where the asset under Paragraph 2 has been used, is used or will be used for both taxable and exempt supplies or for supplies or activities in respect of which no right to deduct credit for input tax exists, a right to deduct partial credit for input tax exists for the tax charged, calculated under the terms of Article 73 of the Act.(4) The right to deduct credit for input tax under Paragraph 1 shall be exercised in the tax period in which it occurred or in one of the following consecutive three tax periods and the relevant document under Article 71 of the Act shall be recorded in the purchases log for the relevant tax period.(5) The right to deduct credit for input tax under Paragraph 1 shall not occur and may not be exercised if the inventory under Item 4 of Paragraph 2 is submitted after the time limit under Item 4 of Paragraph 2. 9. (1) Where the time limit for submission of information under Article 120 (1) of the superseded Regulations of Application of the Value Added Tax Act expires after entry into force of these Regulations, commercial banks shall submit the information within 7 days from opening/closing of the "VAT account".(2) By the 14th day of the month following the month of entry into force of these Regulations, banks shall submit the information under Article 120 (2) and (3) of the superseded Regulations of Application of the Value Added Tax Act for the last calendar month preceding the month of entry into force of these Regulations. 10. Where an obligation for issuing a memorandum under the procedure of the superseded Regulations of Application of the Value Added Tax Act has arisen before entry into force of these Regulations and no such memorandum has been issued until entry into force of these Regulations, the person shall issue a memorandum, which shall satisfy the provisions of the Value Added Tax Act and these Regulations. 11. For goods and services received from other taxable persons for the direct benefit of the tourist and in respect of which the tour operator or travel agent have exercised their right to deduct credit for input tax before entry into force of these Regulations, no adjustment under the terms of Article 79 of the Value Added Tax Act shall be effected. 12. (Amended, SG No. 101/2006) (1) Notwithstanding 14 (1) of the transitional and final provisions of the Value Added Tax Act no tax shall be due upon execution of customs formalities regarding declaration of free circulation of goods where the following conditions obtain simultaneously:1. at the time of declaration the goods are under customs procedure and customs warehousing, inward processing under excise duty suspension arrangement, temporary importation with full or partial exemption from duty, or have the status of goods in temporary storage, or placed in a free zone or a free warehouse, and2. simultaneously with the declaration:(a) the goods leave the territory of the country to a third country or territory, or(b) the goods placed under temporary importation with full exemption from duty leave the territory of the country to the Member State from which they were exported (including the Republic of Romania) and the recipient is the person who exported them.(2) The provision of Article 16 (2) shall furthermore apply to the cases where goods have been temporarily exported from the territory of the country to the territory of a Member State or to the territory of the Republic of Romania before 31 December 2006 inclusive, for treatment, processing or repair under outward processing and said goods are imported again to the territory of the country after 1 January 2007 inclusive. 13. (New, SG No. 101/2006) The factor under Article 73 (5) of the Act for the previous 2006 shall be calculated according to the formula set out in Article 68 of the superseded regulations for the application of the Value Added Tax Act on the basis of all supplies effected in 2006. In determining the type of supplies the tax arrangement of the supplies at the date of occurrence of the chargeable event for them shall be taken into account. 14. (New, SG No. 101/2006) The numbering of the documents under Article 78, issued after 1 January 2007 inclusive, shall commence from "0000000001". 15. (New, SG No. 101/2006) (1) Introduction on the territory of the country of goods which were exported by 31 December 2006 inclusive from the territory of another Member State or from the territory of the Republic of Romania shall be considered importation of goods within the meaning of Article 16 of the Act.(2) In the cases of Paragraph 1 no intra-Community acquisition of goods shall exist. 16. (New, SG No. 101/2006) (1) No tax shall be charged on intra- Community acquisition of goods where the following conditions obtain simultaneously:1. the right of ownership over the goods is passed after 1 January 2007 inclusive;2. in respect of the goods a tax has been paid or charged upon importation of goods.(2) In the cases referred to in Paragraph 1, where the taxable amount of an intra-Community acquisition is higher than the taxable amount upon importation it shall be considered that an intra-Community acquisition of goods exists in respect of which the tax becomes chargeable under the Act and the difference shall be considered a taxable amount of the acquisition. 17. (New, SG No. 101/2006) (1) Where hoteliers, tour operators and travel agents have received advance payments by 31 December 2006 inclusive for supplies under chapter twenty one of the superseded Value Added Tax Act and in respect of such supplies after entry into force of the Act the provisions of Article 66 (2) or chapter sixteen of the Act apply, upon occurrence of a chargeable event the persons shall issue a tax document for the supplies in accordance with the procedures and time limits of the Act, stating:1. the total taxable amount for the supply formed in accordance with the Act;2. the amount of the rate of tax determined on the taxable amount under Item 1;3. the amount of the tax charged on advance payments by 31 December 2006 inclusive;4. the amount of the tax charged on advance payments after 1 January 2007 inclusive;5. the difference between the amount of the tax under Item 2 and the amount of the tax under Items 3 and 4.(2) In the cases referred to in Paragraph 1 the difference under Item 5 of Paragraph 1 shall be recorded in the sales log. 18. (New, SG No. 101/2006) The provisions of 9 of the transitional and final provisions of the Act shall furthermore apply to supply of goods under the terms of a financial lease contract in respect of which the tax procedure is changed upon entry into force of the Act from taxable to exempt supply or from exempt to taxable supply. For the instalments due after 1 January 2007 the tax procedure at the time of occurrence of the chargeable event under the Act shall apply. 19. (New, SG No. 101/2006) (1) Where an advance payment is received by 31 December 2006 inclusive, for a supply under chapter three of the Act and by 31 March 2007 the supplier has not obtained the documents certifying existence of circumstances under chapter four hereof, it shall be considered that the supply is taxable at a rate of 20 per cent.(2) In the cases referred to in Paragraph 1 a tax shall be charged on the supplier by issuing a memorandum under Article 117 (2) of the Act within 5 days, effective 31 March 2007.(3) Where the supplier obtains the required documents subsequently, said supplier shall correct the result of the application of Paragraph 2 in accordance with the terms of Article 39 (4) - (7) hereof. 20. (New, SG No. 101/2006) (1) Where an advance payment is received by 31 December 2006 inclusive for supply of goods or a service in respect of which the tax treatment is modified by the Act concerning the rate of tax, the place of transaction of the supply, equalisation of the supply to a taxable one under Article 69 (2) of the Act and the chargeable event for which occurs after said date, the supplier shall document the supply by issuing an invoice, stating the total taxable amount of the supply. The tax treatment at the date of occurrence of the chargeable event of the supply under the Act shall apply.(2) Where an advance payment is made by 31 December 2006 inclusive for supply of goods or a service the chargeable event for which occurs after said date and the tax on the supply is chargeable on the recipient under the terms of the Act and these Regulations, the recipient who is a registered person shall charge a tax on the total taxable amount of the supply, including the advance payment made.(3) Paragraph 2 shall not apply where a tax is charged on the advance payment under the repealed Value Added Tax Act. The provisions of the Act and these Regulations shall apply to the tax treatment of the supply, including any subsequent advance payments. 21. (New, SG No. 101/2006) These Regulations shall come into force on 1 January 2007.Regulations to Amend and Supplement the Regulationsfor Application of the Value Added Tax ActSG No. 16/20.02.2007, effective 1.01.2007TRANSITIONAL AND FINAL PROVISIONS 16. (1) The permits issued by the Minister of Finance under Article 58b of the repealed Value Added Tax Act shall survive for the term for which they were issued as permits under Article 166 of the Act. (2) Confirmations issued under the terms of Article 83 of the repealed Regulations for Application of the Value Added Tax Act shall survive in respect of the contracts for which they were issued. 17. These Regulations shall come into force on 1 January 2007 with the exception of з 11, which shall come into force on the date of promulgation of the Regulations in the State Gazette. - For more information visit www.solicitorbulgaria.com id: 339 Mon, 04 Aug 2008 07:04:24 +0000 http://web.solicitorbulgaria.com/index.php/bulgarian-regulations-for-application-of-the-value-added-tax-act http://web.solicitorbulgaria.com/index.php/bulgarian-regulations-for-application-of-the-value-added-tax-act http://web.solicitorbulgaria.com/static2//userfiles/Image/_articles/256/REGULATIONS_FOR_APPLICATION_OF_THE_VALUE_ADDED_TAX_ACT.jpg EUR http://web.solicitorbulgaria.com/index.php/bulgarian-regulations-for-application-of-the-value-added-tax-act legal 80 negotiable Bulgarian Value Added Tax Act, part 2 info@solicitorbulgaria.com (SolicitorBulgaria) Chapter ElevenDOCUMENTING SUPPLIESTax DocumentsArticle 112. (1) "Tax document," within the meaning given by this Act, shall be:1. the invoice;2. the advice to an invoice;3. the memorandum.(2) Tax documents can be issued manually or by automated mean.(3) In the event of theft, loss, damage or destruction of any tax documents, the registered person shall notify in writing the competent National Revenue Agency territorial directorate not later than 24 hours after learning of the relevant circumstance.Issuing InvoicesArticle 113. (1) Each taxable person who is a supplier shall be obligated to issue an invoice for a supply of goods or service effected thereby or upon receipt of an advance payment before effecting such a supply except in the cases where the supply is documented by a memorandum under Article 117 herein.(2) The invoice shall be issued at least in duplicate: one copy for the supplier and one copy for the recipient.(3) An invoice may not be issued:1. for any supplies in which the… For more information visit http://www.solicitorbulgaria.com id: 340 Chapter ElevenDOCUMENTING SUPPLIESTax DocumentsArticle 112. (1) "Tax document," within the meaning given by this Act, shall be:1. the invoice;2. the advice to an invoice;3. the memorandum.(2) Tax documents can be issued manually or by automated mean.(3) In the event of theft, loss, damage or destruction of any tax documents, the registered person shall notify in writing the competent National Revenue Agency territorial directorate not later than 24 hours after learning of the relevant circumstance.Issuing InvoicesArticle 113. (1) Each taxable person who is a supplier shall be obligated to issue an invoice for a supply of goods or service effected thereby or upon receipt of an advance payment before effecting such a supply except in the cases where the supply is documented by a memorandum under Article 117 herein.(2) The invoice shall be issued at least in duplicate: one copy for the supplier and one copy for the recipient.(3) An invoice may not be issued:1. for any supplies in which the recipient is a non-taxable natural person;2. for any supplies of financial services under Article 46 herein;3. for any supplies of insurance services under Article 47 herein;4. for sales of air tickets;5. upon supplies effected free of charge;6. for supplies of services under Chapter Eighteen herein.7. (new, SG No. 108/2006) for deliveries, performed by individuals not registered under this Act, other than sole proprietors, when for the deliveries made by them:a) a document is issued under the procedure of a special act, orb) a receipt about the paid amounts or a document under Article 9 from the Income Taxes on Natural Persons Act is issued, orc) the document issuance is not obligatory under the Income Taxes on Natural Persons Act. (4) The invoice shall mandatorily be issued not later than five days after the date of occurrence of the chargeable event for the supply, and in the cases of advance payment, not later than five days after the date of receipt of the payment.(5) Notwithstanding Paragraph (4), upon an intra-Community supply, including in the cases of advance payment, the invoice shall mandatorily be issued not later that the 15th day of the month following the month during which the chargeable event under Article 51 (1) herein occurred.(6) When issuing an invoice is not mandatory, it shall be issued upon the request of the supplier or of the recipient, with either party being obligated to render to the other party the cooperation necessary for the issuing.(7) The supplier may authorize in writing another person to issue invoices on behalf of the said supplier.(8) An invoice may not be issued in the cases referred to in Article 131 (1) herein.(9) Any taxable persons, who are not registered under this Act or are registered in pursuance of Article 99 and Article 100 (2) herein, shall not have the right to state the tax in the invoices issued thereby.(10) Where the registered person effects a taxable supply for which the said person has received an advance payment prior to the date of registration of the said person under this Act, the said person shall issue an invoice stating therein the full taxable amount of the supply.Requirements to InvoicesArticle 114. (1) An invoice shall mandatorily state:1. title of document;2. sequential ten-character number, containing only Arabic numerals, based on one or more series depending on the reporting needs of the taxable person, which identifies uniquely the invoice;3. date of issue;4. name and address of the supplier;5. supplier's identification number referred to in Article 94 (2) herein or, respectively, the number referred to in Article 84 of the Tax and Social-Insurance Procedure Code , where the supplier is a person not registered under this Act;6. forename, surname and signature of the drafter;7. name and address of the recipient of the supply.8. recipient's identification number referred to in Article 94 (2) herein or, respectively, the number referred to in Article 84 of the Tax and Social Insurance Procedure Code, where the recipient is a person not registered under this Act, identification number for VAT purposes, where the recipient is registered in another Member State, another number for identification of the person, where such a number is required according to the legislation of the State where the recipient is established;9. quantity and type of the goods, type of the service;10. date on which the chargeable event for the supply occurred, or date on which the payment was received;11. unit price net of the tax and the taxable amount of the supply, as well as any trade discounts and rebates allowed, unless included in the unit price;12. rate of the tax and, when the rate is zero, the grounds for application of the said rate, as well as the grounds for not charging tax;13. amount of tax;14. amount payable, if other than the sum of the taxable amount and of the tax;15. the circumstances which define the goods as a new means of transport: applicable to an intra-Community supply of new means of transport.(2) Where a person effects distance selling of goods, is registered for VAT purposes in another Member State, and the place of supply under the terms of distance selling is within the territory of that other Member State, in addition to the essential elements covered under Paragraph (1), the invoice shall mandatorily state:1. the person's identification number for VAT purposes issued by that other Member State;2. the rate of tax applicable to the supply in that other Member State;3. the amount of tax due on the supply.(3) When the registered person who is an intermediary in a triangular operation documents a supply of goods effected to the acquirer in the triangular operation, the invoice shall state "Article 28a (E) (3) [of the Sixth Council Directive] 77/388/EEC" as grounds for not charging tax.(4) Where the tax is chargeable from the recipient, the invoice shall not state the amount of tax and the rate of tax. In such case, the invoice shall expressly state that the tax is chargeable from the recipient, as well as the grounds for this.(5) The amount in the invoice may be stated in any currency, provided that the taxable amount and the amount of the tax are stated in Bulgarian leva complying with the requirements of Article 26 (6) herein.(6) Issued invoices may be dispatched on a paper-based medium or electronically. Invoices received electronically shall be accepted when the recipient has confirmed the receipt of the said invoices, provided that the authenticity of origin and the integrity of content are guaranteed.Debit and Credit AdvicesArticle 115. (1) Upon any change of the taxable amount of a supply or upon rescission of a supply on which an invoice has been issued, the supplier shall be obligated to issue an advice to the invoice.(2) The advice shall mandatorily be issued not later than five days after the occurrence of the relevant circumstance under Paragraph (1).(3) A debit advice shall be issued upon an increase in the taxable amount, and a credit advice shall be issued upon a decrease in the taxable amount or upon rescission of supplies.(4) In addition to the essential elements covered under Article 114 herein, an advice to the invoice shall mandatorily state:1. number and date of the invoice to which the advice is issued;2. grounds for issuing of the advice.(5) An advice shall be issued at least in duplicate: one copy for the supplier and one copy for the recipient.(6) Upon termination or rescission of a lease contract under Item 3 of Article 6 (2) herein, the supplier shall issue a credit advice on the difference between the taxable amount of the supply under Item 3 of Article 6 (2) herein and the amount which the said supplier is withholding pursuant to such contract, net of the tax under this Act.Adjustment of Invoices and AdvicesArticle 116. (1) No corrections and additions may be made in the invoices and the advices thereto. Any documents which have been erroneously drafted or corrected shall be cancelled and new documents shall be issued.(2) Any invoices and advices thereto, in which no tax is charged even though it should have been charged, shall likewise be deemed erroneously drafted documents.(3) Any invoices and advices thereto, in which tax is charged even though it should not have been charged, shall likewise be deemed erroneously drafted documents.(4) Where erroneously drafted documents or corrected documents are shown in the ledgers of accounts of the supplier or the recipient, a memorandum shall furthermore be drafted on the cancellation, with a copy for each of the parties, which shall state:1. the grounds for cancellation;2. number and date of the document which is being cancelled;3. number and date of the new document issued;4. signatures of the persons who drafted the memorandum for each of the parties.(5) All copies of the documents cancelled shall be kept with the issuer, and the said documents shall be accounted for by the supplier and the recipient according to a procedure established by the Regulations for Application of this Act.Issuing MemorandumsArticle 117. (1) A memorandum shall mandatorily be issued:1. (amended, SG No. 108/2006) in the cases referred to in Article 82 (2), (3), (4) and (5) and Article 84 herein: by the registered person who is a recipient of the supply;2. in the cases referred to in Article 57 herein: by the registered person who is an importer;3. in the cases referred to in Article 6 (3), Article 7 (4), Article 9 (3), Article 142 (1) and Article 144 (4) herein: by the registered person who is a supplier.4. (new, SG No. 108/2006) in the cases under Articles 161 and 163a - from the registered person - beneficiary under the delivery, when the supplier is a tax liable person that is not registered under the act.(2) A memorandum referred to in Paragraph (1) shall mandatorily state:1. number and date;2. (supplemented, SG No. 108/2006) name and identification number under Article 94, paragraph 2 of the person referred to in Paragraph (1);3. quantity and type of the goods or type of the service;4. date of occurrence of the chargeable event for the supply;5. taxable amount;6. rate of tax;7. grounds for charging of the tax by the person referred to in Paragraph (1);8. amount of tax.(3) (Amended, SG No. 108/2007) The memorandum shall be issued not later than 15 days after the date on which the tax became chargeable.(4) Upon any change of the taxable amount of a supply or upon rescission of a supply on which a memorandum has been issued, the person shall issue a new memorandum which shall mandatorily state:1. number and date of the initial memorandum issued on the supply;2. grounds for issuing the new memorandum;3. the increase/decrease in the taxable amount;4. the increase/decrease in the tax.(5) (Amended, SG No. 108/2007) The memorandum referred to in Paragraph (4) shall be issued not later than 15 days after the date on which the relevant circumstance under Paragraph (4) has occurred.Cash ReceiptsArticle 118. (1) Any person registered and any person not registered under this Act shall be obligated to register and report the supplies/sales effected thereby at a commercial outlet by means of issuing a fiscal cash receipt printed by a fiscal device, regardless of whether another tax document has been requested, and the recipient shall be obligated to receive the fiscal cash receipt and to keep it until he or she leaves the outlet.(2) The fiscal cash receipt (fiscal slip) shall be a paper document recording a sale/supply of goods or service at a commercial outlet which is paid for in cash, by cheque, by voucher, by bank credit or debit card, or by any other cash equivalents, issued using a commissioned fiscal device of an approved type, for which a registration certificate has been authenticated. The fiscal cash receipt (fiscal bill), issued by an Integrated Automated Commercial Activities Management System approved for the relevant commercial outlet, shall also be a fiscal cash receipt (fiscal slip).(3) The application of this Article, as well as the terms, procedure and manner for type approval, for type cancellation, for commissioning/ decommissioning, registration, reporting and service maintenance, expert examination and control of fiscal devices (electronic fiscal memory cash registers, fiscal printers and electronic fiscal memory systems for sale of liquid fuels) the technical and functional requirements for the said devices, the procedure and manner for issuing fiscal cash receipts and the minimum for issuing of fiscal cash receipts, as well as the minimum essential elements of fiscal cash receipts, shall be established by an ordinance of the Minister of Finance.(4) Upon operation of a fiscal device, the persons referred to in Paragraph (1) shall conclude a written contract for service maintenance and repair with service companies registered by the State Agency for Metrological and Technical Surveillance. Service maintenance during the warranty period shall be free of charge within the warranties assumed by the manufacturer.Sales ReportArticle 119. (1) Any supplier, who is a person registered under this Act, shall prepare a sales report on the supplies for which the issuing of an invoice or memorandum is not mandatory, which shall contain consolidated information on such supplies for the relevant tax period.(2) The sales report shall be prepared on the last day of the tax period at the latest.(3) Optionally, the person may prepare separate sales reports for each day of the tax period and/or for each of the commercial outlets thereof.(4) The content of the consolidated information referred to in Paragraph (1) shall be specified by the Regulations for Application of this Act.Sales or purchases Report under Special Arrangements for Taxing(Title supplemented, SG No. 108/2006) Article 120. (1) Any supplier, who is a person registered under this Act, shall prepare a sales report for every type of supply effected during the tax period for which the special arrangements for taxing under Chapters Sixteen, Seventeen and Nineteen herein are applicable, which, as a minimum, shall contain the following information:1. quantity and type of the goods for each particular supply, or type of the service;2. date on which the chargeable event for the supply occurred;3. description of the invoices issued on the supply, when issuing of such invoices is mandatory;4. the elements necessary for assessment of the taxable amount;5. taxable amount;6. rate of tax;7. amount of tax;(2) The sales report referred to in Paragraph (1) shall be prepared on the last day of the tax period at the latest.(3) The person registered under Article 152 herein shall prepare an electronic register on the services performed under Chapter Eighteen herein, which, as a minimum, shall contain the following information on each supply effected:1. name, address and electronic address of the customer;2. type and quantity of the electronically supplied service;3. date on which the chargeable event for the supply occurred;4. number and date of the invoice issued on the supply;5. taxable amount;6. rate of tax as applicable;7. amount of tax;8. mode of payment.(4) (New, SG No. 108/2006) For the delivery of the goods and services, for which the special procedure for taxation is applicable under chapter nineteen "a", where the suppliers are individuals, who are not tax liable persons, the recipient - the person registered under the present Act, shall draw up a report about the purchases made during the tax period, containing at least the following information:1. quality and type of the good or type of service - for each delivery;2. the date, on which the tax for the delivery has become executable;3. the purchase price - for each delivery;4. the tax rate;5. the tax amount.(5) (New, SG No. 108/2006) The report on the sales performed under paragraph 1 shall be drawn up not later than the last day of the tax period.Chapter TwelveOTHER OBLIGATIONSStorage of DocumentsArticle 121. (1) Any taxable person shall ensure the storage of the tax documents issued by or on behalf of the said person, as well as of all tax documents received thereby, for five years after the expiry of the prescription period for extinguishment of the public liability which such documents certify.(2) The authenticity of origin and the integrity of content of the tax documents, as well as the readability thereof, must be guaranteed during the entire period of storage.(3) Paragraphs (1) and (2) shall furthermore apply in respect of the sales reports referred to in Articles 119 and 120 herein, the registers referred to in Article 123 (2) and (3), as well as the customs declarations.Right of Access to Invoices Stored by Electronic Means in Another MemberStateArticle 122. When a taxable person stores invoices issued or received thereby by an electronic means, and when the place of storage is in another Member State, the said person shall be obligated to ensure the competent revenue authorities access by electronic means to the data stored. The revenue authorities shall have the right to download and use the invoices so stored for control purposes.AccountsArticle 123. (1) Each registered person shall keep detailed accounts sufficient for assessment of the liabilities thereof under this Act by the revenue authorities.(2) Each registered person shall be obligated to keep a register of goods under Items 8 to 10 of Article 7 (5) and Items 8 to 10 of Article 13 (4) herein.(3) Each taxable person shall keep a register of the goods transported thereto from another Member State by a person registered for VAT purposes in the said Member State, in connection with the supply of services involving assessment or work on movable things.(4) The form and the essential elements of the registers referred to in Paragraphs (2) and (3) shall be determined by the Regulations for Application of this Act.Chapter ThirteenDECLARATION AND REPORTINGLedgers of AccountArticle 124. (1) Persons registered under this Act shall mandatorily keep the following ledgers:1. a purchase day book;2. a sales day book.(2) (Amended, SG No. 108/2006) The registered person shall be obligated to show the tax documents issued by or on behalf of the said person, as well as the sales reports under Article 119 herein, in the sales day book for the tax period during which the said documents were issued.(3) (Amended, SG No. 108/2006) Notwithstanding Paragraph (2), the tax documents issued in connection with an intra-Community acquisition, including such on a payment received, shall be shown in the sales day book for the tax period during which the tax became chargeable according to Article 51 herein.(4) (Supplemented, SG No. 108/2006) The registered person shall be obligated to show tax the documents received thereby in the purchase day book not later than until the third tax period following the tax period during which the said documents were issued but not later than the last tax period under Article 72, paragraph 1.(5) Notwithstanding Paragraph (4), the registered person shall be obligated to show the credit advices received thereby in the purchase day book for the tax period during which the said advices were issued.(6) The type, content of and requirements for the ledgers covered under this Article, as well as the procedure and manner of showing documents therein, shall be determined by the Regulations for Application of this Act.(7) (New, SG No. 108/2006) The registered persons that during the calendar quarter have made intercommunity deliveries of new vehicles, the recipients of which are persons not registered for VAT purposes in other Member States, shall register the deliveries performed in the register for intercommunity deliveries of new vehicles.(8) (New, SG No. 108/2006) The type, contents and requirements to the register under paragraph 7 shall be determined by the Rules on the Implementation of the Act.Declaration of TaxArticle 125. (1) For every tax period, the registered person shall submit a VAT return, prepared on the basis of the ledgers of account covered under Article 124 herein, with the exception of the cases referred to in Article 157 herein.(2) A registered person, who has effected intra-Community supplies or supplies as an intermediary in a triangular operation for the tax period, shall submit a VIES return on the said supplies for the relevant tax period together with the VAT return referred to in Paragraph (1).(3) Together with the VAT return referred to in Paragraph (1), the registered person shall submit the ledgers of account covered under Article 124 herein for the relevant tax period.(4) A VAT return referred to in Paragraph (1) shall furthermore be submitted where there is no payable or refundable tax, as well as in the cases where the registered person has not effected or received any supplies or acquisitions or has effected any importation for the said tax period.(5) The returns referred to in Paragraphs (1) and (2) and the ledgers of account referred to in Paragraph (3) shall be submitted on or before the 14th day of the month following the tax period to which the said returns and ledgers refer.(6) The VIES return referred to in Paragraph (2) and the ledgers of account referred to in Paragraph (2) shall be submitted on a magnetic or optical data storage medium as well.(7) Alternatively, the returns referred to in Paragraphs (1) and (2) and the ledgers of account referred to in Paragraph (3) may be submitted electronically under the terms and according to the procedure established by the Tax and Social-Insurance Procedure Code . Where the return and the ledgers of account are submitted electronically, Paragraph (6) shall not apply.(8) The VAT return referred to in Paragraph (1) and the return referred to in Paragraph (2) shall be submitted in a standard form specified by the Regulations for Application of this Act.(9) (New, SG No. 108/2006) The register under Article 124, paragraph 7 shall be submitted on a magnetic or optical carrier by the 14th day of the month, following the respective calendar quarter.Corrections of Errors Made in DeclaringArticle 126. (1) Any errors made in returns submitted under Article 125 (1) or (2) herein as a result of documents not shown or shown incorrectly in the ledgers of account covered under Article 124 herein shall be corrected according to the procedure established in Paragraphs (2) and (3).(2) Any errors detected prior to the expiry of the time limit for submission of the VAT return shall be corrected by the person making the necessary corrections and submitting again the returns referred to in Article 125 (1) and (2) herein and the ledgers of account covered under Article 124 herein.(3) Beyond the cases referred to in Paragraph (2), errors shall be corrected by:1. the person making the necessary corrections in the tax period during which the error was detected and including the document that has not been shown in the relevant ledger of account for the same tax period: applicable to documents not shown in the ledgers of account covered under Article 124 herein;2. the person notifying in writing the competent revenue authority which shall take action to modify the liability of the person for the relevant tax period: applicable to documents shown incorrectly in the ledgers of account.PART SEVENSPECIFIC CASESChapter FourteenSPECIFIC CASES OF SUPPLIESSupply Effected by Person Acting in His Own Name and for Account ofAnotherArticle 127. (1) Where a taxable person (commission agent/mandatory) supplies goods or services in his own name and for the account of another, the person shall be presumed to have received and supplied the goods or the services.(2) In the cases under Paragraph (1), three supplies shall be effected:1. a supply between the commission agent/mandatary and the third party, for which the date of occurrence of the chargeable event for and the taxable amount of the supply shall be determined under the general rules of this Act;2. a supply between the principal/mandator and the commission agent/mandatary of the goods or the services subject to the supply referred to in Item 1; the taxable amount of such supply shall be equal to the taxable amount of the supply referred to in Item 1, and the date of occurrence of the chargeable event for such supply shall be determined under the general rules of this Act but may not be later than the date of occurrence of the chargeable event referred to in Item 1;3. a supply of service between the commission agent/mandatary and the principal/mandator; the taxable amount of such supply shall be the compensation of the commission agent/mandatary, which shall include the reimbursement for the expenses incurred thereby in connection with the supply, if so agreed; the date of occurrence of the chargeable event for such supply shall be determined under the general rules of this Act.(3) Where the commission agent/mandatary is a person not registered under this Act, for assessment of the taxable amount for the supply referred to in Item 2 of Paragraph (2), the agreed price for the supply referred to in Item 1 of Paragraph (2) shall be deemed to include the tax.(4) Where the taxable amount of the supply referred to in Item 4 of Article 6 (2) herein differs from the taxable amount referred to in Item 1 of Paragraph (2), grounds for modification of the taxable amount of the supply referred to in Item 4 of Article 6 (2) herein shall arise on the date of occurrence of the chargeable event for the supply referred to in Item 1 of Paragraph (2).Ancillary SupplyArticle 128. Where the principal supply is accompanied by another supply and the payment is determined as a total, it shall be deemed that there is only one principal supply.Warranty ServicesArticle 129. (1) The provision of goods by a manufacturer or a person authorized thereby for the purpose of replacement or elimination of defects under the terms of agreed warranty services, which is carried out for the account of the manufacturer, shall not be considered to be a supply.(2) The provision of a service for the elimination of defects under the terms of agreed warranty services shall not be considered to be a supply where the following conditions are simultaneously fulfilled:1. the service is performed by a person authorized to do so by the manufacturer;2. the manufacturer is not established within the territory of the country;3. the warranty services are for the account of the manufacturer.(3) The provision of goods and services for elimination of defects by a supplier, where the elimination of the defects is for the account of the said supplier in connection with amounts retains under Item 2 of Article 26 (4) herein, shall not be considered to be a supply.BarterArticle 130. (1) When there is a supply under which the consideration (in full or in part) is expressed in goods or services, it shall be considered that there are two counter supplies, with each of the suppliers being considered to be a seller of what the said supplier gives and buyer of what the said suppliers receives.(2) The chargeable event for both supplies referred to in Paragraph (1) shall occur on the date of occurrence of the chargeable event for whichever of the said supplies is the earlier.Supply of Goods or Services upon Public Auction under Tax andSocial-Insurance Procedure Code or under Code of Civil Procedure or Saleunder Registered Pledges Act Article 131. (1) In the cases of public auction according to the procedure established by the Tax and Social-Insurance Procedure Code or by the Code of Civil Procedure or upon a sale according to the procedure established by the Registered Pledges Act or by Article 60 of the Credit Institutions Act and where the debtor is a person registered under this Act, the public enforcement agent, the bailiff or the pledgee shall be obligated, within five days after receipt of the full price of the sale:1. to pay the tax payable under the sale by crediting the bank account of the competent National Revenue Agency territorial directorate whereat the debtor is registered under this Act;2. to prepare a document on the sale, as specified in the Regulations for Application of this Act, in triplicate: one copy for the public enforcement agent/bailiff/pledgee, one copy for the debtor, and one copy for the recipient (buyer);3. to provide the document referred to in Item 2 to the debtor and the recipient within three days after the issuing of the said document;4. to notify the competent National Revenue Agency territorial directorate whereat the debtor is registered under this Act of the document issued under Item 2 according to a procedure established by the Regulations for Application of this Act.(2) In the cases under Paragraph (1), the selling price shall be deemed to be inclusive of the tax, and the said tax shall be remitted (paid) by the recipient (buyer) to the public enforcement agent/bailiff/pledgee together with the selling price.(3) (Amended, SG No. 59/2007) Paragraph (1) shall not apply where the thing has been awarded to the execution creditor on a motion thereby in payment of the claim thereof according to the procedure established by the Tax and Social Insurance Procedure Code. (4) (Amended, SG No. 59/2007) In the cases under Paragraph (3), the taxable amount of the supply shall be the price of the thing determined according to the procedure established by Article 250 (3) or Article 254 (7) of the Tax and Social Insurance Procedure Code and the tax shall be deemed included in the price of the said thing.(5) (New, SG No. 113/2007) In case the competent court repeals the public auction or sale under Paragraph (1) the remitted tax on the auction/sale shall be refunded according to a procedure set out by the Regulations for Application of this Act. Chapter FifteenSPECIFIC CASES OF REGISTRATION AND DEREGISTRATIONCompulsory Registration as Result of TransformationArticle 132. (1) Registration under this Act shall be compulsory for any person who acquires goods and services from a registered person in pursuance of Article 10 (1) herein.(2) The registration referred to in Paragraph (1) shall be effected by submission of an application for registration within 14 days after the recording of the circumstance referred to in Article 10 (1) herein in the Commercial Register.(3) The date of registration in the cases referred to in Paragraph (1) shall be the date of recording of the circumstance referred to in Article 10 herein in the Commercial Register.(4) In the cases of registration under Paragraph (1), the registration inventory referred to in Item 3 of Article 74 (2) herein for the assets available (excluding the assets received in pursuance of Article 10 herein) shall be drawn up at the date of registration under Paragraph (3) and shall be submitted on or before the 14th day after that date.Registration of Non-Resident who Is Not Established within CountryArticle 133. (1) Any non-resident person, who has a fixed establishment within the territory of the country from which the said person carries out economic activity and who satisfies the conditions of this Act for compulsory registration or for optional registration, shall be registered through the agency of an accredited representative, with the exception of branches of non-residents which shall be registered according to the standard procedure.(2) Any non-resident person, who is not established within the territory of the country but effects taxable supplies whereof the place of transaction is within the territory of the country and who satisfies the conditions of this Act for compulsory registration or for optional registration, shall be registered through the agency of an accredited representative.(3) (Amended, SG No. 108/2007) Registration under Paragraphs (1) and (2) shall be effected according to the procedure established by Article 101 herein at the National Revenue Agency territorial directorate under Article 8 of the Tax Social-Insurance Procedure Code. (4) Upon dissolution of the person who is an accredited representative, or upon occurrence of other circumstances which lead to an impossibility for such person to fulfil the obligations thereof under this Act, the non-resident person shall be obligated to designate a new accredited representative within 14 days after the date of occurrence of the intervening circumstances.(5) Paragraphs (1) to (4) shall not apply to any non-resident persons supplying services under Chapter Eighteen herein.Termination of Registration (Deregistration) of Non-Residents Registeredunder This ActArticle 134. (1) The registration of a non-resident person registered in pursuance of Article 133 herein shall be terminated if the general conditions for deregistration under this Act are fulfilled.(2) Deregistration under Paragraph (1) shall be effected according to the procedure established by Article 109 herein.(3) Where the non-resident person fails to designate a new accredited representative within the time limit referred to in Article 133 (4) herein, the registration of the said person shall be terminated on the initiative of the revenue authority by issuing of a deregistration act.(4) In the cases referred to in Paragraph (3), the deregistration act shall not be delivered to the person, and the date of deregistration shall be the date of expiry of the time limit referred to in Article 133 (4) herein.(5) Upon deregistration under Paragraphs (1) and (3), the non-resident person shall be presumed to effect a supply under Article 111 herein.Accredited RepresentativeArticle 135. (1) (Amended, SG No. 108/2007) Only a natural person capable of performing juridical act with permanent address or permanently residing only in the country, or a local legal person which is not subject to liquidation proceeding or has not been adjudicated bankrupt and does not incur chargeable and unpaid tax liabilities and liabilities for social-insurance contributions collected by the National Revenue Agency may be an accredited representative of a non-resident person.(2) The accredited representative shall represent the non-resident person referred to in Article 133 herein in all tax legal relations of the said person which arise in pursuance of this Act.(3) The accredited representative shall incur solidary and unlimited liability for the obligations under this Act of the registered non-resident person.PART EIGHTSPECIAL TAXING ARRANGEMENTSChapter SixteenSERVICES TO TOURISTSSupply of Single Service to TouristsArticle 136. (1) The provision by a tour operator or a travel agent, acting in his own name, of goods or services in connection with the journey of a tourist, for the carrying out of which goods or services for the direct benefit of the tourist are used, shall be treated as a supply of a single service to tourists.(2) The goods and services referred to in Paragraph (1) directly benefiting the tourist shall be the goods and services which the tour operator or the travel agent has received from other taxable persons and has provided to the tourist without alteration.Place of Transaction of Single Service to TouristsArticle 137. The place of transaction of a single service to tourists shall be the place where the tour operator or the travel agent has established the economic activity thereof or has a fixed establishment from which the said operator or agent effects the transaction.Date of Occurrence of Chargeable Event and Chargeability of TaxArticle 138. (1) The date of occurrence of the chargeable event for the supply of a single service to tourists shall be the date on which the tourist benefits from the supply for the first time.(2) The tax on the supply of a single service to tourists shall become chargeable on the date of occurrence of the chargeable event referred to in Paragraph (1).Taxable Amount of Single Service to TouristsArticle 139. (1) The taxable amount of the supply of a single service to tourists shall be the margin which represents the difference, less the amount of the tax payable, between:1. the total amount, which the tour operator or travel agent has received or will receive from the customer or the third party for the supply, including any subsidies and investment grants directly linked to such supply, the taxes and fees, as well as the incidental expenses such as commission and insurance, charged by the supplier to the recipient but exclusive of any trade discounts allowed;2. the amount which has been paid or will be paid for supplies of goods and services received by the tour operator or the travel agent from other taxable persons for the direct benefit of the tourist, including the tax under this Act.(2) The taxable amount referred to in Paragraph (1) may not be a negative quantity.Zero-Rating upon Supply of Single Service to TouristsArticle 140. (1) The supply of a single service to tourists shall be liable to tax at the zero rate, if the supplies of goods and services are for the direct benefit of the tourist, shall have a place of transaction within the territory of third countries and territories.(2) Where only part of the supplies of goods and services referred to in Paragraph (1) which are for the direct benefit of the tourist have a place of transaction within the territory of third countries and territories, only the part of the said supplies corresponding to the supply of the single service to tourists shall be liable to tax at the zero rate.Credit for Input Tax to Tour Operator or Travel AgentArticle 141. The tour operator or the travel agent shall not have the right to deduct credit for input tax in respect of the supplies of goods and services received from other taxable persons for the direct benefit of the tourist.Charging Tax and Documenting Supply of Single Service to TouristsArticle 142. (1) The tax on the supply of a single service to tourists shall be charged by the issuing of a memorandum.(2) The supply of a single service to tourists shall be documented and reported according to a procedure established by the Regulations for Application of this Act.Chapter SeventeenSPECIAL ARRANGEMENTS FOR TAXING PRICE MARGINSupply of Second-Hand Goods, Works of Art, Collectors' Items andAntiquesArticle 143. (1) (Supplemented, SG No. 108/2006) The provisions in this Chapter shall apply to a supply effected by a taxable dealer of second-hand goods, works of art, collectors' items, antiques, supplied to the said dealer within the territory of the country (including imported) or from the territory of another Member State by:1. a non-taxable person;2. another taxable person as a subject of an exempt supply under Article 50 herein;3. another taxable person who is not registered under this Act;4. another taxable dealer applying the special arrangements for taxing the price margin.(2) The provision of Paragraph (1) shall not apply upon an intra-Community supply of new means of transport.(3) Taxable dealers shall have the right to apply the provisions of this Chapter also in respect of a supply of:1. works of art, collectors' items or antiques which they have imported;2. works of art supplied to them by their creators or by the successors in title of the said creators.(4) (Amended, SG No. 108/2006) The right of option under Paragraph (3) shall be exercised by means of submission of a notification to the competent National Revenue Agency territorial directorate.(5) Taxable dealers who have exercised a right of option under Paragraph (4) shall apply the special arrangements for taxing the margin for a supply covered under Paragraph (3) as from the first day of the month following the month of submission of the notification, and for a period not shorter than 24 months including the month following the month of submission of the notification.(6) After the lapse of the time period referred to in Paragraph (5), the taxable dealer may discontinue the application of the special arrangements for taxing the margin for supplies covered under Paragraph (3) by submitting a notification to the competent National Revenue Agency territorial directorate. The application of the special arrangements for taxing the margin shall be discontinued as from the month following the month of submission of the notification.(7) Notifications referred to in Paragraphs (4) and (6) shall be submitted in a standard form specified in the Regulations for Application of this Act.Place of Transaction, Chargeable Event and Chargeability of Tax onSupplies of Goods under Special Arrangements for Taxing MarginArticle 144. (1) The place of transaction of supplies covered under Article 143 herein shall be the place where the taxable dealer has the registered office or fixed establishment from which the said dealer effects such supplies.(2) The chargeable event for the supplies covered under Article 143 herein shall occur according to the general rules under this Act.(3) The tax on supplies covered under Article 143 herein shall become chargeable on the last day of the tax period during which the chargeable event occurred according to Paragraph (2).(4) The tax shall charged by the issuing of a memorandum according to a procedure and in a manner established by the Regulations for Application of this Act.Taxable AmountArticle 145. (1) The taxable amount of the supply of goods under this Chapter shall be the price margin which represents the difference, less the amount of the tax payable, between:1. the selling price, representing the total amount which the taxable dealer has received or will receive from the customer or the third party for the supply, including any subsidies and investment grants directly linked to such supply, the taxes and fees, as well as the incidental expenses on packing, transport, commissions and insurance, charged by the supplier to the recipient but exclusive of any trade discounts allowed;2. the amount which has been paid or will be paid for goods received by the persons under Article 143 (1) and (3) herein, including the tax under this Act, and where the goods have been imported, the taxable amount upon importation, including the tax under this Act.(2) The taxable amount referred to in Paragraph (1) may not be a negative quantity.Supply of Goods under Special Arrangements for Taxing Margin at ZeroRateArticle 146. The supply of goods under the special arrangements for taxing the margin shall be liable to tax at the zero rate where the conditions established by Article 28 herein are fulfilled in respect of the supply.Credit for Input TaxArticle 147. (1) The taxable dealer shall have the right to credit for input tax in respect of any goods and services acquired or imported thereby which the said dealer uses only for the effecting of supplies under this Chapter.(2) The total credit for input tax referred to in Paragraph (1) used for the year may not exceed the total amount of the tax charged by the dealer for supplies covered under Article 143 herein,(3) Where the credit for input tax used during the year exceeds the tax charged during the year, a tax to the amount of the excess shall be chargeable from the person.(4) The excess referred to in Paragraph (3) shall be declared in the VAT return for the last tax period of the year.(5) The taxable dealer shall not have the right to deduct credit for input tax in respect of any goods received or imported thereby to which the said dealer applies the special arrangements for taxing the margin.Documenting Supply of Goods under Special Arrangements for Taxing MarginArticle 148. The supply of goods under the special arrangements for taxing the margin shall be documented and reported according to a procedure established by the Regulations for Application of this Act.Taxable Turnover of Taxable Dealer from Supplies of Goods under SpecialArrangements for Taxing MarginArticle 149. The taxable turnover of a taxable dealer from supplies of goods under the special arrangements for taxing the margin shall be the sum total of the margins.Charging Tax on Goods in Stock upon Taxable Dealer's DeregistrationArticle 150. (1) The deregistration of the taxable dealer shall be effected according to the general conditions for deregistration of this Act.(2) Upon deregistration, the taxable dealer shall be liable for a tax on the goods in stock covered under this Chapter. The amount of the said tax shall be determined on the basis of the average margin achieved by the taxable dealer during the 12 months last preceding the deregistration date.(3) The procedure and manner for determining the average margin referred to in Paragraph (2) shall be established by the Regulations for Application of this Act.(4) Upon deregistration, the taxable dealer shall be liable for tax under Article 111 herein, with the exception of the tax on the goods in stock referred to in Paragraph (2).Right of OptionArticle 151. (1) A taxable dealer may apply the standard procedure under this Act for taxing the supply of second-hand goods, works of art, collectors' items and antiques.(2) The right referred to in Paragraph (1) shall be exercised by the person for each particular supply and, to this end, the invoice issued shall not state that the special arrangements under this Chapter are applied.(3) The taxable amount of the supply shall be determined according to the procedure established by Articles 26 and 27 herein and may not be lower than the taxable amount upon acquisition of the goods or lower than the taxable amount upon importation.(4) In the cases referred to in Paragraph (2), the right to credit for input tax in respect of the goods received or imported by the person to which the special arrangements for taxing the margin are not applied shall arise and shall be exercised during the tax period in which the tax on the subsequent supply of such goods has become chargeable.(5) The supplies referred to in Paragraph (2) shall be documents according to the standard procedure established by this Act.(6) Where the taxable dealer applies both the special arrangements for taxing the margin and the standard procedure for taxing the supplies, the said dealer shall be obligated to keep separate accounts for the supplies as specified by the Regulations for Application of this Act.Chapter EighteenTAXING SUPPLIES OF SERVICES SUPPLIED ELECTRONICALLY BY PERSONSWHO ARE NOT ESTABLISHED WITHIN COMMUNITYSpecial RegistrationArticle 152. (1) Any taxable person for which the following conditions are simultaneously fulfilled shall have the right to register under this Chapter:1. the said person effects supplies of electronically supplied services to recipients who are non-taxable persons who are established or have a permanent address, or usually reside in a Member State;2. the said person is not established within the territory of the Community;3. the said person is not obligated to register for VAT purposes on any other grounds within the territory of the country or within the territory of another Member State.(2) The right referred to in Paragraph (1) shall be exercised by the person submitting, by electronic means, an application for registration to the Sofia Territorial Directorate of the National Revenue Agency.(3) Together with the application referred to in Paragraph (1), the person shall provide the following information:1. name, mailing address, electronic addresses, including Internet sites;2. a national tax number, if any;3. a statement certifying that the person is not registered for VAT purposes in another Member State.(4) The person shall notify the territorial directorate referred to in Paragraph (2) by electronic means of any intervening changes in the information provided under Paragraph (3).(5) Within seven days after receipt of the application, the territorial directorate referred to in Paragraph (2) shall notify the person by electronic means of the registration effected according to the procedure established by this Chapter, of the identification number referred to in Article 94 (2) herein, and of the date of registration.(6) The first day of the month following the month of the notification referred to in Paragraph (5) shall be considered to be a date of registration.Termination of Special RegistrationArticle 153. (1) The registration referred to in Article 152 herein shall terminate on the initiative of the person where:1. the person terminates the activity thereof under this Chapter;2. the person no longer fulfils the conditions under Article 152 (1) herein.(2) For termination of the registration under Paragraph (1), the person shall submit an application for termination of registration by electronic means to the territorial directorate referred to in Article 152 (2) herein.(3) The registration under Article 152 herein may be terminated on the initiative of the revenue administration where:1. the administration ascertains that the activity of the person has been terminated, or2. the person does not fulfil the conditions under Article 152 (1) herein, or3. the person systematically fails to comply with the provisions of this Chapter.(4) In the cases covered under Paragraph (3), the territorial directorate referred to in Article 152 (2) shall notify the person that his registration has been terminated, indicating also the date of termination of registration.(5) In the cases covered under Paragraph (1), the registration shall terminate on the date of submission of the application referred to in Paragraph (2).(6) In the cases covered under Paragraph (3), the registration shall terminate on the date of the notification referred to in Paragraph (4).Place of Transaction of Supplies of Electronically Supplied ServicesArticle 154. The place of transaction of services supplied electronically by a registered person under Article 152 herein shall be the Member State in which the recipient under Item 1 of Article 152 (1) herein is established.Taxable Amount, Date of Occurrence of Chargeable Event and Chargeabilityof TaxArticle 155. The taxable amount, the date of occurrence of the chargeable event and the chargeability of tax on supplies of services under this Chapter shall be determined under the general rules of this Act.Rate of TaxArticle 156. The rate of tax on the supplies of electronically supplied services under this Chapter shall be the rate applicable in the Member State in which the recipient referred to in Item 1 of Article 152 (1) herein is established.Tax Period, Declaration and Remittance of TaxArticle 157. (1) The tax period for persons registered under this Chapter shall be three months and shall coincide with a calendar quarter.(2) A person registered under this Chapter shall submit a return completed in a standard form specified in the Regulations for Application of this Act for each tax period within 20 days after the end of the period, regardless of whether any supplies of electronically supplied services have been effected during the said period. The said return shall be submitted to the territorial directorate referred to in Article 152 (2) herein by electronic means.(3) The return shall state the identification number of the registered person, the total value, net of value added tax, of the supplies for each separate Member State, the total amount of tax for each Member State, the rate of tax applicable in the respective Member State and the total value of the tax payable for all Member States for the tax period.(4) The values covered under Paragraph (3) shall be stated in Euro and in Bulgarian leva, and Article 26 (6) herein shall apply to the translation.(5) The tax chargeable for the tax period shall be remitted by crediting the account of the territorial tax directorate referred to in Article 152 (2) herein within the time limit for submission of the return under Paragraph (2).Credit for Input Tax and Tax RefundArticle 158. (1) Persons registered under this Chapter shall not have the right to credit for input tax in respect of any supplies of goods and services received within the territory of the country and from importation.(2) Persons registered under this Chapter shall have the right to a refund of the tax paid within the territory of the country according to the procedure established by Item 2 of Article 81(1) herein.Documentation and Provision of InformationArticle 159. (1) Any person registered under this Chapter shall be obligated to keep an electronic register referred to in Article 120 (3) herein for the supplies of services effected under this Chapter in a manner enabling the tax administration of the Member States in which the recipients are established to determine whether the information stated in the return referred to in Article 158 (2) herein is full and accurate.(2) Upon request, the information from the electronic register must be provided by electronic means to the Bulgarian revenue administration or to the competent authorities of the Member States in which the recipients are established.(3) The information in the electronic register shall be stored for a period of not less than ten years reckoned from the end of the year during which the relevant supply was effected.Chapter NineteenINVESTMENT GOLDSupplies of Investment GoldArticle 160. (1) Supplies concerning investment gold shall be exempt where, for the purposes of this Act, the said supplies are:1. supplies of investment gold, including: supplies of investment gold represented by certificates for allocated or unallocated gold; gold traded on gold accounts, gold loans and swaps, involving the right of ownership or claim in respect to investment gold; supplies concerning investment gold involving futures and forward contracts leading to a transfer of the right of ownership or claim in respect of investment gold;2. services of agents who act in the name and for the account of another, in connection with supplies of investment gold.(2) Taxable persons, who produce investment gold or transform gold into investment gold, as well as taxable persons who normally supply gold for industrial purposes, shall be allowed a right of option for taxation of the supplies covered under Item 1 of Paragraph (1). Taxable persons who perform intermediation services in respect or supplies of investment gold shall be allowed a right of option for taxation of the supplies referred to in Item 2 of Paragraph (1) when the supply in connection with which the intermediation service was provided is taxable.(3) The right referred to in Paragraph (2) may be exercised where the following conditions are simultaneously fulfilled:1. a person registered under this Act is a recipient of the supplies;2. the invoice issued on the supply states that the tax is to be charged from the recipient.Chargeability of Tax from RecipientArticle 161. (1) The tax shall be charged from the recipient who is a person registered under this Act upon:1. supplies of gold material or semi-manufactured products of a purity of 325 thousandths or greater;2. supplies concerning investment gold where the right referred to in Article 160 herein has been exercised and the invoice issued by the supplier states that the tax is to be charged from the recipient.(2) The tax shall be charged by the issuing of a memorandum.Right to Credit for Input TaxArticle 162. (1) Although the subsequent supply concerning investment gold is exempt, registered persons shall have the right to credit for input tax in respect of:1. the tax charged from them according to the procedure established by Article 161 herein;2. the received supply or importation of gold other than investment gold which has then been transformed into investment gold by the person or for the account thereof;3. received services leading to a change of form, weight or purity of gold, including investment gold.(2) Although the subsequent supply concerning investment gold is exempt, registered persons who produce investment gold or transform gold into investment gold shall have the right to deduct credit for input tax in respect of the supplies or importation within the territory of the country of goods or services related to the production or transformation of such gold.DocumentingArticle 163. (1) The supplies concerning investment gold, as well as the supplies involving gold material or semi-manufactured products of a purity of 325 thousandths or greater, shall be documented by issuing of an invoice which, in addition to the essential elements covered under Article 114 herein, must also state:1. description of the gold sufficient for the identification thereof, as a minimum: form, weight, purity etc.;2. date and address of the physical delivery of the gold;3. name, address and Standard Public Registry Personal Number and/or type, number, issuer of an official identification document of the persons who prepared the document.(2) The invoices referred to in Paragraph (1) shall be stored for a period of ten years reckoned from the end of the year during which the relevant supply was effected.Chapter Nineteen "a"(New, SG No. 108/2006)DELIVERYDEDELIVERY OF GOODS AND SERVICES ACCORDING TO APPENDIX No 2 WITHA PLACE OF EXECUTION THE TERRITORY OF THE COUNTRY, WHERE TAX ISEXECUTABLE BY THE RECIPIENTTax event and executable taxArticle 163a. (New, SG No. 108/2006) (1) The tax event of the goods and services delivered, specified in appendix № 2, shall occur according to the general rules of the present Act.(2) The tax for the supplies under paragraph 1 shall be executable by the recipient - a person registered under this Act, regardless of whether the supplier is a tax liable person or not.(3) The tax for the supplies under paragraph 1 shall become executable according to the procedures of Article 25, paragraphs 5 and 6.Tax accruing by the recipientArticle 163b. (New, SG No. 108/2006) (1) Tax shall be accrued by the recipient via the issuance of:1. a protocol under Article 117, paragraph 2 within the deadline set in Article 117, paragraph 3 - when the supplier is a tax liable person.2. a general protocol of all supplies, for which tax has become executable in during respective tax period - when the suppliers are natural persons that are not liable for tax; the protocol shall be issued on the last day of the respective tax period.(2) The protocol under paragraph 1, sub-paragraph 2 must contain:1. a number and a date;2. the name and the identification number under Article 94, paragraph 2 of the person, who issues it;3. a tax period;4. a description of the goods and services;5. the total amount of the purchase prices of the goods and services under item 4 for the tax period;6. accrued tax for the period.Documenting the suppliesArticle 163c. (New, SG No. 108/2006) When the supplier is a tax liable person, the supplies of goods and services, specified in appendix № 2, shall be documented by the issuance of an invoice, in which "Article 163a, paragraph 2" shall be indicated as grounds for not accruing tax.Chapter TwentyINVESTMENT PROJECTSSpecial Arrangements for Charging Tax upon ImportationArticle 164. (1) Notwithstanding Article 56 herein, the tax upon importation of goods may be charged by the person registered under this Act if the said person holds a permission issued according to the procedure established by Article 166 herein and imports goods (with the exception of excisable goods) according to a list approved by the Minister of Finance.(2) The importer shall exercise the right thereof under Paragraph (1) by:1. declaring in the customs declaration as submitted that the importer will use this arrangement;2. declaring that at the time of effecting the importation the importer is a person registered under this Act and does not incur chargeable and unpaid tax liabilities and liabilities for social insurance contributions collected by the National Revenue Agency.(3) Where the importer has exercised the right thereof under Paragraph (1), the customs authorities shall admit the release of the goods without the tax being effectively remitted or secured.(4) The importer shall charge the tax referred to in Paragraph (1) according to the procedure established by Article 57 (3) herein.(5) The importer shall have the right to credit for input tax in respect of the tax charged under Paragraph (4) under the terms established by Articles 69 and 73 herein.Shortened 30-Day Period for Tax RefundArticle 165. Any person registered under this Act shall have the right to refund the tax referred to in Article 88 (3) herein within 30 days after submission of the VAT return where the conditions referred to in Article 92 (4) are fulfilled.Issuing PermissionArticle 166. (1) A permission to apply the special arrangements for charging tax upon importation and for refund of the tax within 30 days shall be issued to any person who simultaneously satisfies the following conditions:1. the person implements an investment project approved by the Minister of Finance;2. the person is registered under this Act;3. the person does not incur chargeable and unpaid tax liabilities and liabilities for social insurance contributions collected by the National Revenue Agency;4. (amended, SG No. 86/2006, No. 113/2007) the conditions for grant of minimum aids under Regulation (EC) No. 1998/2006 of the Commission on the Application of Articles 87 and 88 of the Treaty to de minimis aid exist.(2) The investment project shall be approved by the Minister of Finance where the following circumstances simultaneously exist:1. the time limit for implementation of the project does not exceed two years;2. the amount of investment exceeds BGN 10 million for a period not longer than two years;3. more than 50 new jobs are created;4. the person is capable of financing the project, as well as of constructing and maintaining facilities ensuring the implementation of the said project, such as:(a) agreements on credit and commercial loans;(b) financial lease contracts;(c) bank and other guarantees;(d) letters of commitment to finance the project by the equity owners;(e) own funds;(f) the projected cash inflows are true, correspond to market conditions and are sufficient to cover the investment and current costs of the project.(3) A permission shall be issued for a period of up to two years on the basis of a request in writing whereto the following documents shall be attached:1. designs, elaborations and plans for construction and maintenance of facilities and a business plan for economic stability and profitability of the investment project;2. an analysis of the financial position, confirmed by a registered auditor or a specialized audit enterprise within the meaning given by the Independent Financial Audit Act , in case the person has operated for more than one year; the full annual financial statements for the periods analysed shall be attached to the said analysis;3. documents certifying the capabilities to finance the project under Item 2 of Paragraph (2);4. a list of the goods which the person is to import in implementation of the investment project; the said list shall mandatorily contain information on the quantity, value, code under the Combined Nomenclature of the Republic of Bulgaria, and the number of the contract for the supply of the goods;5. certificates on the circumstances covered under Items 2 and 3 of Paragraph (1);6. (amended, SG No. 113/2007) a declaration by the persons of the amount of the received minimum aids, irrespective of their form and source, for the last three tax years; received minimum aids for the period shall not exceed the lev equivalent of EUR 200,000 at the official BGN/EUR exchange rate at the date of the permission; for undertakings carrying out road transport activity the total amount of the minimum aid shall be the lev equivalent of EUR 100,000 at the date of the permission; these thresholds shall apply irrespective of whether the aid is financed in full or in part with resources of the European Community.(4) (New, SG No. 113/2007) To determine the maximum admissible intensity of the aid introduced by a National Regional State Aid Map (OB, No. C 73 of 30 March 2007), the minimum aid under Item 6 of Paragraph (3) shall be added to another state aid received for the same investment project, approved by a decision of the European Commission or in respect of which Article 9 of the State Aids Act applies. (5) (Amended, SG No. 86/2006, renumbered from Paragraph 4, No. 113/2007) The Minister of Finance shall issue permission within one month after receipt of the request if the requirements covered under Paragraphs (1) and (2) are fulfilled. Where notification of the European Commission is required according to the State Aids Act and the Regulations for Application thereof, the permission shall be issued within one month after the date of the decision of the European Commission whereby the grant of the aid is authorized.(6) (New, SG No. 113/2007) The permission under Paragraph (5) shall not be issued where on receipt of the minimum aid under this Article the maximum admissible intensity of the aid fixed in the National Regional State Aid Map is exceeded.(7) (New, SG No. 113/2007) The permission under Paragraph (5) shall specify the amount of the minimum aid for the approved investment project.(8) (Renumbered from Paragraph 5, SG No. 113/2007) A permission shall be issued or refused by a written order of the Minister of Finance.(9) (Renumbered from Paragraph 6, amended SG No. 113/2007) Within six months after the issuing of the permission under Paragraph (5), it shall be permissible to issue a new permission on goods which are to be imported or acquired additionally in implementation of the investment project as already approved. Adjustments to a permission already issued shall be inadmissible.(10) (Renumbered from Paragraph 7, SG No. 113/2007) A refusal to issue a permission shall be appealable according to the procedure established by the Administrative Procedure Code. Withdrawal of PermissionArticle 167. (1) A permission issued shall be withdrawn in the following cases:1. where the person ceases to satisfy the conditions covered under Article 166 (1) herein;2. upon the lapse of the period referred to in Article 166 (3) herein.(2) Where the relevant competent authority ascertains that the conditions under Article 166 herein are not fulfilled, the said authority shall forthwith notify the Minister of Finance.(3) The permission shall be withdrawn by an order of the Minister of Finance, which shall be appealable according to the procedure established by the Administrative Procedure Code. (4) The Minister of Finance shall provide the customs administration with information on the permissions issued and revoked, as well as with the lists referred to in Item 4 of Article 166 (3) herein.Chapter Twenty-OneSPECIAL ARRANGEMENTS REGARDING NEW MEANS OF TRANSPORTSpecial Arrangements for Intra-Community Supply and Intra-CommunityAcquisition of New Means of TransportArticle 168. (1) Any person not registered under this Act, who effects an intra-Community acquisition of a new means of transport referred to in Article 13 (2) herein or effects an incidental intra-Community supply of a new means of transport referred to in Article 7 (2) herein, shall be obligated to declare the intra-Community acquisition or the incidental supply as effected within 14 days after the expiry of the tax period during which the tax on the acquisition or the supply became chargeable under Articles 63 or 51 herein.(2) Declaration shall be effected by the submission of a return at the National Revenue Agency territorial directorate whereat the person is registered or is subject to registration under the Tax and Social-Insurance Procedure Code. (3) The return referred to in Paragraph (2) shall be submitted in a standard form specified by the Regulations for Application of this Act.(4) The tax due on the intra-Community acquisition shall be remitted according to the procedure and within the time limits established by Article 91 herein.(5) In the cases of effecting of an intra-Community acquisition under Paragraph (1), credit for input tax paid on the acquired means of transport shall become refundable in respect of the person if the following conditions are fulfilled:1. the person:(a) holds an invoice satisfying the requirements of Article 114 herein: where the means of transport has been purchased within the territory of the country, or(b) holds a customs declaration: in the cases of importation, or(c) the person has submitted a return under Paragraph (2) on the intra-Community acquisition: in the cases of intra-Community acquisition under Paragraph (1);2. the tax on the intra-Community acquisition or on the importation has been remitted to Executive Budget Revenue according to the procedure and within the time limits established by Articles 90 and 91 herein.(6) The right to refund of the tax under Paragraph (5) shall be exercised by stating the amount of the input tax claimable in the return referred to in Paragraph (2).(7) The amount of the tax refundable under Paragraph (5) may not exceed the tax which would have been chargeable from the person if the supply was not liable to tax at the zero rate.(8) Where a natural person who is not a sole trader effects an incidental supply referred to in Paragraph (1), the said person shall issue a document which contains the essential elements covered under Items 3 to 15 of Article 114 (1) herein.PART NINEMISCELLANEOUS PROVISIONSChapter Twenty-TwoINFORMATIONPublic InformationArticle 169. (1) Public information shall be the information on the registration under this Act which includes:1. business name, identification number referred to in Article 84 of the Tax and Social-Insurance Procedure Code , identification number referred to in Article 94 (2) herein, and mailing address of the person;2. date of registration and termination of registration;3. date of posting of the circumstances referred to in Items 1 and 2.(2) The information covered under Paragraph (1) shall be accessible and shall be posted on the Internet site of the revenue administration.(3) The information covered under Paragraph (1) may alternatively be provided by the revenue administration upon a person's written request.(4) The circumstances covered under Paragraph (1) shall be presumed known to bona fide third parties as from the date of posting of the information under Item 3 of Paragraph (1).Exchange of Information with Customs AdministrationArticle 170. (1) The customs administration shall provide the revenue administration with information, by electronic means, on the accepted customs declarations and the received payments of tax upon importation within 14 days after the end of every calendar month.(2) Such information shall be supplied under terms and according to a procedure established by an order of the Minister of Finance.Exchange of Information with Tax Administrations of Other Member StatesArticle 171. (1) The revenue administration shall be free to exchange information relating to the levy of value added tax with the tax administrations of other Member States, provided that such information will be used only for assessment of the tax liabilities of persons and/or in the course of appealing the amount of such tax liabilities.(2) The information received according to the procedure established by Paragraph (1) from other Member States may be used as evidence for assessment of liabilities under this Act, as well as in administrative and court procedures.(3) Paragraphs (1) and (2) shall furthermore apply in the cases where the information is exchanged by electronic means.Chapter Twenty-ThreeAPPLICATION OF INTERNATIONAL TREATIES AND REFUND OF TAX TO PERSONS NOTESTABLISHED WITHIN TERRITORY OF COUNTRYImportation Exempted by Virtue of International Treaties and Importationof Goods by Armed Forces of Other StatesArticle 172. (1) Exemption from tax shall be granted in respect of importation of goods for which a law or an international treaty, ratified and promulgated according to the relevant procedure, provides for exemption of the importation from taxes, levies or other charges (payments, duties) having an effect equivalent to an indirect tax, including where such treaties are financed by resources of the executive budget or the municipal budgets or by loans guaranteed by the Government.(2) (Supplemented, SG No. 113/2007) Exemption from tax shall be granted in respect of importation of goods imported by the staff/headquarters of the North Atlantic Treaty Organisation or by the armed forces of other States which are parties to the North Atlantic Treaty for the use by such armed forces or by the civilian staff accompanying them, or for supplying their messes or canteens, where such forces take part in the common defence effort of the North Atlantic Treaty within the territory of the country.(3) The procedure for application of Paragraphs (1) and (2) shall be established by the Regulations for Application of this Act.Supplies Exempted by Virtue of International Treatiesand Supplies in Which Recipients Are Armed Forces of OtherStates or Institutions of European UnionArticle 173. (1) Any supplies, which are exempted from value added tax by virtue of international treaties, agreements, accords conventions or other such whereto the Republic of Bulgaria is a party, which are ratified and promulgated according to the relevant procedure, shall be liable to tax at the zero rate, including on the part of the supply which is financed by resources of the executive budget or the municipal budgets or by loans guaranteed by the Government.(2) For application of the zero rate, the supplier shall be obligated to request in writing an opinion as to the grounds for such exemption from the competent National Revenue Agency territorial directorate. Documents proving the grounds for application of the exemption, specified by the Regulations for Application of this Act, shall be attached to any such request.(3) The restrictions of the right to credit for input tax under Article 70 herein shall not apply in respect of goods or services which are used only for the effecting of supplies referred to in Paragraph (1).(4) The supplies of goods and services, in which the recipients are the persons referred to in Article 172 (2) herein and the institutions of the European Union, shall be liable to tax at the zero rate.(5) For application zero tax rate under Paragraph (4), the supplier shall be obligated to possess documents specified by the Regulations for Application of this Act.Refund of Tax to Diplomatic Missions, Consular Posts, Missions ofInternational Organizations and Members of Staff ThereofArticle 174. (1) The tax charged on supplies in which the following are recipients shall be refunded:1. diplomatic missions;2. consular posts;3. missions of international organizations;4. members of the staff of the recipients referred to in Items 1, 2 and 3.(2) The terms and the documents required for refund of the tax under Paragraph (1) shall be determined by an ordinance of the Minister of Foreign Affairs and the Minister of Finance.Chapter Twenty-FourPOWERS OF MINISTER OF FINANCEPowers of the Minister of FinanceArticle 175. (1) The Minister of Finance shall issue rules Regulations for Application of this Act.(2) The Minister of Finance shall issue the ordinances referred to in Article 81 (2), Article 118 (3) and Article 174 (2) herein.(3) The Minister of Finance may determine, where necessary, by an order:1. special arrangements for documenting and reporting certain types of supplies for which the application of the standard procedure presents practical difficulties;2. the information collected under this Act which is public;3. the information collected under this Act which may be provided to the tax administrations of other States;4. the list of coins which constitute investment gold;5. the procedure, manner and form for exchange of information with the persons not established within the territory of the Community for the purposes of levy of tax on the supplies of electronically supplied services.(4) The orders covered under Paragraph (3) shall be promulgated in the State Gazette.Chapter Twenty-FivePOWERS OF REVENUE AUTHORITIES AND PREVENTION OF TAX FRAUDRefusal to Register or Termination of Registration in Connection withTax ViolationsArticle 176. Any competent revenue authority may refuse to register or may terminate the registration of a person who:1. cannot be reached at the mailing address named thereby according to the procedure established by the Tax and Social-Insurance Procedure Code ;2. changes the mailing address thereof and does not provide notification according to the established procedure;3. fails systematically to fulfil the obligations thereof under this Act;4. incurs tax liabilities whereof the total value exceeds the value of the assets thereof less the liabilities thereof.Registration upon SecurityArticle 176a. (New, SG No. 108/2007) (1) The competent revenue authority shall refuse registration to a person having failed to provide, within the specified time period, security in cash, in government securities or in unconditional and irrevocable bank guarantee for a term of one year and on which data exist that one or more of its owners, managing directors, procurators, majority partners or shareholders:1. are or have been, at the time of occurrence of the liabilities, owners, procurators, majority partners or shareholders, members of managing or controlling bodies of persons with unsettled value added tax liabilities exceeding BGN 5,000, or2. have unsettled value added tax liabilities exceeding BGN 5,000 in the capacity as natural persons, or3. are persons against whom penal proceedings have been initiated or have been convicted for offenses against the tax system.(2) Paragraph (1) shall not apply to the persons subject to registration under Article 99 (1).(3) The competent revenue authority shall terminate the registration of a person registered under the terms of Article 132, which has failed to provide, within the specified time period, the security for a term of one year, where the transformation, confiscation or in-kind contribution is performed by a person with unsettled value added tax liabilities exceeding BGN 5,000.Security Requirements and AmountArticle 176b. (New, SG No. 108/2007) (1) The competent revenue authority shall require provision of the security by a written request which shall specify:1. the grounds for requiring the security;2. the amount of the security;3. the time period in which the person shall submit evidence of the provided security, which shall not be less than 7 days.(2) The amount of the security shall be equal to the sum total of unsettled liabilities in respect of which the security is required. In the cases under Item 3 of Article 176a (1) the amount of the security shall be BGN 250,000 where the amount of the liabilities is not established at the date the security is required.(3) The security may be released or reduced prior to expiry of the one year time period if after the registration of the person the grounds on the basis of which the amount of the required security is determined are removed or changed.(4) The revenue authority which has established existence of the grounds for release or reduction of the security under Paragraph (3) shall notify the bank that the security may be released or reduced up to a specific amount.Persons' Liability in Case of AbuseArticle 177. (1) Any registered person who is the recipient in a taxable supply shall be liable for the value added tax due and unremitted by another registered person insofar as the former person has exercised a right to deduct credit for input tax related directly or indirectly to the due and unremitted tax.(2) The liability referred to in Paragraph (1) shall be enforced where the registered person knew or was obligated to know that the tax will not be remitted, and this is proved by the auditing authority according to the procedure established by Articles 117 to 120 of the Tax and Social-Insurance Procedure Code. (3) For the purposes of Paragraph (2), the person shall be presumed to have been obligated to know where the following conditions are simultaneously fulfilled:1. the tax due under Paragraph (1) was not effectively effected as paid in as a net tax for a tax period by any of the previous suppliers under a taxable supply whereof the subject are the same goods or services, regardless of whether in the same, modified or processed form, and2. the taxable supply is simulated, circumvents the law, or is at a price which significantly departs from the market price.(4) The liability referred to in Paragraph (1) shall not be contingent on the obtaining of a specific benefit from the non-remittance of the tax due.(5) Any preceding supplier of the person who owes the unremitted tax shall also incur liability under the terms established by Paragraphs (2) and (3).(6) In the cases under Paragraphs (1) and (2), the liability shall be enforced in respect of the person who is the direct recipient of the supply on which the tax due has not been remitted, and where the collection fails, the liability may be enforced in respect of any succeeding recipient in the order of supplies.(7) Paragraph (6) shall apply, mutatis mutandis, in respect of the preceding suppliers as well.Chapter Twenty-SixCOERCIVE ADMINISTRATIVE MEASURES AND ADMINISTRATIVE PENALTY PROVISIONSArticle 178. Any taxable person under this Act who is obligated but fails to submit an application for registration or an application for termination of registration within the time limits established under this Act, shall be liable to a fine, applicable to natural persons who are not merchants, or by a pecuniary penalty, applicable to legal persons and sole traders, of BGN 500 or exceeding this amount but not exceeding BGN 5,000.Article 179. (Amended, SG No. 108/2007) Any person registered under this Act, who while obligated to do so, fails to submit a VAT return referred to in Article 125 (1) herein, a return referred to in Article 125 (2) herein, the ledgers of account referred to in Article 124 herein, a return referred to in Article 157 (2) herein, or fails to submit the said returns and ledgers in due time, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, of BGN 500 or exceeding this amount but not exceeding BGN 10,000.Article 180. (1) (Amended, SG No. 108/2007) Any registered person who, while obligated to do so, fails to charge tax within the time limits provided for in this Act, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, equivalent to the amount of the uncharged tax but not less than BGN 500.(2) Paragraph (1) shall furthermore apply where the person has failed to charge tax because the said person has failed to submit an application for registration and has not registered under this Act in due time.(3) (Amended, SG No. 108/2007) Upon a violation under Paragraph (1), where the registered person has charged the tax in the period following the period during which the tax should have been charged, the fine or the pecuniary penalty, as the case may be, shall amount to 25 per cent of the tax but not less than BGN 250.(4) (Amended, SG No. 108/2007) Upon a repeated violation under Paragraphs (1) and (2), the amount of the fine or the pecuniary penalty shall be equivalent to the uncharged tax but not less than BGN 5,000.Article 181. (1) (Amended, SG No. 108/2007) Any registered person, who fails to submit information from the ledgers of account or who submits information on a magnetic or optical data storage medium departing from the information stated in the ledgers of account, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, of BGN 500 or exceeding this amount but not exceeding BGN 10,000.(2) (Amended, SG No. 108/2007) Upon a repeated violation under Paragraph (1), the fine or the pecuniary penalty shall be BGN 1,000 or exceeding this amount but not exceeding BGN 20,000.Article 182. (1) (Amended, SG No. 108/2007) Any registered person, who fails to issue a tax document, or to show a tax document issued or received in the ledgers of account for the relevant tax period, which leads to an assessment of the tax in a smaller amount, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, in the amount of the smaller tax amount but not less than BGN 1,000.(2) (Amended, SG No. 108/2007) Upon a violation under Paragraph (1), where the registered person has issued or shown a tax document for the tax period following the tax period in which the said document should have been issued or shown, the fine or the pecuniary penalty, as the case may be, shall be in the amount of 25 per cent of the smaller tax amount but not less than BGN 250.Article 183. (1) (Amended, SG No. 108/2007) Any person, which is not registered under this Act and who issues a tax document stating therein tax, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, equivalent to the amount of tax stated in the document but not less than BGN 1,000.(2) (Amended, SG No. 108/2007) Upon a repeated violation under Paragraph (1) the amount of the fine or the pecuniary penalty shall be the double amount of the uncharged tax but not less than BGN 5,000.Article 184. (1) (Amended, SG No. 108/2007) Any person, who fails to submit a return referred to in Article 168 (2) herein or who fails to submit the said return in due time, shall be liable to a fine, applicable to natural persons who are not merchants, or to a pecuniary penalty, applicable to legal persons and sole traders, of BGN 1,000 or exceeding this amount but not exceeding BGN 10,000.(2) (Amended, SG No. 108/2007) Upon a repeated violation, the fine or the penalty under Paragraph (1), as the case may be, shall be BGN 5,000 or exceeding this amount but not exceeding BGN 20,000.Article 185. (1) Any person, who fails to issue a fiscal cash receipt (fiscal slip) or who breaches the procedure and manner for type approval, registration or commissioning/decommissioning, or reporting, or service maintenance of fiscal devices, shall be liable to a fine of BGN 100 or exceeding this amount but not exceeding BGN 500, applicable to natural persons who are not merchants, or to a pecuniary penalty of BGN 200 or exceeding this amount but not exceeding BGN 10,000, applicable to legal persons and sole traders.(2) In the cases under Paragraph (1), the natural person who is actually obligated to issue a fiscal cash receipt (fiscal slip) and has accepted payment without issuing such a receipt, shall be liable to a fine of BGN 100 or exceeding this amount but not exceeding BGN 500.(3) Upon a repeated violation under Paragraph (1), the fine shall be BGN 500 or exceeding this amount but not exceeding BGN 2,500, and the pecuniary penalty shall be BGN 500 or exceeding this amount but not exceeding BGN 20,000.(4) Any person, who fails to fulfil the obligation thereof to keep the fiscal cash receipt (fiscal slip) until he or she leaves the commercial outlet, shall be liable to a fine of BGN 5, which shall be collected on the spot, against a receipt.Article 186. (1) The coercive administrative measure of sealing an outlet for a period of up to one month, notwithstanding the fines or pecuniary penalties provided for, shall be imposed on any person who:1. fails to observe the procedure or manner for:(a) issuing the relevant document on sale (fiscal slip, cash receipt from a receipt book or a sales certifying mark), printed and issued according to the established procedure for supply/ sale;(b) commissioning or registration of fiscal devices;(c) daily reporting of sales turnovers, where this is mandatory;2. uses a re-designed or modified fiscal device.(2) In the cases under Item 2 of Paragraph (1), the re-designed or modified fiscal device shall be confiscated by the revenue authority and shall be destroyed. The expenses shall be for the account of the person.(3) The coercive administrative measure referred to in Paragraph (1) shall be applied by a reasoned order of the revenue authority or by an official empowered by the said authority.(4) Any order referred to in Paragraph (3) shall be appealable according to the procedure established by the Administrative Procedure Code. Article 187. (1) Upon application of the coercive administrative measure referred to in Article 186 (1) herein, the person shall furthermore be barred from the outlet or outlets, and the merchandise in stock at the said outlets and at the warehouses thereto appertaining shall be removed by the person or by a person authorized thereby. Such measure shall be applied in respect of the outlet or outlets where violations have been ascertained.(2) Where such removal involves substantial difficulties for the revenue authorities and/or significant expenses for the person, the authority who decreed the sealing may order that the goods at the outlet or outlets be left to the person for safekeeping. Such order shall not apply to any goods which are the subject of violation referred to in Item 2 of Article 186 (1) herein.(3) In the cases under Paragraph (1), where the person has failed to remove the goods within the prescribed time limit, the revenue authority shall remove the said goods, placing them in front of the outlet, without any obligation to guard the said goods, and shall not be held liable for their damage, waste or loss which shall be for the account of the person.(4) The coercive administrative measure shall be terminated by the authority who applied the said measure at a request of the person on whom the administrative sanction has been imposed and after the said person proves that the file or pecuniary penalty has been paid in full. The person shall be obligated to cooperate upon the unsealing.Article 188. The coercive administrative measure referred to in Article 186 (1) herein shall be subject to anticipatory enforcement under the terms established by the Administrative Procedure Code. Article 189. (1) Any taxpayer under Article 91 (1) to (3) herein, who fails to remit the chargeable tax in due time, shall be liable to a fine, applicable to natural persons who are not merchants, or by a pecuniary penalty, applicable to legal persons and sole traders, of BGN 500 or exceeding this amount but not exceeding BGN 2,000.(2) Upon a repeated violation under Paragraph (1), the fine or the pecuniary penalty shall be equivalent to the unremitted tax but not less than BGN 4,000.Article 190. (1) Any revenue authority, who fails to refund a tax within the time period as provided for, where the conditions for refund of the said tax under this Act are fulfilled, shall be liable to a fine of BGN 500 or exceeding this amount but not exceeding BGN 2,000.(2) Upon a repeated violation under Paragraph (1), the fine shall be BGN 1,000 or exceeding this amount but not exceeding BGN 4,000.Article 191. (1) Any customs authority, which, while obligated to do so, fails to charge tax under this Act, or who charges tax in a lower amount, or releases goods from customs control without payment of the tax due, shall be liable to a fine of BGN 500 or exceeding this amount but not exceeding BGN 2,000.(2) Upon a repeated violation under Paragraph (1), the fine shall be BGN 1,000 or exceeding this amount but not exceeding BGN 4,000.Article 192. Upon ascertainment of any violations covered under Article 185 herein, committed by manufacturers, importers or service maintenance providers of fiscal devices, the Chairperson of the State Agency for Metrological and Technical Surveillance or a person empowered thereby:1. issue mandatory prescriptions in connection with the powers vested therein;2. shall cancel the fiscal devices type approval or the approval of an Integrated Automated Commercial Activities Management System;3. shall terminate the registration of the service maintenance provider upon systematic violations of Article 185 herein.Article 193. (1) The ascertainment of violations of this Act and of the statutory instruments on the application thereof, the issuing, appeal and execution of penalty decrees shall follow the procedure established by the Administrative Violations and Sanctions Act. (2) The written statements on violations shall be drawn up by the revenue authorities, and the penalty decrees shall be issued by the Executive Director of the National Revenue Agency or by an official empowered thereby.SUPPLEMENTARY PROVISION 1. For the purposes of this Act:1. "Territory of the country" shall comprise the geographic territory of the Republic of Bulgaria, the continental shelf and the exclusive economic zone.2. (Amended, SG No. 108/2007) "Territory of a Member State" shall be the area of application of the Treaty establishing the European Community, as defined in respect of each Member State in Article 299 of the said Treaty, with(a) the following territories being excluded from the said territory:(aa) for the Federal Republic of Germany: the Island of Heligoland and the territory of Bтsingen;(bb) for the Kingdom of Spain: Ceuta, Melilla, and the Canary Islands;(cc) for the Republic of Italy: Livigno, Campione d'Italia, and the Italian waters of Lake Lugano;(dd) for the French Republic: the overseas departments;(ee) for the Hellenic Republic: (Mt Athos);(ff) for the Republic of Finland: Ahvenanmaa (the Oland Islands).(gg) (new, SG No. 108/2007) for the United Kingdom of Great Britain and Northern Ireland: the Anglo-Norman Islands;(b) the supplies originating in or intended for:(aa) the Principality of Monaco being treated for the purposes of this Act as supplies originating in or intended for the French Republic;(bb) the Isle of Man being treated for the purposes of this Act as supplies originating in or intended for the United Kingdom of Great Britain and Northern Ireland.(cc) (new, SG No. 108/2007) The sovereign base areas of the United Kingdom of Great Britain and Northern Ireland in Akrotiri and Dhekelia - for the purposes of this Act they shall be treated as supplies originating in or intended for Cyprus.3. "Community" and "territory of the Community" shall be the territory of the Member States.4. "Third territory" or "third country" shall be any territory other than the territory of the Member States.5. "New buildings" shall be any buildings:(a) which are in a state of completion "rough construction work" at the date on which the tax on the supply of the said buildings became chargeable, or(b) in respect of which the tax on the supply thereof became chargeable before the lapse of 60 months from the date on which a use permit was granted according to the procedure established by the Spatial Development Act. 6. (Amended, SG No. 108/2006) "Adjacent site" shall be the amount of the built up area in the meaning of the Spatial Development Act and the area around the built up area, determined on the base of a distance of 3 m from the external outlines of each of the surrounding walls on the first overground floor or the semi underground floor of the building, within the regulated land estate.7. "Activities or supplies effected by the State, the state bodies and the local bodies in their capacity as central or local government authorities" shall be such activities or supplies effected by a person created by virtue of a law, where:(a) such activities or supplies are effected in exercise of the powers vested therein arising from a statutory instrument and which may not be effected by a merchant, unless such duty is imposed thereon by a law;(b) a fee has been established by a statutory instrument.8. A supply effected "free of charge" shall be any supply effected without consideration or such in which the value of the benefit provided exceeds manifold the value of the benefit received.9. "Goods of negligible value" and "services of negligible value" shall be any goods or services whereof the open market value does not exceed BGN 30 and whereof the supply is not part of a series of supplies in which the recipient is one and the same person.10. "Fixed establishment" shall be a representative office, a branch, an office, a bureau, a studio, a plant, a workshop (factory), a retail shop, a wholesale storage facility, an after-sales service establishment, an assembly project, a construction site, a mine, quarry, prospecting drill, oil or gas well, a water spring or any other place of extraction of natural resources, a fixed place (whether owned, rented, or allocated for use) or a fixed base wherethrough a person carries out economic activity within the territory of a country, whether wholly or partly.11. "Person established within the territory of the country" shall be any person who has a registered office and address of the place of management within the territory of the country or who has a fixed establishment within the territory of the country.12. "Person established within the territory of the Community" shall be any person who has a registered office and an address of the place of management within the territory of the Community or who has a fixed establishment within the territory of the Community.13. (Amended SG No. 41/2007) "Electronic communications services" shall be electronic communications services within the meaning given by the Electronic Communications Act. Electronic communications services shall furthermore include a transfer or cession of a right to use the capacity for conveyance, emission, transmission or reception or the provision of access to global information networks.14. "Electronically supplied services" shall be:(a) providing personal presence on the Internet, delivery of digitized content on the Internet (website and webpage hosting), online and distance maintenance of programmes and computer equipment;(b) online accessing or downloading of software plus updates;(c) accessing or downloading of images, writing and information and granting access to databases by electronic means;(d) online accessing or downloading of music, films and games, including lotteries, games of chance and games giving cash prizes and merchandise awards, as well as of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events;(e) supply of distance teaching by electronic means.When the service provider and a customer thereof communicate by electronic mail, this does not imply by itself that the service provided is electronically supplied.15. (Amended, SG No. 113/2007) "Subsidies and investment grants directly linked to a supply" shall be such subsidies and investment grants whereof the allocation is directly dependent on the price of the goods or services provided. Subsidies and investment grants directly linked to a supply shall exclude any subsidies and investment grants intended solely for:(a) cover of losses;(b) financing of expenses, including the acquisition or liquidation of assets.16. "Open market value" shall be the price within the meaning given by Item 8 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code , determined according to the methods for determination of open market values within the meaning given by Item 10 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code.17. "New means of transport" shall be:(a) any vessels exceeding 7.5 metres in length (with the exception of such intended for the transport of persons or goods, for navigation, for the purpose of commercial, industrial or fishing activities, for rescue or assistance at sea), where one of the following conditions is fulfilled:(aa) the date of the chargeable event has occurred within three months after the date of their first entry into service, or(bb) the date of the chargeable event has occurred before they have sailed for more than 100 hours;(b) aircraft the take-off weight of which exceeds 1,550 kilograms, intended for the transport of persons or goods (with the exception of such intended for airlines operating on international routes), where one of the following conditions is fulfilled:(aa) the date of the chargeable event has occurred within three months after the date of their first entry into service, or(bb) the date of the chargeable event has occurred before they have flown for more than 40 hours;(c) motorized land vehicles the capacity of which exceeds 48 cubic centimetres or the power of which exceeds 7.2 kilowatts, intended for the transport of persons or goods, where one of the following conditions is fulfilled:(aa) the date of the chargeable event has occurred within six months after the date of their first entry into service, or(bb) the date of the chargeable event has occurred before they have travelled more than 6,000 kilometres.18. "Passenger car" shall be any automobile designed to seat no more than five persons (excluding the driver). Any light-duty cargo truck intended to carry goods or any passenger car with permanently in-built technical equipment for the purposes of the activities carried out by the registered person shall not be treated as passenger car.19. "Second-hand goods" shall be any used tangible movable property that is suitable for further use as it is or after repair, which can be used for the purpose for which it was made. The following shall not be second-hand goods:(a) works of art;(b) collectors' items;(c) antiques;(d) precious metals and precious stones in whatever form.20. "Works of art" shall be:(a) pictures, collages and similar decorative plaques, paintings and drawings, executed entirely by hand by the artist, other than plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas;(b) original engravings, prints and lithographs, being impressions produced in limited numbers directly in black and white or in colour of one or of several plates executed entirely by hand by the artist, irrespective of the process or of the material employed by him, but not including any mechanical or photomechanical process;(c) original sculptures and statuary, in any material, provided that they are executed entirely by the artist; sculpture casts the production of which is limited to eight copies and supervised by the artist or by artists authorized thereby;(d) tapestries and wall textiles made by hand from original designs provided by artists, provided that there are not more than eight copies of each;(e) individual pieces of ceramics executed entirely by the artist and signed thereby;(f) enamels on copper, executed entirely by hand, limited to eight copies bearing the signature of the artist or the seal of the studio, excluding articles of jewellery and goldsmiths' and silversmiths' wares;(g) photographs taken by the artist, printed by him or under his supervision, signed and numbered and limited to 30 copies, all sizes included.21. "Collectors' items" shall be any postage or revenue stamps, franked or if unfranked not being of or being intended for use as legal tender, as well any collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic interest.22. "Antiques" shall be any objects other than works of art or collectors' items, which are more than 100 years old.23. "Taxable dealer of second-hand goods, works of art, collectors' items and antiques" shall be a taxable person who, in the course of his economic activity, purchases or acquires or imports with a view to resale, second-hand goods, works of art, collectors' items or antiques, whether that taxable person is acting [for himself or] as a commission agent within the meaning given by the Commerce Code. 24. "Investment gold" shall be:(a) gold, in the form of a bar or a wafer of weights accepted by the bullion markets, and of a purity equal to or greater than 995 thousandths;(b) gold coins designated by an order of the Governor of the Bulgarian National Bank and the Minister of Finance, where the following conditions are simultaneously fulfilled:(aa) they are of a purity equal to or greater than 900 thousandths;(bb) they are minted after 1800;(cc) they are or have been legal tender in the country of origin;(dd) they are normally sold at a price which does not exceed the open market value of the gold contained in the coins by more than 80 per cent.25. "Standard software" shall be any software product recorded on a physical medium, which is intended for common use and which does not take account of the specifics in the activity of a concrete user.26. "Handling of goods in transit" shall be services for unloading, loading, reloading, stowage and securing of the goods, provision of containers, as well as other services provided directly in connection with the transport.27. "Taxable dealer of natural gas and electricity" shall be a taxable person whose economic activity is related to purchases of natural gas or electricity and subsequent resale of such products.28. (Amended, SG No. 108/2007) "Handling of a vessel" shall be all operations concerning the admission, stay and departure of a vessel performed by the port within the territory of the country.29. "Handling of an aircraft on international service" shall be the ground servicing of an aircraft within the meaning given by Item 18 of 3 of the Supplementary Provisions of the Civil Aviation Act , with the exception of the services for which stamp duty is payable under the Ordinance on Public-Transport Airport Charges and Air Navigation Charges in the Republic of Bulgaria (promulgated in the State Gazette No. 2 of 1999; amended in No. 15 of 2000, Nos. 9 and 62 of 2001, No. 19 of 2002, No. 16 of 2003, Nos. 32 and 71 of 2004, Nos. 15 and 96 of 2005, No. 22 of 2006).30. "Handling of railway rolling stock on international service" shall comprise the following operations: shunting for the purpose of moving wagons to and from the points of loading and unloading; stay of the wagon during loading and unloading; weighing of empty wagons by a wagon weighbridge prior to loading; weighing of loaded wagons by a wagon weighbridge; disinfection, elimination of harmful insects and rodents of wagons intended for loading of goods, where this requirement is according to the Bulgarian State Standard; maintenance of controlled temperature during loading and transport of goods, which require such controlled temperature; carrying out customs and other administrative formalities related to the carriage of goods intended for import and for export; providing or withdrawing wagons, inter alia sorting wagons from and for a rail ferry; switching of wagon wheel sets with different track gauges.31. "Repair" shall be the activity involving the incurrence of subsequent costs in connection with a specific asset which do not lead to an economic benefit in excess of the benefit from the initially estimated standard return on the said asset.32. "Improvement" shall be the activity involving the incurrence of subsequent costs in connection with a specific asset which lead to an economic benefit in excess of the benefit from the initially estimated standard return on the said asset.33. "Cash equivalents" shall be:(a) receipts for purchases;(b) gift vouchers or gift coupons;(c) metal or plastic tokens.34. "Connected persons" shall be the persons within the meaning given by Item 3 of 1 of the Supplementary Provisions of the Tax and Social-Insurance Procedure Code. 35. "Repeated violation" shall be any violation committed within one year after the entry into effect of a penalty decree whereby the offender was penalized for a violation of the same kind.36. "Free zone", "free warehouse", "goods in temporary storage", "customs procedure", "suspensive arrangement", "non-Community goods" shall be the terms within the meaning given by customs legislation.37. (Supplemented, SG No. 108/2006) "Tourist", "hotelier", "tour operator", "travel agent", "main tourist services" and "package tour" shall be the terms within the meaning given by Items 1, 3, 8, 10, 12 and 14 of 1 of the Supplementary Provision of the Tourism Act. 38. "Importer" shall be the person liable to pay the import duties, as well as the person who has received goods within the territory of the country from third countries or territories which form part of the customs territory of the Community.39. (Supplemented, SG No. 108/2007, No. 113/2007) "Excisable goods" shall be the goods covered under Items 1, 2 and 3 of Article 2 of the Excise Duties and Tax Warehouses Act except for natural gas supplied through transfer pipelines and electricity.40. "Fiscal device" shall be a device for registration and reporting of sales of goods or services by means of issuing of fiscal cash receipts and for storage of data on the registered turnovers in a fiscal memory.41. "Commercial outlet" shall be any place, premise or facility (for example: tables, stalls and other such) situated outdoors or under sheds, whereat or wherefrom sales of goods or services are effected, regardless of the fact that such premise or facility may concurrently serve for other purposes as well (for example: an office, a dwelling or other such), may be part of owned corporeal immovable (for example: a parking garage, a basement, a room or other such), or may be a manufacturing warehouse or a means of transport wherefrom sales are effected.42. "Systematic violations" shall be any violations committed within one year after the entry into effect of a penalty decree whereby the offender was penalized again for a violation of the same kind.43. "Work on goods" shall be treatment, processing or repair of goods.44. "VIES (Value Added Tax Information Exchange System) return" shall be a consolidated return used for the purposes of control and exchange of information among the Member States.45. (New, SG No. 108/2006) "Accommodation" means basic tourist services in the meaning of sub-paragraph 12 from the additional provision of the Tourism Act. 46. (New, SG No. 108/2006) "Waste production" is every activity as a result of which waste is generated.47. (New, SG No. 108/2006) "Waste processing" is any activity associated with the collection, storage, sorting and mechanical processing of waste without any changes to its chemical composition.48. (New, SG No. 108/2006) "Waste treatment" is any activity, which changes the properties or composition of waste, transforming it into recourses for the production of end products or into end products.49. (New, SG No. 108/2007) "Small vessel" is a vessel with the size set out in Article 34 (2) of the Merchant Shipping Code. 50. (New, SG No. 108/2007) "Large vessel" is a vessel with the size set out in Article 34 (3) of the Merchant Shipping Code. 51. (New, SG No. 108/2007) "Majority partner or shareholder" is a person holding more than 33 per cent of the participating interest or shares, as the case may be, in the company.52. (New, SG No. 108/2007) "Unsettled liabilities" are the established chargeable liabilities of the person except for the fully secured, rescheduled and deferred liabilities.53. (New, SG No. 108/2007) "Active implantable medical device" is a device within the meaning of Item 1 of 1 of the supplementary provisions of the Medical Devices Act. TRANSITIONAL AND FINAL PROVISIONS 2. This Act shall supersede the Value Added Tax Act (promulgated in the State Gazette No. 153 of 1998; corrected in No. 1 of 1999; amended in Nos. 44, 62, 64, 103 and 111 of 1999, Nos. 63, 78 and 102 of 2000, No. 109 of 2001, Nos. 28, 45 and 117 of 2002, Nos. 37, 42, 86 and 109 of 2003, Nos. 53, 70 and 108 of 2004, Nos. 28, 43, 76, 94, 95, 100, 103 and 105 of 2005, Nos. 30 and 54 of 2006), 3. (Effective 4.08.2006) (1) The Minister of Finance shall issue the Regulations for Application of this Act and the ordinances under this Act within three months after the promulgation of the said Act in the State Gazette.(2) The Regulations and the ordinances referred to in Paragraph (1) shall enter into force as from the day of entry into force of this Act. 4. (1) All persons registered under the Value Added Tax Act as hereby superseded at the date of entry into force of this Act shall be presumed registered under this Act as well. In such cases, the identification number referred to in Article 94 (2) herein and the registration certificate referred to in Article 104 herein shall be issued ex officio.(2) Any registration or deregistration procedures that have been initiated and have not been concluded at the date of entry into force of this Act shall be completed according to the procedure established by this Act.(3) Notwithstanding Paragraph (2), when grounds for termination of registration in respect to a registered person have arisen during the last tax period prior to the date of entry into force of this Act, such person may remain registered under this Act if the grounds for optional registration under this Act exist.(4) The tax charged on assets available in connection with termination of registration prior to the entry into force of this Act shall be remitted within 30 days after the date of termination of registration.(5) Where the time limit for submission of the registration inventory referred to in Article 68 or Article 70 of the Value Added Tax Act as hereby superseded expires after the entry into force of this Act, the said inventory shall be submitted within three days after the date of registration under the Value Added Tax Act as hereby superseded. 5. (1) The VAT return for the last tax period prior to the entry into force of this Act shall be submitted not later than the 14th day of the month following the month to which the said return refers, and all rights and obligations under this Act shall accrue in respect to the net tax (input tax claimable or output tax payable) stated therein.(2) The annual VAT return referred to in Article 101 (1) of the Value Added Tax Act as hereby superseded shall be submitted not later than the 15th day of April 2007, and the net tax stated therein shall not be included in the deduction procedure under this Act but the tax shall be remitted or recovered within three months after the submission of the said return. 6. (1) For registered persons in respect of whom the three-month deduction procedure for input tax claimable under the Value Added Tax Act as hereby superseded has been initiated and has not been concluded at the date of entry into force of this Act, the deduction procedure shall continue according to the procedure established by Article 92 (1) of this Act.(2) All nine-month deduction procedures for income tax payable under the Value Added Tax Act as hereby superseded which have not been completed at the date of entry into force of this Act shall be concluded at the last day of the month preceding the month of entry into force of this Act.(3) In the cases referred to in Paragraph (2), the balance of the input tax claimable shall be declared by the persons in the VAT returns for the last tax period prior to the entry into force of this Act, and the said balance shall be set off and refunded by the revenue authority within 45 days after the submission of the said VAT return.(4) Any balance of the input tax claimable under Item 4 of Article 77 (1) of the Value Added Tax Act as hereby superseded which has not been refunded at the date of entry into force of this Act shall be set off and refunded by the revenue authority within 45 days after the submission of the VAT return wherein the said balance is stated.(5) Any tax refundable in pursuance of Article 77 (2) of the Value Added Tax Act as hereby superseded which has not been refunded at the date of entry into force of this Act shall be set off and refunded by the revenue authority within the relevant time limits referred to in Article 77 (2) of the Value Added Tax Act as hereby superseded. 7. (1) Where an advance payment has been received in connection with an exempt supply within the meaning given by the Value Added Tax Act as hereby superseded, which is a taxable supply within the meaning given by Article 12 (1) (excluding zero-rated supplies) of this Act, and the chargeable event for which occurs after the entry into force of this Act, the registered person who is the supplier shall document the supply by issuing an invoice stating therein the full taxable amount for the said supply. The said supply shall be subject to the tax treatment effective at the date of the occurrence of the chargeable event for the supply under this Act.(2) Where an advance payment has been received in connection with a taxable supply within the meaning given by the Value Added Tax Act as hereby superseded, which is an exempt supply within the meaning given by this Act, and the chargeable event for which occurs after the entry into force of this Act, the registered person who is the supplier shall document the supply by cancelling the invoice issued on the advance payment and issuing a new invoice, stating therein the full taxable amount for the said supply. A memorandum under Article 116 (4) of this Act shall furthermore be issued on the said cancellation. The said supply shall be subject to the tax treatment effective at the date of occurrence of the chargeable event for the supply under this Act. 8. (1) Where the chargeable event for a supply has occurred prior to the entry into force of this Act and the tax document on the supply is to be issued after the entry into force of the said, the supply shall be documented by issuing an invoice under Article 114 of this Act, and upon the issuing the said invoice, the tax treatment effective at the date of occurrence of the chargeable event for such supply shall apply.(2) Where, after the entry of this Act into force, grounds arise for modification of the taxable amount of a supply which has been actually effected and documented prior to the entry into force of this Act, the taxable amount shall be modified by issuing a tax advice under Article 115 of this Act, and upon the issuing of the said advice, the tax treatment effective at the date of occurrence of the chargeable event for the supply as effected and documented shall apply. 9. (1) Where goods have actually been supplied under the terms of a financial lease contract prior to the date of entry into force of this Act, each subsequent payment (instalment) under such contract due after the entry into force of this Act shall be considered a separate supply for which the chargeable event shall occur on the earlier of the date of payment and the date on which the said payment became due.(2) Paragraph (1) shall apply only where the taxable person who is the supplier submits an inventory, which shall mandatorily contain the following information, to the National Revenue Agency territorial directorate whereat the said person is registered within one month after the entry into force of this Act:1. recipient under the contracts referred to in Paragraph (1);2. number and amount of instalments under each contract on which a tax document has been issued but which have not been received;3. number and amount of instalments under each contract for which the chargeable event referred to in Paragraph (1) will occur after the entry into force of this Act.(3) For any contracts which are not included in an inventory submitted according to the procedure established by Paragraph (2), the person shall be presumed to effect a supply under Item 3 of Article 6 (2) herein on the date of entry into force of this Act, whereof the taxable amount is equal to the sum total of the instalments due after the entry into force of this Act, net of tax due on the said instalments. 10. Where goods have actually been supplied by a principal/mandator to a commission agent/mandatary and the said goods have not been delivered by the commission agent/mandatary to a third party prior to the entry into force of this Act, the chargeable event for such supply of goods between the principal/mandator and the commission agent/mandatary shall be presumed to occur on the date of occurrence of the chargeable event for the supply of the goods to the third party. 11. The provision of Article 50 of this Act shall furthermore apply in cases of supplies of goods or services for which a right to deduct credit for input tax in pursuance of Article 65 (1) of the Value Added Tax Act as hereby superseded did not exist. 12. Any tax documents issued prior to the entry into force of this Act and complying with the requirements of the Value Added Tax Act as hereby superseded shall be deemed compliant with the requirements of this Act. 13. The right to deduct credit for input tax, which has accrue