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What is transfer tax?
Last update: 2007-12-20 05:15:18
What is transfer tax? “Transfer tax” - The sale of property is generally subject to transfer tax. Transfer tax is levied at a rate of 2% of the purchase price agreed between the parties or estimate according to the tax evaluation of the property, whichever is higher. Generally, the transferee has the legal obligation to pay the tax, unless the parties have agreed to share the tax. The tax should be paid on the day of execution of the notary deed. The payment is condition precedent for the registration of the transaction with the recordation office.
The following sales of real property are exempt from transfer tax: - the property is contributed to the share capital of a company by means of contribution inkind. In such a case the specific procedure provided for in the Bulgarian Commercial Act has to be observed and a notary deed should not be drafted
- the property is transferred between two companies pursuant to a merger, a de-merger or a partial business transfer
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