Tax Control in Bulgaria

The analysis of the specifics of taxation and tax control for different types of tax obligations is impossible without basic knowledge of the system of taxation and tax control implemented in the Republic of Bulgaria.

The purpose of this textbook is to give a practical orientation to the knowledge that undergraduate and master's degree students should acquire in the disciplines related to taxation and tax control. The authors of the textbook hope that this material will also enhance the knowledge of the professionals in the field of accounting, financial reporting, and tax control, by providing the correct terminology and up-to-date information on the applicable legal provisions. The textbook should stimulate the independent analysis of specific problems and illustrate with examples possible solutions of cases from the practice.

УНСС
София 1700
жк Студентски град Христо Ботев, ул. 8-ми декември 19
v.mitev@unwe.bg

Foreword
Structure and functions of the National Revenue Agency

• Introduction
• Establishment and development of the National revenue agency
• Status and functions of the National revenue agency
• Bodies of management and structure of the National revenue agency
• Managing board
• Executive director
• Territorial directors
• Structure of the National revenue agency
• Bodies of the agency. Obligations of the bodies and the employees of the agency
• Training and qualification of the staff. Liability of the agency
• Responsibility of the agency
• Exchange of information and cooperation
• Recommended further reading
• Key definitions
• Self-check questions
• Answers

Revenue process

• Essence of the revenue process. Main principles
• Competent bodies. Powers of the competent bodies
• Competent territorial directorate
• Powers of the revenue bodies
• Powers of the revenue bodies who conduct the function Fiscal control
• Powers of the public enforcement officials
• Liable persons. Rights of the liable persons
• Basic rules and definitions
• Correspondence address
• Serving of announcements (documents)
• Time limits (terms) in the revenue process
• Other special rules
• Evidence
• Written pieces of evidence
• Expertise
• Material evidences
• Tax and social security information
• Disclosure of tax and social security information
• Registration proceedings
• Register maintained by NRA
• Special registers
• Tax and social security account
• Declaring proceedings
• Establishment of obligations. Control proceedings
• Preliminary establishment
• Final establishment
• Control proceedings
• Checks
• Organization of an audit
• Audit on special occasions
• Appeal against an audit act
• Fiscal control
• Preliminary security measures in case of Fiscal control
• Collection of public receivables
• Securing of public receivables
• Public receivables, object to securing
• Security measures imposing
• Execution proceedings
• Recommended further reading
• Key definitions
• Self-check questions
• Answers

Corporate income tax control

• Tax liable entities and types of corporate taxes
• Corporate tax
• Establishing the tax financial result subject to corporate tax
• Thin capitalization rules
• Tax depreciation plan
• Loss carry forward
• Advance installments, declaring and payment of the corporate tax
• Taxes on expenses
• Representative expenses
• Social benefits provided in kind
• Expenses for the personal use of company’s assets
• Withholding tax and international taxation
• Dividends and liquidation quotas
• Other incomes of foreign entities subject to withholding tax
• Filing of tax returns and deadlines for payment of withholding tax
• International taxation
• Alternative corporate taxes
• Revenues of state or municipal enterprises
• Tax on gambling activities
• Commercial shipping
• Tax control on corporate taxes
• Tax control on the corporate tax due
• Revenue control over taxes on expenses
• Control over withholding taxes
• Administrative penalties and sanctions
• Recommended further reading
• Key definitions
• Self-check questions
• Answers

Personal income tax control

• Introduction
• Object of taxation. Liable persons
• Income from sources within the Republic of Bulgaria
• Taxable and nontaxable income
• Nontaxable incomes
• Types of taxes according to the Personal income tax act
• Basic regulations
• Total annual tax base. Tax reliefs
• Tax relief for children and tax relief for children with disabilities
• Tax relief for young families
• Tax relief for persons of reduced capacity for work
• Tax relief for personal contributions for voluntary social insurance
• Tax relief for personal social contributions related to retirement from work
• Tax relief for donations
• Tax relief for non-cash payments
• Tax relief for improvements and/or repairs of immovable property
• Control actions regarding tax reliefs application
• Formation of the total annual tax base
• Tax base for income from employment relationship
• Advance withholding of the tax by the employer
• Additional obligations of the employer
• Tax base for income from other economic activity
• Determining the amount of the taxable income
• Determining the amount of the tax base
• Specifics of taxation of income from activity as registered agricultural producers
• Payment of tax on income from other economic activity
• Taxation of income from rent and other similar incomes
• Taxation of income form transfer of rights or property
• Taxation of income from other sources
• Taxation of income from activity as a sole entrepreneur
• Specifics of the final tax
• Final tax on incomes acquired by non-local persons
• Recalculation of the final tax
• Final tax on incomes acquired by local and foreign persons
• Tax return submitting
• Obligation for tax return submitting
• Exemption from tax return submitting
• Non-taxable incomes declaring
• Annual business report submitting
• Deadlines for tax return submitting
• Specifics of control actions regarding the Personal income tax act
• Administrative penalties and sanctions
• Recommended further reading
• Key definitions and rates
• Self-check questions and cases
• Answers

VAT control

• Basic features of VAT
• Types and place of supplies
• Taxable event
• Tax base
• Exempt supplies
• Zero rated supplies
• Intra-community supplies and acquisitions
• VAT registration and deregistration
• Input VAT credit
• Full input VAT credit
• Proportionate input VAT credit
• Partial input VAT credit
• Special cases for the deduction of input VAT
• Exercising of the right to deduct input VAT credit
• Adjustments of deducted input VAT
• Tax documents
• Declaring and reporting
• VAT reimbursable is offset, deducted, or refunded as follows
• VAT control specifics
• VAT sanctions and penalties
• Recommended further reading
• Key definitions and rates
• Self-check questions and cases
• Answers

Local taxes and fees control

• Real estate tax
• Taxable persons and declaration
• Due dates, tax base and deadlines
• Tax credits and exemptions
• Vehicles tax
• Inheritance tax on immovable property
• Tax on acquisition of property by donation and by way of consideration
• Garbage fee
• General provisions in the LTFA related to garbage fee of real estate
• Methods for determining garbage fee and opportunities for optimization
• Patent tax
• Tourist tax
• Specifics of the tax control on local taxes and fees
• Penalties and sanctions under the LTFA
• Recommended further reading
• Key definitions and rates
• Self-check questions and cases
• Answers

Abbreviations