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The purchase and sale of real estate in the country lead to tax obligations related to declaration, payment of taxes, deregistration from the tax service after sale, etc. Questions arise not only for domestic individuals, but also for foreign ones.

When buying real estate, a tax is also payable for its acquisition, in an amount determined by the local administration, according to the location of the property. Here they respect the rules for local taxes and fees.

Questions often arises are what the tax consequences are, whether tax is due on the income from the sale of real estate, regardless of whether the person is local or foreign.

The answers for individuals are at the Law for taxes of incomes of physical persons.

If it is an amount for 1 real estate that is residential and 3 years have passed since its acquisition, then the income from its sale is tax-free. For up to two immovable properties, the law requires a 5-year period, so that the income from their sale shall be not taxed. For agricultural and forest properties, regardless of their number, 5 years should also have passed.

However, it should be taken into account the special hypothesis of real estate acquired by inheritance and will, the income from the sale of which is also tax-free. And in this line of thought, it should be mentioned that donated immovable properties are excluded from this rule and their realized sale will be subject to taxation.

Apart from the exceptions, in other cases, income from the sale of real estate is subject to declaration and taxation. This happens with the submission of the Annual tax declaration and payment of the amount for the calculated tax due by April 30 of the year following the year of sale. There is a special calculation mechanism that should be followed.

In cases of Spousal Property Community, each of the spouses should file an Annual tax declaration for their taxable income.


This article is informative and does not constitute legal advice on a specific case. The information is valid to 31-03-2023.

At the period of 1 February 2019 and until 31 May 2019, the commercial companies and the non-profit legal entities (Associations, Foundations) were obliged to file under their registration in the Commercial Register and the register of the non-profit legal entities in Bulgaria, data regarding their ultimate (actual) owners according to the requirements of the Law for the Measures against Money Laundering. Non-Profit Legal Entities like Associations, Foundations, re-registered after January 31, 2019 in Registry Agency, declare data on their actual owners, within 4 months as of the re-registration.

Nowadays, new incorporated company has 7 days to announce its beneficial owner.

Obligation to apply are companies in which: 1. A partner is another legal entity whose beneficial owners are natural persons, with at least 25 percent (25%) participation. or 2. When other legal entity executes control over the company. Control exists if this other legal entity holds more than half of the votes in the General Assembly or has the right to appoint more than half of the members of the Management body. There is no obligation to apply for ultimate owners sole owner companies, with the sole owner of the capital an individual, as evidenced by the company's registration already filed and visible into the Register . The application shall be filed in the Commercial Register and register of the non-profit legal entities, electronically or in paper form. The application may be filed by the representative of the Company or an authorized explicitly Attorney-at-law. The data for the ultimate owners are entered on the basis of a notarized declaration from the representatives of the Company and the non-profit legal entities according to a template model in accordance with Appendix No. 3 to Art. 38 of the Regulation on the Implementation of the Measures against Money Laundering Act. When the Company does not have a physical person holding at least 25% (twenty five percent) of the capital and does not meet and does not fulfill the condition of the legal definition of a ultimate owner, a contact person (individual) with permanent residence on the territory of Republic of Bulgaria should be registered, who gives explicit consent with an other notarized declaration, to be registered as such and to be responsible for the Company in front of the competent control authorities. The Application for that filing is created under form B7. The declaration has public character. If the legal entity has an obligation by law to file a declaration of ultimate owner/s, but has not do it at the term given, there is predicted penalty of between BGN 1 000 and BGN 10 000 and the penalty may be calculated every month until the completion of this obligation.

For a company “closure” of a trading company in Bulgaria, should be carried out "company liquidation procedure", clearly regulated in the Commercial Law of the Republic of Bulgaria, which regulates all the requirements for starting and performing of the liquidation.

Under the Accounting Act, enterprises are required to publish their annual financial statements, the consolidated financial statements and the annual reports adopted by the general meeting of the shareholders (or sole shareholder) or the shareholders as follows:

-by all traders within the meaning of the Commercial Act - till 30 of September for the previous year by means of an application for announcement in TRRNPLE to RA;

-of NPLE’S with public benefit status -till 30 of September for the previous year by means of an application for announcement in TRRNPLE to RA;

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