This document has been provided by the
International Center for Not-for-Profit Law (ICNL).

ICNL is the leading source for information on th e legal environment for civil society and public
participation. Since 1992, ICNL has served as a resource to civil society leaders, government
officials, and the donor community in over 90 countries.

Visit ICNL’s Online Library at
https://www.icnl.org/knowledge/library/index.php
for further resources and research from countries all over the world.

Disclaimers Content. The information provided herein is for general informational and educational purposes only. It is not intended and should not be
construed to constitute legal advice. The information contai ned herein may not be applicable in all situations and may not, after the date of
its presentation, even reflect the most current authority. Noth ing contained herein should be relied or acted upon without the benefit of legal
advice based upon the particular facts and circumstances pres ented, and nothing herein should be construed otherwise.
Translations. Translations by ICNL of any materials into other languages are intended solely as a convenience. Translation accuracy is not
guaranteed nor implied. If any questions arise related to the accuracy of a translation, please refer to the original language official version of
the document. Any discrepancies or differences created in the tr anslation are not binding and have no legal effect for compliance or
enforcement purposes.
Warranty and Limitation of Liability. Although ICNL uses reasonable efforts to include ac curate and up-to-date information herein, ICNL
makes no warranties or representations of any kind as to its a ccuracy, currency or completeness. You agree that access to and u se of this
document and the content thereof is at your own risk. ICNL discl aims all warranties of any kind, express or implied. Neither ICNL nor any
party involved in creating, producing or delivering this document shall be liable for any damages whatsoever arising out of access to, use of
or inability to use this document, or any e rrors or omissions in the content thereof.

LAW O CORPORATE ICOME TAXATIO
Effective from 01.01.2007
Prom. SG. 105/22 Dec 2006, amend. SG. 52/29 Jun 200 7, amend. SG. 108/19
Dec 2007, amend. SG. 110/21 Dec 2007, amend. SG. 32/25 Mar 2008, amend. SG. 69/5
Aug 2008, amend. SG. 106/12 Dec 2008, amend. SG. 32/28 Apr 2009, amend. SG. 35/12
May 2009, amend. SG. 95/1 Dec 2009
Part one.
GEERALITIES
Chapter one.
GEERAL PROVISIOS
Objects of taxation
Art. 1. This Law shall regulate the taxation of:
1. the profit of local legal entities;
2. the profit of those legal entities which are not traders, including the religious organizations,
this profit being derived from transactions under A rt. 1 of the Commercial Law, or from leasing
movable or immovable property;
3. (suppl. – SG 95/09, in force from 01.01.2010) foreign legal entities’ profit derived from a
location of business activity within the Republic of Bulgaria or from administration of property in su ch a
location of business activity;
4. local and foreign legal entities’ income specifi ed in this Law where the income originates
from a source within the Republic of Bulgaria;
5. those expenses which are specified in Part Four;
6. the activity of the organizers of gambling games ;
7. the income from transactions under Art. 1 of the Commercial Law, and the income from
leasing movable or immovable property to State5budg et enterprises;
8. the activity of vessel operation on the part of persons performing maritime commercial
navigation.
Taxable persons
Art. 2. (1) Taxable persons shall be the following ones:
1. local legal entities;
2. (suppl. 5 SG 95/09, in force from 01.01.2010) th ose foreign legal entities which carry out
business activities within the Republic of Bulgaria through a location of business activity, carry out
administration of property in such a location of business activity or receive income from a source wit hin
the Republic of Bulgaria;
3. sole proprietors – regarding the taxes withheld at the source, and the cases specified in the
Law on Taxes on the Income of Natural Persons;
4. natural persons5traders within the meaning of Ar t. 1, para. 3 of the Commercial Law – in the
cases specified in the Law on Taxes on the Income o f Natural Persons;
5. the employers and the assignors under management and supervision contracts – regarding the
tax on social expenses, provided for in Part Four.
(2) For the purposes of this Law the unincorporated companies and the insurance funds
established under Art. 8 of the Social Insurance Code shall be treated as legal entities.

(3) For the purposes of taxation of income from a source within the Republic of Bulgaria, any
foreign formation which is organisationally and eco nomically autonomous (such as a trust, a fund and
the like) which carries out business activities on its own or makes and manages investments and the
owner of the income is impossible to identify, shall be a taxable person.

Local legal entities
Art. 3. (1) Local legal entities shall be the follo wing ones:
1. legal entities established under Bulgarian law;
2. companies established under Regulation (ЕC) No. 2157/2001 of the Council, and cooperative
societies established under Regulation (ЕC) No. 143 5/2003 of the Council where they have their
registered office within the country and are entered in a Bulgarian register.
(2) Local legal entities shall be taxed with taxes under this Law on their profit and income from
all sources within the Republic of Bulgaria and abr oad.

Foreign legal entities
Art. 4. (1) Foreign legal entities shall be those w hich are not local ones.
(2) (amend. 5 SG 95/09, in force from 01.01.2010) F oreign legal entities shall be taxed with
taxes under this Law on their profit realized through a location of business activity within the Repub lic
of Bulgaria, or from administration of property in such a location of business activity, as well as on the
income specified in this Law from a source within t he Republic of Bulgaria.

Types of taxes
Art. 5. (1) Profits shall be taxed with corporate t ax.
(2) Local and foreign legal entities’ income specif ied in this Law shall be taxed with taxes
withheld at the source.
(3) The expenses specified in this Law shall be taxed with tax on expenses.
(4) Instead of corporate tax, alternative tax shall apply to:
1. the activity of organizing gambling games;
2. the income from transactions under Art. 1 of the Commercial Law, and the income from
leasing movable or immovable property to State5budg et enterprises;
3. the activity of vessel operation.

Determining the amount of tax
Art. 6. The amount of tax shall be determined by wa y of multiplying the basis of taxation by the
tax rate.
Tax returns
Art. 7. The standard forms of the tax returns and t he other documents under this Law shall be
approved by way of an Ordinance of the Minister of Finance and shall be promulgated in the State
Gazette.
Paying the taxes
Art. 8. (1) The taxes due under this Law by the tax able persons shall be paid to the Central
Budget.
(2) The taxes due shall be paid to the Central Budget by crediting the account of the territorial
directorate of the National Revenue Agency either b y registration of the taxable person or by the place
in which the taxable person must have registered.
(3) The taxes due shall be regarded as paid on the date on which the amount enters the Central
Budget as an amount credited to the account of the respective territorial directorate of the National

Revenue Agency.
Interest on delayed payment
Art. 9. As for those taxes which have not been paid in due time, including the advance
contributions, interest shall be due in accordance with the Law on Interest on Taxes, Fees and Other
Similar State Receivables.
Documentary grounds
Art. 10. (1) The accounting expenses shall be recog nized for tax purposes where they are
grounded on a primary accounting document within the meaning of the Accounting Law, this document
presenting fairly the business operation.
(2) The accounting expenses shall also be recognize d for tax purposes where a part of the
primary document’s information required under the Accounting Law is missing, provided that there are
documents available which certify the missing information.
(3) Apart from the cases under para. 2, the accounting expenses shall also be recognized where
the primary document is issued by a person that is not an establishment within the meaning of Art. 1,
para. 2 of the Accounting Law and a part of the pri mary document’s information required under the
Accounting Law is missing, provided that the docume nt presents fairly the business operation
documented.
(4) The taxable persons shall be obligated to get registered and to report the sales they have
made, as well as the services they have provided, b y way of issuing a fiscal cash5register slip from a
fiscal device in accordance with the procedure set forth in an Ordinance of the Minister of Finance,
except where the payment is made through the bank o r by way of a set5off. Where the issue of a fiscal
cash5register slip from a fiscal device is obligatory, the absence thereof forms grounds for the non5
recognition of the accounting expenses for tax purposes.
(5) As for the international air transport, the acc ounting expense shall be documentarily
grounded where it is documented by way of a primary accounting document and the boarding pass for
the respective flight. Where the primary accounting document (record) is issued by a person who has
performed the sale on behalf of and at the account of the carrier, the said person is assumed to be the
issuer of the document.
(6) (new – SG 110/07, in force from 01.01.2008) Doc umentary proof for the expenses under
Art. 204, Items 1 and 3, which have been levied an expenses tax, shall be deemed available also where
they have been documented only in a fiscal receipt from a fiscal device. The expenses under Art. 204,
Item 3, levied an expenses tax, shall be recognized for taxation purposes also in case of lack of a travel
list.
Expenses which a statutory instrument defines as ma ndatory
Art. 11. Those expenses which a statutory instrumen t defines as being mandatory shall be
recognized for tax purposes and shall not be taxed with tax on expenses, unless this Law provides
otherwise.
Chapter two.
SOURCES OF PROFIT AD ICOME
Profit and income from sources within the Republic of Bulgaria
Art. 12. (1) (amend. 5 SG 95/09, in force from 01.0 1.2010) Foreign legal entities’ profit
originating either from business activity performed through a certain location of business activity inside
the territory of the Republic of Bulgaria or from d isposal of the property of such a location of business

activity shall be income from a source within the country.
(2) The income from financial assets issued by loca l legal entities, the State and the
municipalities shall be income from a source within the country.
(3) The income originating from transactions in fin ancial assets under para. 2 shall be income
from a source within the country.
(4) The income from dividends and liquidation share s in local legal entities shall be income
from a source within the country.
(5) The following types of income assessed by local legal entities, local sole proprietors or
foreign legal entities and sole proprietors through a location of business activity or an establishmen t
within the country, or paid by local natural persons or foreign natural persons, having an establishme nt
within the country, in favour of foreign legal entities, shall be income from a source within the coun try:
1. interest, including interest comprised in financial leasing contributions;
2. income originating from rent or any other granti ng of the use of movable property;
3. author’s and licence remuneration;
4. remuneration for technical services;
5. remuneration under franchising contracts and fac toring contracts;
6. remuneration under contracts for management and supervision of a Bulgarian legal entity.
(6) (amend. – SG 110/07, in force from 01.01.2008) The income referred to in para. 5 assessed
to foreign legal entities through a location of bus iness activity of a local person or through an
establishment of local natural persons, the said location or establishment being outside the country, shall
not be income from a source within the country.
(7) The income originating from agriculture, forest ry, game husbandry and fish industry inside
the territory of the country shall be income from a source within the country.
(8) The income originating from immovable property or transactions therein, including the
common indivisible parts thereof and limited property rights thereupon, the immovable property being
located inside the territory of the country, shall be income from a source within the country.
(9) When determining the source of income under thi s Art. the place in which the income is
paid shall not be taken into consideration.

Chapter three.
ITERATIOAL TAXATIO
International treaties
Art. 13. In those cases in which an international t reaty ratified by the Republic of Bulgaria,
which has been promulgated and has taken effect, co ntains provisions that differ from the provisions of
this Law, it is the provisions of the respective international treaty that shall apply.

Tax input regarding tax paid abroad
Art. 14. (1) In those cases in which the provisions of an international treaty under Art. 13 do not
apply, the taxable persons shall be entitled to recognition of tax input in accordance with the condit ions
and the procedure set forth in this Law.
(2) When determining the corporate tax or the alter native taxes referred to in this Law, the
taxable persons shall be entitled to the recognition of tax input regarding any tax which is similar t o the
corporate one or has been levied instead of it and has been paid abroad.
(3) The taxable persons shall be entitled to the recognition of tax input for the tax levied abroad
on the gross amount of dividends, interest, author’ s and licence remuneration, remuneration for techni cal
services and rent.
(4) The tax input referred to in paras. 2 and 3 shall be determined separately per each State and

per each type of income and shall be limited to the amount of the Bulgarian tax on the said profit or
income.
Chapter four.
PREVETIO OF TAX EVASIO
Transactions involving related persons
Art. 15. (amend. 5 SG 95/09, in force from 01.01.20 10) Where related persons perform their
commercial and financial relationships under conditions influencing the amount of the taxable basis,
these conditions differing from those between unrelated persons, the taxable basis shall be determined
and taxed under those conditions which would be pre sent for unrelated persons.

Tax evasion
Art. 16. (1) (amend. 5 SG 95/09, in force from 01.0 1.2010) Where one or more transactions,
including those between unrelated persons, have been effected under conditions the fulfilment of which
brings about tax evasion, the taxable basis shall be determined without taking into consideration the said
transactions, or certain conditions thereof, or the legal form thereof, and what is taken into conside ration
shall be the taxable basis that would have been ach ieved if a customary transaction of the respective type
has taken place, at the market prices, this transaction being aimed at achieving the same economic res ult,
without bringing about tax evasion.
(2) The following shall also be regarded as tax evasion:
1. considerable excess of the quantities of materia ls and raw stuff used in manufacture or an
excess of other manufacturing expenses in compariso n with the usual ones used by the person in the
activity he/she carries out, providing that the excess is not due to objective reasons;
2. the contracts for interest5free loans or other g ratuitous granting of the use of tangible or
intangible assets;
3. receipt or provision of credits at an interest rate which differs from the market rate at the time
the transaction takes place, including the cases of interest5free loans or other gratuitous temporary
financial aid, and remission of credits or repayment of credits at one’s own account, these credits not
being connected with the activity;
4. payment of remuneration or compensation for serv ices that have not been provided.
(3) In those cases where a simulated transaction co vers another transaction, the tax liability
shall be determined under the conditions of the covert transaction.

Transfers connected with the location of the busine ss activity
Art. 17. This Chapter shall also apply to the trans fers between the location of business activities
and the other parts of the foreign person’s establi shment which are situated outside the territory of the
country, in accordance with the specificity of the location of business activity.

Part two.
CORPORATE TAX
Chapter five.
GEERAL PROVISIOS
Tax financial result
Art. 18. (1) (amend. – SG 110/07, in force from 01. 01.2008) Tax financial result shall be the
accounting financial result transformed in accordance with the procedure set forth in this Law.

(2) The positive tax financial result shall be the tax profit.
(3) The negative tax financial result shall be the tax loss.

Basis of taxation
Art. 19. The basis of taxation for determining the corporate tax shall be the tax profit.

Tax rate
Art. 20. The tax rate of the corporate tax shall be 10 percent.

Tax period
Art. 21. (1) The tax period for determining the cor porate tax shall be the calendar year, unless
this Law provides otherwise.
(2) As for the newly established taxable persons, the tax period thereof shall be the period from
the date they were established until the end of the year, unless this Law provides otherwise.

Chapter six.
GEERAL PROVISIOS REGARDIG THE TAX FIACIAL RESU LT
Determining the tax financial result
Art. 22. (amend. – SG 110/07, in force from 01.01.2 008) The tax financial result shall be
determined by way of transforming the accounting financial result in accordance with the procedure set
forth in this Law, considering:
1. the tax permanent differences;
2. the tax temporary differences;
3. (amend. 5 SG 95/09, in force from 01.01.2010) ot her amounts in cases provided for in this
law.
Tax permanent differences and the use thereof in th e transformation of the accounting
financial result
Art. 23. (1) Tax permanent differences shall be tho se accounting receipts or expenses which are
not recognized for tax purposes.
(2) When determining the tax financial result, if this Law provides that:
1. certain expenses (losses) are not recognized for tax purposes, the accounting financial result
for the year of accounting the expenses (losses) sh all be increased by the said expenses (losses), and the
subsequent years’ accounting financial results shal l not be transformed;
2. certain receipts (profits) are not recognized for tax purposes, the accounting financial result
for the year of accounting the receipts (profits) shall be decreased by the said receipts (profits), and the
subsequent years’ accounting financial results shal l not be transformed.

Tax temporary differences and the use thereof in th e transformation of the accounting
financial result
Art. 24. (1) Tax temporary differences arise where certain receipts or expenses are recognized
for tax purposes during a year which is not the year of their accounting.
(2) Tax temporary difference shall be:
1. certain expenses that have not been recognized f or tax purposes during the year of their
accounting, and shall be recognized during the subs equent years when the conditions for their
recognition under this Part are fulfilled;
2. certain receipts that have not been recognized for tax purposes during the year of their

accounting, and shall be recognized during the subsequent years when the conditions for their
recognition under this Part are fulfilled.
(3) Tax temporary differences also arise in the cases of transformation of companies and
cooperative societies in accordance with the procedure set forth in Chapter Nineteen.
(4) When determining the tax financial result, if this Law provides that:
1. certain expenses (losses), which are not recogni zed for tax purposes in the year of their
accounting, shall be recognized in the subsequent years when the conditions for their recognition under
this Part are fulfilled:
а) the accounting financial result for the year of accounting the said expenses (losses) shall be
increased by the said expenses (losses) – occurrenc e of a tax temporary difference;
b) the accounting financial result for the year of fulfilment of the conditions for their
recognition under this Part shall be decreased by the said expenses (losses) – reverse manifestation o f
the tax temporary difference;
2. certain receipts (profits), which are not recognized for tax purposes in the year of their
accounting, shall be recognized in the subsequent years when the conditions for their recognition under
this Part are fulfilled:
а) the accounting financial result for the year of accounting the said receipts (profits) shall be
decreased by the said receipts (profits) – occurrence of a tax temporary difference;
b) the accounting financial result for the year of fulfilment of the conditions for their
recognition under this Part shall be decreased by the said receipts (profits) – reverse manifestation of the
tax temporary difference.
Receipts and expenses recognized for tax purposes
Art. 25. When determining the tax financial result, if this Law provides that certain receipts
(expenses) or profits (losses) have been recognized for tax purposes in the year of their accounting,
neither the accounting financial result for the current year, nor the one for the subsequent years sha ll be
transformed therewith.
Chapter seven.
TAX PERMAET DIFFERECES
Expenses unrecognized for tax purposes
Art. 26. The following accounting expenses shall no t be recognized for tax purposes:
1. expenses that are not connected with the activity;
2. (suppl. 5 SG 95/09, in force from 01.01.2010) re ceipts that have originated in connection
with expenses that are unrecognized for tax purpose s under Art. 26, item 3, 4, 5, 8 and 10 up to the
amount of the unrecognized expenses;
3. expenses of the tax charged or the tax input used in accordance with the Law on Value
Added Tax in those cases where the expenses of the business operation relating to the value added tax
have not been recognized for tax purposes;
4. (amend. – SG 110/07, in force from 01.01.2008) expenses accounted by a supplier under the
Law on Value Added Tax in respect of a value added tax levied by him or by the revenue authority for a
completed delivery, except the tax levied in case o f gratuitous deliveries and deliveries in connection
with deregistration under the Law on Value Added Ta x; this Item shall not apply to expenses accounted
in result of a taxation credit correction under the Law on Value Added Tax;
5. (amend. – SG 110/07, in force from 01.01.2008) s ubsequent expenses accounted for in
connection with a receivable that has occurred as a result of the tax charged or the tax input used under
items 3, 4, 8 and 10;

6. expenses of fines, confiscations and other sanctions imposed in connection with violation of
statutory instruments, and interest on delayed paym ents for public liabilities or municipal ones;
7. expenses of donations except for those specified in Art. 31;
8. expenses of a tax which is subject to being withheld at the source and is at the account of the
payer of the income;
9. those expenses of salary in the commercial compa nies having over 50 percent of State or
municipal participation which exceed the expenses fixed in the statutory instruments;
10. (new – SG 110/07, in force from 01.01.2008) exp enses accounted during realization of
responsibility for due and not deposited value added tax in the cases of Art. 177 of the Law on Value
Added Tax;
11. (new – SG 110/07, in force from 01.01.2008) exp enses, representing hidden distribution of
revenue.
Receipts unrecognized for tax purposes
Art. 27. (1) The following accounting receipts shal l not be recognized for tax purposes:
1. (suppl. – SG 69/08, in force from 01.01.2009; am end. – SG 106/08, in force from
01.01.2009) receipts resulting from the distribution of dividends of local legal entities and of foreign
persons, who are local persons for taxation purpose s of a Member State of the European Union or of
another state – party to the Agreement on European Economic Area;
2. receipts that have originated in connection with expenses that are unrecognized for tax
purposes under Art. 26, up to the amount of the unrecognized expenses;
3. receipts originating from interest on public liabilities that have been unduly paid or collected,
as well as from interest on value added tax charged by State or municipal bodies where the said tax has
not been refunded in due time.
(2) Para. 1, item 1 shall not apply:
1. to receipts resulting from the distribution of d ividends of licensed companies having a
special investment objective under the Law on the Companies Having a Special Investment Objective;
2. in the cases of covert distribution of profit.

Unrecognized expenses of missing assets and waste o f assets
Art. 28. (1) The accounting expenses of missing fix ed and current assets shall not be recognized
for tax purposes, with the exception of the ones resulting from force majeure.
(2) The accounting expenses of missing material inv entories and waste thereof shall not be
recognized for tax purposes.
(3) Para. 2 shall not apply in those cases where the expenses are caused by:
1. force majeure;
2. technological waste or change in the physical an d chemical properties, the waste or change
being established by way of a statutory instrument or the company’s standards (if there is no such
statutory instrument), and providing that the amount thereof is in accordance with the usual one for the
respective activity;
3. an expiry of the term of validity under a statutory instrument or the company’s standards (if
there is no such statutory instrument), and providi ng that the amount thereof is in accordance with th e
usual one for the respective activity;
4. (new – SG 110/07, in force from 01.01.2008) defi cit of goods, resulting of the commercial
activity in sites, where the clients have direct physical access to the offered goods, amounting to 0, 25
percent of the amount of the net income from sales of the commercial site in question.
(4) The expenses of the tax referred to in Art. 79, para. 3 of the Law on Value Added Tax on
assets that are unrecognized ones under paras. 1 through 3 shall not be recognized for tax purposes.
(5) The subsequent accounting expenses accounted fo r in connection with a receivable that has

occurred as a result of missing assets or waste of assets that are unrecognized ones under paras. 1
through 4 shall not be recognized for tax purposes.

Unrecognized receipts originating in connection wit h missing assets or waste of assets
Art. 29. The accounting receipts that have originat ed in connection with missing assets or waste
of assets or a receivable connected therewith, shal l not be recognized for tax purposes up to the amou nt
of the unrecognized expenses referred to in Art. 28.

Recognition of a part of the non0distributable expe nses of not0for0profit legal entities
Art. 30. (1) The non5distributable expenses of not5 for5profit legal entities which have been
accounted for and comply with the activity subject to taxation with corporate tax shall not be recognized
for tax purposes.
(2) A part of the non5distributable expenses shall be recognized for tax purposes, this part being
equal to the product of the multiplication of the n on5distributable expenses by the ratio of the opera ting
receipts from the activity subject to taxation with corporate tax to all the receipts of the not5for5profit
legal entity.
Expenses of donations
Art. 31. (1) The accounting expenses of donation no t exceeding 10 percent of the positive
financial result (profit before taxation) shall be recognized for tax purposes in those cases where th e
donations have been made in favour of:
1. healthcare establishments and medical treatment establishments;
2. specialized institutions for the provision of social services under the Law on Social Support,
and the Social Support Agency, and the Social Suppo rt Fund with the Minister of Labour and Social
Policy;
3. (suppl. – SG 106/08, in force from 01.01.2009) specialized institutions for children under the
Law on Child Protection, and public establishments for raising children who are deprived of parent’s
care, under the Law on Public Education and homes f or medical and social services for children under
the Law on the Medical Establishments;
4. public nurseries, kindergartens, schools, higher schools and academies;
5. State5budget enterprises within the meaning of t he Accounting Law;
6. religions registered within the country;
7. specialized enterprises or cooperative societies of disabled persons, which are entered in the
Register referred to in Art. 29 of the Law on the I ntegration of disabled Persons, and the ones in fav our
of the disabled Persons Agency;
8. disabled persons, and technical relief devices for them;
9. (amend. 5 SG 35/09, in force from 12.05.2009) pe rsons who have suffered damage in
disastrous situations within the meaning of the Law on Protection in Disastrous Situations, or the
families thereof;
10. the Bulgarian Red Cross;
11. low5income persons;
12. disabled children or children who have no parents;
13. cultural institutions, or for the purpose of cultural, educational or scientific exchange under
an international treaty, the Republic of Bulgaria b eing a party thereto;
14. not5for5profit legal entities registered in the Central Register of not5for5profit legal entities
for the purpose of carrying out activities for the public benefit, with the exception of those organiz ations
which support culture within the meaning of the Law on Maecenasship;
15. (amend. – SG 32/09, in force from 01.01.2010) p upils and students in schools in a Member
State of the European Union, or in another state – party to the Agreement on the European Economic

Area for the scholarships they have been granted;
16. the Power Efficiency Fund;
17. communes for treatment of drug addicts, as well as in favour of drug addicts for the purpose
of their medical treatment;
18. (new – SG 106/08, in force from 01.01.2009) the United Nations Children’s Fund
(UNICEF).
(2) (suppl. 5 SG 95/09, in force from 01.01.2010) The accounting expenses of donations in
favour of the "Fund for Treatment of Children" Cent re, “Assisted Reproduction Fund” and
“Transplantation Fund” Centre, amounting to up to 50 percent of the profit before taxation shall be
recognized for tax purposes.
(3) The aid provided freely under the conditions and in accordance with the procedure set forth
in the Law on Maecenasship amounting to up to 15 pe rcent of the profit before taxation shall be
recognized for tax purposes.
(4) The expenses of donations of computers and their peripheral devices manufactured within
one year prior to the date of donation, the latter being made in favour of Bulgarian schools, includin g
higher5education ones, shall be recognized for tax purposes.
(5) The total amount of donation expenses recognize d for tax purposes under paras. 1 through 4
may not exceed 65 percent of the accounting profit.
(6) The total expense of donation shall be unrecogn ized for tax purposes in those cases where
those managers who grant it or those managers who d ispose of it benefit from it, either directly or
indirectly, or evidence is present showing that the donation has not been received.
(7) (new – SG 32/09, in force from 01.01.2010) Para graphs 1 through 6 may also apply to
donations provided to persons identical to the ones specified in paras 1 through 4 or similar to them,
who are citizens of or established in another Membe r State of the European Union, or a state – party to
the Agreement on the European Economic Area, provid ed that the person who made the donation, has
an official legalized document, certifying the status of the person receiving the donation, issued or
verified by a competent authority of the respective foreign country, along with a translation in Bulgarian
language, carried out by a certified translator.
Expenses of founding a taxable person
Art. 32. (1) As for the taxable persons5founders, t he accounting expenses of founding a legal
entity shall not be recognized for tax purposes. Th e unrecognized expenses shall be recognized for tax
purposes when determining the tax financial result of a newly established legal entity for the year of its
establishment.
(2) The expenses referred to in para. 1 shall be re cognized as the founders’ expenses for tax
purposes if circumstances occur determining that no new legal entity shall be established. The expenses
shall be recognized for the year in which the circu mstances occur, providing that the requirements of
this law are fulfilled.
Tax treatment of income and expenditure, profit and loss, reported by a monitoring
associate in a jointly monitored enterprise (ew 0 SG 95/09, in force from 01.01.2010)
Art. 32a. (new5 SG 95/09, in force from 01.01.2010) Bok income and expenditures, profit and
loss, reported by a monitoring associate in a jointly monitored enterprise as a result of application of the
proportional consolidation method shall not be reco gnized, where the jointly monitored enterprise is a
taxable person.
Expenses of natural persons’ travelling and sojourn
Art. 33. (amend. – SG 110/07, in force from 01.01.2 007) (1) The following accounting
expenses for travelling and sojourn of natural persons shall be recognized for taxation purposes, wher e

the travelling and sojourn are connected with the activity of the taxable person:
1. the expenses for travelling and sojourn of natur al persons in employment relationship with
the taxable person or hired by him under non5employ ment relationship, including managers, members of
managing and control bodies of a taxable person;
2. the expenses incurred by a sole entrepreneur for travelling and sojourn of;
a) a natural person – owner of the undertaking of the sole entrepreneur, and
b) persons in employment relationship with the taxa ble person or hired by him under non5
employment relationship.
(2) The accounting expenses for travelling and sojourn of shareholders or partners shall not be
recognized for taxation purposes, where they travel and sojourn in their capacity of shareholders and
partners.

Chapter eight.
TAX TEMPORARY DIFFERECES
on0recognition of receipts and expenses of subsequ ent appraisals (reappraisals and
devaluations)
Art. 34. (1) (suppl. – SG 106/08, in force from 01. 01.2009) The receipts and expenses of
subsequent appraisals of assets and liabilities shall not be recognized for tax purposes in the year o f their
accounting. The income and expenses of subsequent a ssessments of receivables and expenses from
deletion of non5collectable receivables shall not be recognized for tax purposes in the year of their
accounting, provided that none of the circumstances referred to in Art. 37 has occurred in the same or
the preceding year.
(2) Para. 1 shall not apply to accounting receipts and expenses of subsequent appraisals of
pecuniary items in foreign currency at the fixing rate of the Bulgarian National Bank.

Recognition of receipts and expenses of subsequent appraisals (reappraisals and
devaluations)
Art. 35. (1) Those receipts and expenses of subsequ ent appraisals which are unrecognized for
tax purposes under Art. 34 shall be recognized for tax purposes in the year of the write5off of the
respective asset or liability.
(2) Where the value of the material inventories of a specific type written off during the current
year exceeds the value of the material inventories of the said type as at 31 December of the previous
year, the unrecognized receipts and expenses under Art. 34 of this type of material inventories in the
previous years shall be recognized for tax purposes in the current year.
(3) Paras. 1 and 2 shall not apply in the cases of missing assets or waste of assets that have not
been recognized for tax purposes in accordance with the procedure set forth in Art. 28.

Receipts and expenses of initial recognition and su bsequent appraisal of biological
products and agricultural (farming) products
Art. 36. (1) The excess of the receipts (profits) of initial recognition and subsequent appraisal of
biological products and agricultural (farming) prod ucts over the expenses accounted for in connection
with the said assets shall not be recognized for tax purposes in the year in which these receipts and
expenses are accounted for. The excess of the recei pts referred to in the first sentence shall be
recognized for tax purposes in the year of the write5off of the respective asset.
(2) The excess of the expenses, accounted for in co nnection with biological products and
agricultural (farming) products, over the receipts (profits) of initial recognition and subsequent app raisal
of the said assets shall not be recognized for tax purposes in the year in which these receipts and

expenses are accounted for. The excess of the expenses referred to in the first sentence shall be
recognized for tax purposes in the year of the write5off of the respective asset.
(3) The provisions of Arts. 34 and 35 shall not app ly to biological or agricultural products.

Recognition of receipts and expenses of subsequent appraisals of receivables
Art. 37. (suppl. – SG 106/08, in force from 01.01.2 009) Those receipts and expenses of
subsequent appraisals and deletion of receivables which are unrecognized under Art. 34 shall be
recognized for tax purposes in the year in which any of the following circumstances is present:
1. expiry of the period of limitation for the receivable, however, that should not be later than 5
years following the date on which the receivable be came executable;
2. transfer of the receivable for consideration;
3. the debtor’s bankruptcy proceedings have been su spended with an approved rehabilitation
plan, which provides for incomplete satisfaction of the taxable person; the unrecognized receipts and
expenses shall be recognized for tax purposes only with regard to the decrease of the receivable;
4. an effective decision of the Court lays down tha t the receivable or a part thereof is not due;
the unrecognized receipts and expenses shall be rec ognized for tax purposes only with regard to the
undue part of the receivable;
5. prior to the expiry of the period of limitation for the receivable, the latter has been
extinguished by virtue of law;
6. where the debtor is struck off and the receivable or a part thereof has remained unsatisfied,
the recognition is up to the amount of the unsatisfied part.

Provisions for liabilities
Art. 38. (1) The expenses of provisions for liabili ties shall not be recognized for tax purposes in
the year in which they are accounted for.
(2) The unrecognized expenses of provisions under p ara. 1 shall be recognized for tax purposes
in the year of extinguishment of the liability for which the provision is recognized, up to the amount of
the extinguished liability.
(3) (amend. – SG 110/07, in force from 01.01.2008) Where the taxation financial result is being
determined, the accounting financial result shall be reduced by the accounting income, respectively th e
amount of reduction of the accounting expenses, accounted in relation to a recognized provision.

Provisions which are not included in the tax amorti zable value of a tax amortizable asset
Art. 39. (1) When determining the tax financial res ult, the accounting financial result shall be
decreased by the extinguished liabilities connected with provisions which are not included in the tax
amortizable value of a tax amortizable asset under Art. 53, para. 1. The decrease under the first sentence
shall be made in the year in which the liability is extinguished.
(2) (amend. – SG 110/07, in force from 01.01.2008) Where the taxation financial result is being
determined, the accounting financial result shall be reduced by the accounting income, respectively th e
amount of reduction of the accounting expenses, accounted in relation to a recognized provision.

Specific procedure for the recognition of expenses of provisions for liabilities in the cases
of termination of the activity
Art. 40. (1) A taxable person that has applied Art. 38, para. 1 or Art. 53, para. 1, and totally
terminates his basic activity in the year of exting uishment of the liabilities for which the provision
unrecognized for tax purposes is charged, shall not apply the provisions of Art. 38, para. 2 or Art. 39,
para. 1 and shall be entitled to withholding or ref und of the overpaid corporate tax determined in
accordance with the procedure set forth in para. 2.
(2) The overpaid corporate tax shall be determined as the product of the multiplication of the

extinguished part of the liabilities for which the provision unrecognized for tax purposes is charged by
the tax rate of the corporate tax for the year of extinguishment of the liabilities. For the purposes of the
first sentence, the extinguished part of the liabilities may not exceed the aggregate of the tax finan cial
results for the 10 years preceding the year of termination of the activity.

Unused leave of absence
Art. 41. (1) The expenses regarding the accumulated unused (compensable) leave of absence as
at 31 December of the current year, as well as the expenses connected therewith regarding mandatory
social and health insurance shall not be recognized for tax purposes in the year in which they are
accounted for.
(2) The unrecognized expenses regarding the accumul ated unused (compensable) leave of
absence referred to in para. 1 shall be recognized for tax purposes in the year in which the absence o f
leave is actually paid to the personnel, up to the amount of the leave paid.
(3) The unrecognized expenses of mandatory social a nd health insurance referred to in para. 1
shall be recognized for tax purposes in the year in which the respective insurance contributions are
made, up to the amount of the insurance contributions made.
(4) (amend. – SG 110/07, in force from 01.01.2008) Where the taxation financial result is being
determined, the accounting financial result shall be reduced by the accounting income, respectively by
the amount of reduction of the accounting expenses, accounted in relation to the obligations under Para
1.
(5) (new – SG 110/07, in force from 01.01.2008) Par a 1 shall not apply to leaves and
insurances, related thereto, the accounting of which does not lead to reduction of the accounting
financial result for the year of their accounting.
(6) (new – SG 110/07, in force from 01.01.2008) Shall not be recognized for taxation purposes
the expenses resulting of compensable leaves and insurances related thereto, leading to reduction of the
accounting financial result in a year, other than the year of accounting the leaves and insurances, wh ere
they have not been paid by 31 December of the year of reduction of the accounting financial result. In
such cases Para 2 and 3 shall apply respectively.
(7) (new – SG 110/07, in force from 01.01.2008) Par a 1 – 6 shall not apply to compensable
leaves and insurances related thereto, which accord ing to the accountancy legislation have been
capitalized as a part of the value of a taxation amortizable asset.

Expenses which constitute income of local natural p ersons
Art. 42. (1) The expenses of taxable persons which constitute income of local natural persons
under the Law on Taxes on the Income of Natural Per sons, this income not being paid until 31
December of the current year, shall not be recognized for tax purposes in the year in which they are
accounted for.
(2) Para. 1 shall not apply to those expenses which constitute:
1. basic or additional labour remuneration determin ed by virtue of a statutory instrument;
2. income of a sole proprietor.
(3) The unrecognized expenses under para. 1 shall b e recognized for tax purposes in the year in
which the income is paid, up to the amount of the income paid.
(4) (amend. – SG 110/07, in force from 01.01.2008) Where the taxation financial result is being
determined, the accounting financial result shall be reduced by the accounting income, respectively by
the amount of reduction of the accounting expenses, accounted in relation to the obligations for unpaid
income under Para 1.
(5) (new – SG 110/07, in force from 01.01.2008) The expenses for mandatory insurance
instalments related to the unrecognized expenses under Para 1 shall not be recognized for taxation
purposes in the year of their accounting, where the compulsory insurance instalments have not been

deposited by 31 January of the current year.
(6) (new – SG 110/07, in force from 01.01.2008) The unrecohnized expenses under Para 5 shall
be recognized for taxation purposes in the year of deposit of the required mandatory insurance
instalments, within the amount of the deposited insurance instalments. Where the taxation financial
result is being determined, the accounting financial result shall be reduced by the accounting income,
respectively by the amount of reduction of the accounting expenses, accounted in relation to obligations
under Para 5.
(7) (new – SG 110/07, in force from 01.01.2008) Par a 1 and 5 shall not apply to income and
mandatory insurance instalments related thereto, the accounting of which does not lead to reduction of
the accounting financial result for the year of their accounting.
(8) (new – SG 110/07, in force from 01.01.2008) Sha ll not be recognized for taxation purposes
the expenses resulting of income and mandatory insu rance instalments under Para 1 and 5, leading to
reduction of the accounting financial result, in a year, other than the year of accounting the income and
insurances, where they have not been paid by 31 Dec ember of the year of reduction of the accounting
financial result. In such cases Para 3 and 6 shall apply respectively.
(9) (new – SG 110/07, in force from 01.01.2008) Par a 1 – 8 shall not apply to income and
insurances related thereto, which according to the accountancy legislation have been capitalized as a part
of the value of a taxation amortizable asset.
Regulation of low0rate capitalization
Art. 43. (1) The interest expenses shall not be rec ognized for tax purposes in the year in which
they are accounted for if the amount thereof has be en calculated for the current year with the formula as
follows:
UIE = IE 5 IR 5 0,75 x FRPI, where:
UIE are the unrecognized interest expenses;
IE are the interest expenses determined in accordan ce with para. 3;
IR is the total amount of interest receipts;
FRPI is the accounting financial result prior to any interest expenses and receipts.
(2) The unrecognized interest expenses under para. 1 shall be recognized for tax purposes
during the following 5 years until the full amount thereof has been recognized. The current year amoun t
shall be calculated with the formula as follows:
RIE = 0,75 x FRPI + IR 5 IE, where:
RIE are the recognized interest expenses;
FRPI is the accounting financial result prior to any interest expenses and receipts;
IR is the total amount of interest receipts;
IE are the interest expenses determined in accordan ce with para. 3 for the current year.
(3) The interest expenses shall include any financi al (interest) expenses accounted for in
connection with financing with borrowed capital. The interest expenses shall not include the expenses
of:
1. interest under financial leasing or bank credit, except where the parties to the transaction are
related parties, or the leasing, and the credit, respectively, has been guaranteed or secured or exten ded by
order of a related party;
2. penalty interest on delayed payments and indemni ties;
3. interest that is unrecognized for tax purposes on any other legal grounds;
4. (new – SG 110/07, in force from 01.01.2008) inte rests and other expenses related to credits,
which according to the accountancy legislation have been capitalized as a part of an asset value.
(4) In those cases where the financial result prior to any interest expenses and receipts is a
negative value, it shall not be taken into consideration when determining the amount of the unrecogniz ed
and recognized interest expenses under paras. 1 and 2.

(5) As for the newly incurred unrecognized interest expenses, it is the provisions of this Art.
that apply, in compliance with the succession of their incurrence.
(6) Para. 1 shall not apply where:
BC1 + BC2 EQ1 + EQ2,
————– <= 3 x -------------, where 2 2 BC1 is the borrowed capital as at 1 January of the current year; BC2 is the borrowed capital as at 31 December of th e current year; EQ1 is the equity as at 1 January of the current year; EQ2 is the equity as at 31 December of the current year. (7) The interest expenses of the credit institutions shall not be regulated under the procedure set forth in paras. 1 through 6. Chapter nine. AMOUTS IVOLVED I DETERMIIG THE TAX FIACIAL R ESULT Securities traded in regulated markets Art. 44. (amend. – SG 106/08, in force from 01.01.2 009) In the process of determining the tax financial result the accounting financial result shall be decreased by the profit from disposal of fin ancial instruments in the sense of § 1, Item 21 of the Add itional Provision, determined as the positive difference between the sale price and the documente d price of acquisition of the said financial instruments. The first sentence shall not apply to revenues from sources abroad for which “exemption with progression” has been stipulated as a method f or avoiding double taxation in an agreement on avoidance of double taxation. (2) In the process of determining the tax financial result the accounting financial result shall be increased by the loss from disposal of financial instruments in the sense of § 1, Item 21 of the Addit ional Provision determined as the negative difference bet ween the sale price and the documented price of acquisition of the said financial instruments. Reserve from subsequent appraisals of assets which are not tax amortizable assets Art. 45. (suppl. 5 SG 110/07, in force from 01.01.2 008) When determining the tax financial result, the accounting financial result shall be increased by the value of the written5off reserve of a subsequent appraisal (reappraisal reserve) on the write5off of assets that are not tax amortizable ones, providing that no accounting revenue or expenses ar e accounted for on the writing5off of the reserve. The increase is performed in the year in which the asset is written off. Where land is transformed into investment property, the increase shall be carried out in the year in which the investment property is written off. Tax treatment of liabilities Art. 46. (1) (amend.. 5 SG 110/07, in force from 01 .01.2008) When determining the tax financial result, the accounting financial result shall be increased by the amount of the liabilities of the taxable person, the decrease being carried out in the year in which any of the following circumstances is present: 1. expiry of the period of limitation for the liabilities, but not later than 5 years following the date on which the liabilities became executable; 2. the taxable person’s bankruptcy proceedings have been suspended with an approved rehabilitation plan, which provides for incomplete satisfaction of the creditors; the amount of the increase shall be equal to the amount of the decrease of the liability; 3. an effective decision of the Court has laid down that the liability or a part thereof is not due; 4. the creditor has waived his receivable through the Court or has remitted it; the amount of the increase shall be equal to the remitted amount; 5. prior to the expiry of the period of limitation for the liability, the latter has been extinguished by virtue of law; 6. the taxable person has filed an application for being struck off. (2) (amend. 5 SG 110/07, in force from 01.01.2008) Para 1 shall not apply where in the year of occurrence of the fact referred to in Para 1 the li mitation period for the obligation has expired or accounting revenue resulting from deletion of the obligation has been recorded. (3) (new 5 SG 110/07, in force from 01.01.2008) Whe re Para 1 was applied for the preceding year, the taxation financial result for the current year shall be determined by reducing the accountin g financial result by: 1. the amount of the obligation for which the limitation has expired in the current year; 2. the recorded accounting revenue during the curre nt year resulting from deletion of the obligation. (4) (new 5 SG 110/07, in force from 01.01.2008) The reduction under Para 3 shall be within the amount of the increase under Para 1 during the preceding years in respect of the obligation in question. Tax treatment of the tax input deducted for assets available at the time of registration or repeated registration under the Law on Value Added Tax Art. 47. (1) (suppl. 5 SG 110/07, in force from 01. 01.2008) When determining the tax financial result, the accounting financial result shall be increased by the amount of the tax input deducted by the taxable person for assets available at the time of registration or repeated registration under the Law on Value Added Tax, where no accounting revenue has be en recorded in relation to the deducted tax input. (2) (revoked 5 SG 110/07, in force from 01.01.2008) (3) (amend. 5 SG 110/07, in force from 01.01.2008) Para 1 shall not apply where: 1. the value added tax was not included in the historical value of the asset, or 2. the asset is not a tax amortizable asset and was deleted in the year of registration or second registration under the Law on the Value Added Tax. (4) (new 5 SG 110/07, in force from 01.01.2008) In case of deletion of an asset, which is not a tax amortizable asset and to which Para 1 was not a pplied during the preceding year, the tax financial result for the current year shall be determined by reducing the accounting financial result with the amount of deducted tax input for the assets in question, with which the accounting financial result was increased under the order of Para 1. Tax treatment for distribution of dividends from in vestments, accounted by equity method of accounting (new title 0 SG 95/09, in force from 01.01.2010) Art. 47a. (new 5 SG 95/09, in force from 01.01.2010 ) (1) For determination of the tax financial result of shareholders or partners, their book fina ncial result shall be reduced by the distributed dividends by local legal entities or by foreign persons, which are local persons for taxable purposes of an European Union Member State – a party under the Eur opean Economic Area Agreement, or of another Member State of the European Economic Area Agreemen t, where the investment is accounted by the equity method of accounting. (2) For the financial institutions, the reduction referred to in par. Shall be by the distributed dividends in the year. The reduction shall be done in the year of recognition of the distributed dividends in the annual financial statement of the financial institution. (3) For tax liability of persons, who are not finan cial institutions, the reduction referred to in par. 1 shall be by the distributed dividends in the period of acquisition prior to investment writing off. The reduction shall be done in the year of investme nt writing off. (4) Paragraphs 1 53 shall not apply to: 1. dividends, distributed from profits, made prior to acquisition of the investment; 2. dividends, distributed by licensed companies wit h specific investment purpose as per the Law for the Companies with a Special Investment Pur pose; 3. dividends, representing a hidden distribution of profit. Relocation of a place of business (ew title 0 SG 9 5/09, in force from 01.01.2010) Art. 47b. (new 5 SG 95/09, in force from 01.01.2010 ) (1) For determination of a taxable financial result in a place of business activity its book financial result shall be increased by the p rofit and shall be reduced by the loss from relocation of its place of business. Taxable temporary differences, related to the assets and liabilities of the place of business, shall be recognized for tax purposes i n the year of relocation of the place of business under the general provisions of the law. For determination of the tax financial result of the place of business the provision of Art. 66, par. 1 and 2 shall apply. (2) The profit and loss for the purposes of par. 1 shall be determined as a difference between the selling price of the place of business and the book cost of the assets, reduced by the book cost of liabilities of the place of business as of the date of relocation. (3) Paragraphs 1 and 2 shall not apply, where the p rofit and loss from relocation of the place of business have been included in calculation of the book financial result of the place of business. Chapter ten. TAX AMORTIZABLE ASSETS Tax amortizable assets Art. 48. Tax amortizable assets shall be the follow ing ones: 1. tax fixed tangible assets; 2. tax fixed intangible assets; 3. investment property, with the exception of land; 4. subsequent expenses referred to in Art. 64. Goodwill Art. 49. (1) The goodwill resulting from a business combination shall not constitute tax amortizable asset. (2) The loss resulting from devaluation and the loss in goodwill shall not be recognized for tax purposes. Tax fixed tangible assets Art. 50. Tax fixed tangible assets shall be those a mounts which meet the requirements regarding amortizable fixed tangible assets specified in the National Accounting Standards for Small and Medium5Sized Enterprises, and the value of the said assets either equals or exceeds the lower value of the following: 1. the value threshold of significance of the fixed tangible asset specified in the accounting policy of the taxable person; 2. (amend. 5 SG 110/07, in force from 01.01.2008) s even hundred BGN. Tax fixed intangible assets Art. 51. (1) Tax fixed intangible assets shall be: 1. those acquired non5financial resources which: а) have no physical substance; b) are used for a period longer than 12 months; c) have a limited useful5life period; d) have a value that either equals or exceeds the lower value of the following ones: аа) the value threshold of significance of the fixe d intangible asset specified in the accounting policy of the taxable person; bb) (amend. 5 SG 110/07, in force from 01.01.2008) seven hundred BGN; 2. (revoked 5 SG 110/07, in force from 01.01.2008) 3. the amounts charged as a result of business oper ations bringing about an increase of the economic benefit from leased fixed assets or assets the use of which has been granted; these amounts d o not form tax fixed tangible asset. (2) Those accounting expenses which have been accou nted for in connection with the acquisition of a tax fixed intangible asset prior to the coming into existence of the asset shall not be recognized for tax purposes in the year in which th ey are accounted for and shall be taken into consideration when determining the tax amortizable value of the asset. In those cases where in the course of the subsequent year circumstances are present evidencing that the taxable person shall not acquire the tax fixed intangible asset, the unrecognized expenses under the first sentence shall be recognized for tax purposes in the year in which the said circumstances are present, providing that the requirements of this Law are fulfilled. Tax amortization plan Art. 52. (1) The taxable persons forming a tax fina ncial result shall draw and implement a tax amortization plan, and shall record therein all the tax amortizable assets. (2) The tax amortization plan shall be a tax regist er containing the information specified in the requirements of this Chapter on the process of acqu isition, subsequent implementation, amortization an d write5off of tax amortizable assets. (3) The tax amortization plan shall contain at least the following information regarding each of the tax amortizable assets: 1. designation; 2. month of putting the asset into operation; 3. tax amortizable value; 4. tax amortization charged; 5. tax value; 6. annual tax amortization rate; 7. annual tax amortization; 8. month of introducing changes in the value of the asset and the circumstances necessitating those changes; 9. month of suspension and resumption of the chargi ng of tax amortizations and the circumstances necessitating it; 10. month of the write5off of the asset under Art. 60, para. 3 for accounting purposes and the circumstances necessitating it; 11. month of the write5off of the asset from the tax amortization plan. Value of the tax amortizable assets Art. 53. (1) The tax amortizable value shall be the historical value of the asset, decreased by the charged provisions and donations it comprises, the latter being connected with the asset. In the cases referred to in Art. 64, para. 1 and Art. 67 the tax amortizable value shall be the aggregate of: 1. the subsequent expenses – in the cases referred to in Art. 64, para. 1; 2. those expenses that have not been recognized for tax purposes – in the cases referred to in Art. 67. (2) The annual tax amortization shall be the amortization charged under the tax amortization plan for the respective year in accordance with the requirements set forth in this Chapter. (3) The tax amortization charged shall be the aggre gate of the annual tax amortizations charged with regard to the respective asset. The tax amorti zation charged may not exceed the tax amortizable value of the asset. (4) The tax value shall be the tax amortizable valu e of the asset decreased by the tax amortization charged for it. Tax and accounting amortizations Art. 54. (1) When determining the tax financial res ult, the annual tax amortizations determined in accordance with the procedure set forth in this Chapter shall be recognized for tax purposes. (2) (suppl. 5 SG 110/07, in force from 01.01.2008) The accounting amortization expenses shall not be recognized for tax purposes. Where determini ng the tax financial result, the accounting financial result shall be increased by the accounting amortiz ations, regardless of whether their accounting leads to reduction of the accounting financial result for the year of their accounting. Categories of tax amortizable assets Art. 55. (1) When determining the annual tax amorti zations, the tax amortizable assets shall be distributed in the following categories: 1. Category I – solid5structured buildings, including investment property, equipment, power transmission devices, communication lines; 2. Category II – machinery, production equipment, a pparatuses; 3. Category III – means of transportation, with the exception of motor vehicles; pavement of roads and runways; 4. (suppl. 5 SG 110/07, in force from 01.01.2008) C ategory IV – computers, peripheral devices for computers, software and the right to software use, mobile phones; 5. Category V – motor vehicles; 6. Category VI – those tax fixed tangible and intan gible assets the term of use of which is limited under contractual relationships or a legal obligation; 7. Category VII – all other amortizable assets. (2) The annual tax amortization rate shall be deter mined as a fixed rate for the year and shall not exceed the following amounts: Category of assets Annual tax amortization rate (%) Category I 4 Category II 30 Category III 10 Category IV 50 Category V 25 Category VI 100/years of the legal limitation The annual rate may not exceed 33 1/3 Category VII 15 (3) As for the assets of the Category II, the annua l tax amortization rate may not exceed 50 percent in those cases where all of the following conditions are present: 1. the assets form part of the initial investment; 2. the assets are brand5new ones and have not been used prior to their acquisition. (4) (revoked 5 SG 110/07, in force from 01.01.2008) (5) (new 5 SG 110/07, in force from 01.01.2008) The acquisition of assets by conclusion of a leasing contract, classified as financial leasing according to the accountancy legislation, shall not serve as grounds for submission the assets in question un der category VI. (6) (new 5 SG 106/08, in force from 01.01.2009) Ite m 1 of Para 3 shall not apply, when the assets under Para 3 have been acquired in relation to an investment for increasing the energy efficiency, where voluntary agreements under the order of Chapt er Five, Section II of the Law on the Energy Efficiency have been concluded. General procedure for recording the assets in a tax amortization plan Art. 56. The tax amortizable assets shall be record ed in the tax amortization plan with their tax amortizable values. Specific procedure for recording the assets in a ta x amortization plan Art. 57. (1) A person that has his taxation regime altered, and as a result thereof an obligation arises for him to form a tax financial result, shall draw a tax amortization plan and shall record the rein the available tax amortizable assets with their tax amortizable value and the tax amortization charged in accordance with the procedure set forth in paras. 2 and 3. (2) The tax amortizable value of an asset under par a. 1 shall be determined by way of: 1. increasing its historical value by those subsequent expenses made until that time which bring about future economic advantages relating to the as set, according to the accounting legislation, and 2. decreasing its historical value by the charged provisions and donations it comprises, the latter being connected with the asset. (3) The tax amortization of an asset charged under para. 1 shall be the accounting amortization that would have been charged on the historical valu e of the asset until that time, revised in accordance with the procedure set forth in para. 2. (4) When drawing the tax amortization plan, the ass ets for which the charged tax amortization equals or exceeds their tax amortizable value shall not be recorded in the plan. (5) Paras. 1 through 4 shall not apply in those cases in which an asset is repeatedly recorded in the tax amortization plan. Charging of tax amortizations Art. 58. (1) (suppl. 5 SG 110/07, in force from 01. 01.2008) The charging of a tax amortization commences from the beginning of the month in the co urse of which the tax amortizable asset is put into operation or from the beginning of the following mo nth. The date on which the asset is put into operation must be evidenced by way of a document. (2) In those cases where a statutory instrument provides for a procedure for putting the asset into operation, the asset may not be put into operation for tax purposes earlier than the time specified in the statutory instrument. (3) The annual tax amortization shall be calculated using the following formula: ATA = TAV x ATAR x M/12, where: ATA is the annual tax amortization; TAV is the tax amortizable value; ATAR is the annual tax amortization rate determined by the taxable person in accordance with Art. 55, paras. 2 and 3; М is the number of months in the year during which tax amortization is charged. Suspension of the charging of tax amortization Art. 59. (amend. 5 SG 110/07, in force from 01.01.2 008) (1) The charging of tax amortization shall be suspended in those cases where the respective asset is temporarily out of use (it does not provide economic benefit) for a period which is longer than twelve months. The charging shall be suspended from the beginning of the month following the month of expiration of the term referred to in the first sentence, and shall be resumed at the beginning of the month in which the asset is put into operation again. The tax amortizable asset shall not be written off from the tax amortization plan. (2) The tax financial result for the year of expira tion of the twelve month term referred to in Para 1 shall be determined by reducing the annual t ax amortization of the taxable person by the amount of the accrued tax amortization of the asset during the twelve months in which the asset has remained unused. The amount of the reduction referred to in the first sentence shall be used to correct the tax amortizable asset by the date of discontinuing the accrual of the tax amortization as follows: 1. the accrued tax amortization of the asset is reduced; 2. the tax value of the asset is increased. (3) Any taxable person under liquidation or insolve ncy proceedings shall discontinue the accrual of tax amortizations of the assets, for which the accrual of accounting amortizations is discontinued according to the accounting legislation. By the date of discontinuance of the accrual of the tax amortization Art. 60, Para 5 shall apply respectively. (4) The charging of tax amortizations for the asset s under Art. 60, para. 3 shall not be suspended. Write0off of assets from the tax amortization plan Art. 60. (1) The asset is written of from the tax amortization plan when it has been totally amortized for tax purposes. (2) Where an asset is written off for tax purposes prior to being totally amortized for tax purposes, it shall be written off from the tax amortization plan at the beginning of the month in whic h it is written off for tax purposes. (3) Para. 2 shall not apply to the write5off of assets where: 1. (amend. 5 SG 110/07, in force from 01.01.2008) c ompletely deprecated for account purposes; 2. the assets are written off as a result of an increase of the value threshold of significance. (4) The assets referred to in para. 3 shall be writ ten off from the tax amortization plan in accordance with the procedure set forth in para. 1. (5) (suppl. 5 SG 110/07, in force from 01.01.2008) In those cases where an amortizable asset under the National Accounting Standards for Small a nd Medium5Sized Enterprises is transformed into a non5amortizable one, except for the transformation into investment property, the said asset shall be written off from the tax amortization plan from the beginning of the current month. The first sentence shall not apply to completely depreciated assets fo r account purposes and to assets, which remain temporarily unused (not economically profitable). (6) Where the tax amortizable asset is no more used for an activity for which tax financial result is formed, the said asset shall be written off from the tax amortization plan from the beginning of th e current month. Preserving the values of the tax amortizable asset Art. 61. The values of the tax amortizable asset shall not be changed in the cases of: 1. subsequent accounting appraisal (reappraisal and devaluation); 2. a change in the accounting policy, including a change in the applicable accounting standards; 3. accounting errors made in previous periods, with the exception of technical errors; 4. registration and repeated registration under the Law on Value Added Tax. Changing the value of the tax amortizable asset Art. 62. (1) A change in the value of the tax amort izable asset shall be made where circumstances are present necessitating a change under accounting law, with the exception of the cases referred to in Art. 61. (2) The change in the value of the tax amortizable asset shall be reported in the tax amortization plan as at 1 January of the year in which the circumstances necessitating the change are established. No change in the tax amortization plan is made, neither is there any revision of the tax amortization charged for the previous years. (3) The value of the tax amortizable asset followin g the change must be equal to the value that would have been determined if the circumstances nec essitating the change had been known in the previous years. (4) When determining the tax financial result, the annual tax amortization of the asset for the current year shall be corrected by the difference b etween the tax amortization charged for the asset during the previous years and the tax amortization that would have been charged if the circumstances necessitating the change had been known in the previous years. (5) In those cases where the established circumstances do not necessitate a change in the value of the asset for the previous years, the change in the value shall be reported in the tax amortization plan at the time the circumstance is established in the course of the current year. Subsequent expenses relating to an asset included i n the tax amortization plan Art. 63. The tax amortizable value of an asset incl uded in the tax amortization plan shall be increased by those subsequent expenses for which th e accounting law provides that they result in future economic benefits connected with the tax amortizabl e asset. The tax amortizable value shall be increased from the beginning of the month in which the subsequent expenses are completed. Subsequent expenses relating to an asset which is w ritten off from the tax amortization plan Art. 64. (1) Where the asset has been written off f rom the tax amortization plan, but has not been written off for tax purposes, a separate tax amortizable value shall be recorded of those subsequ ent expenses for which the accounting law provides that they result in future economic benefits connected with the tax amortizable asset. (2) The tax amortizable asset referred to in para. 1 shall be recorded in the tax amortization plan from the beginning of the month in which the subseq uent expenses are completed. (3) For the purposes of Art. 55 the tax amortizable asset shall belong to the category of the asset in connection with which the subsequent expenses ar e made. (4) Where the asset in connection with which the su bsequent expenses are made is written off from the tax amortization plan prior to the time the tax amortizable asset under para. 1 is completely amortized, the latter shall be written off from the tax amortization plan under the conditions and in accordance with the procedure set forth in Art. 60. Receipts and expenses of subsequent appraisals of t ax amortizable assets Art. 65. The accounting receipts and expenses of su bsequent appraisals of tax amortizable assets shall not be recognized for tax purposes. Transformation of the accounting financial result upon the write0off of a tax amortizable asset Art. 66. (1) Where an asset is written off from the accounting amortization plan, when determining the tax financial result the accounting financial result shall be increased by the accounting balance5sheet value of the asset. (2) Where an asset is written off from the accounti ng amortization plan, when determining the tax financial result the accounting financial result shall be decreased by the tax value of the asset. (3) Paras. 1 and 2 shall not apply: 1. in those cases of unrecognized expenses of missing assets and receivables relating thereto in which the tax value exceeds the accounting balance5 sheet value of the asset; 2. in those cases of write5off of an asset at the account of the equity in which the tax value exceeds the accounting balance5sheet value of the a sset; 3. in those cases of write5off of an asset under Art. 60, para. 6 in which the tax value exceeds the accounting balance5sheet value of the asset; 4. in the cases of transformation of companies and restructuring of cooperative societies under Chapter Nineteen, Sections II and III. Accounting expenses forming a tax amortizable asset Art. 67. The accounting expenses forming a tax amortizable asset, including the subsequent expenses, shall not be recognized for tax purposes. Receipts and expenses accounted for in connection w ith a donation relating to a tax amortizable asset Art. 68. The accounting receipts and expenses accou nted for in connection with a donation with which the historical value of the asset was decreased in determining the tax amortizable value thereof shall not be recognized for tax purposes. Specific tax treatment of an asset formed as a resu lt of research and development activities Art. 69. (1) When determining the tax financial res ult, the taxable person shall be entitled to decrease the accounting financial result by the historical value of a fixed intangible asset, doing so only once in the year in which it is formed, providing t hat all of the following conditions are present: 1. the asset has been formed as a result of research and development activities; 2. the research and development activities have bee n carried out in connection with the occupation of the taxable person; 3. the research and development activities have been assigned by way of an order of a scientific research institute or a higher5education institution under free5market conditions. (2) In those cases where the taxable person has exe rcised his right referred to in para. 1, the fixed intangible asset under para. 1 shall not be tax amortizable asset. Chapter eleven. CARRY0FORWARD OF A TAX LOSS General provisions Art. 70. (1) Taxable persons shall be entitled to c arry forward the tax loss formed in accordance with this Part. Where a taxable person opts for the carry5forward of a tax loss, the latter must be carried forward gradually, in the course of the 5 subsequen t years, until all of it has been carried forward. (2) The taxable person shall exercise his right to opt for deducting the tax loss in the first year, following the year in which the tax loss occurred, in which the person has formed positive tax financi al result prior to deducting the tax loss. In those cases where until the tax control date the taxable pe rson has not formed positive tax financial result prior to deducting the tax loss, it shall be considered that the person has exercised his right to carrying forward the tax loss. Procedure for deduction Art. 71. (1) Upon determining the tax financial res ult, the tax loss shall be deducted from the positive tax financial result, which is the result prior to deducting the tax loss. Where the tax loss is smaller than the positive tax financial result, when determining the tax financial result the full amo unt of the tax loss shall be deducted. (2) The tax loss shall also be deducted when determ ining the quarterly advance contributions for corporate tax. ewly incurred tax losses Art. 72. As for newly incurred tax losses, it is th e provisions of this Chapter that shall apply, in observance of the succession of their incurrence. T he five years’ term for each of the newly incurred tax losses shall commence from the year which follows t he year of incurrence of the respective loss. Applying the method of "Exemption with progression" to a loss from a source abroad Art. 73. (1) Where a tax loss is formed in the cour se of the current year in a State with which the Republic of Bulgaria has signed a treaty on avo idance of double taxation, and the method of avoidance of double taxation regarding profits is the "Exemption with progression" method, the loss shall not be deducted from the tax profits derived either in the current year or in the subsequent years from a source located either within the country or in other States. (2) The tax loss referred to in para. 1 shall be de ducted gradually in the course of the 5 subsequent years, in observance of the requirements of this Chapter, from the tax profits derived from the source abroad. (3) (amend. 5 SG 106/08, in force from 01.01.2009) Upon suspension of the activity of a business establishment in a Member State of the European Union or the European Economic Area, those tax losses from the business establishment which ha ve not been carried forward or recovered shall be carried forward in accordance with the general legal procedure, this being valid until the expiry of the five years’ period following the incurrence thereof . Applying the method of tax input to a loss from a s ource abroad Art. 74. (1) Where a taxable person has formed a ta x loss and the said loss or a part thereof is from a source abroad to which the tax input method of avoiding double taxation applies, the current year’s loss that has not been deducted shall be deducted gradually in the course of the 5 subsequent years, in observance of the requirements of this Ch apter, from the tax profits derived from the said source abroad. (2) Where the tax loss for the year is formed from more than one sources (located in a foreign State or within the country), for the purposes of para. 1 it shall be distributed among the States in which it has occurred, in accordance with the formula as follows: А = B x C/D, where: А is the part of the taxable person’s tax loss for the year, allotted to the respective source (located in a foreign State or within the country); B is the tax loss of the taxable person for the year; C is the tax loss formed by the respective source ( located in a foreign State or within the country); D is the aggregate of the tax losses formed by all sources (located in a foreign State or within the country). (3) (amend. 5 SG 106/08, in force from 01.01.2009) Para. 1 shall not apply to losses from a source in a Member State of the European Union or the European Economic Area. Chapter twelve. ACCOUTIG ERRORS Eliminating the accounting errors Art. 75. (1) Where, in the current year, an account ing error relating to years in the past is identified, the tax financial results for the respective years in the past shall be revised in accorda nce with the requirements of the laws that were effective in the respective years in the past, in a way as though the error had not been committed. (2) It is the tax rate for the respective year in the past that shall apply in determining the tax liability for the tax financial result for the respective year in the past revised in accordance with para. 1. (3) (amend. 5 SG 110/07, in force from 01.01.2008) When determining the due annual corporate tax for the current year, the annual corporate tax for the current year shall be adjusted with the difference between the tax liability prior to the c orrection of the error and after the correction of the error. (4) In those cases where, as a result of the identi fied error, it is established that the taxable person was obliged to form a tax amortizable asset for the respective year in the past, the annual tax amortization recognized in determining the tax fina ncial results for the preceding years shall be equal to the accounting amortization that would have been ch arged for the said asset for the respective years, however, this annual tax amortization may not excee d the one that would have been charged if the maximum allowed annual tax amortization rates under Art. 55 had been used. The tax amortizable asset shall be recorded in the tax amortization plan as at 1 January of the year of identifying the error, with its tax amortizable value and the tax amortization char ged under the first sentence. (5) The tax temporary difference that would have oc curred in a previous year if the error had not been committed shall be regarded as occurring in the course of the respective previous year and shall be recognized for tax purposes in accordance with t he general procedure set forth in law. (6) Paras. 1 through 3 shall not apply to those errors committed earlier than 5 years before the current year which, if not committed, would have br ought about a decrease of the tax financial result for the respective year in the past. (7) The accounting receipts and expenses accounted for in the current year in connection with the identification of an accounting error relating to years in the past shall not be recognized for ta x purposes. Specific cases of correcting of accounting errors Art. 76. In those cases where, following the revisi on of the tax financial result under Art. 75, para. 1, a tax loss for the respective period in th e past appears or changes, there shall apply the provisions of Chapter Eleven. The tax financial res ults for the years from the time the error was committed until the time it was identified shall be revised in accordance with Art. 75 as though the e rror had not been committed. The year in which the error was committed shall be regarded as the year of occurrence of the tax loss. Expenses accounted for in violation of the accounting legislation Art. 77. (1) Those expenses which have been account ed for in violation of the accounting legislation shall not be recognized for tax purposes in the year in which they are accounted for. (2) The expenses under para. 1 that have not been r ecognized for tax purposes shall be recognized for tax purposes where this Law allows it and in observance of the requirements of this Chapter. Receipts and expenses that have not been accounted for in accordance with the procedure set forth in a statutory instrument Art. 78. When determining the tax financial result, the accounting financial result shall be corrected by the aggregate of those receipts and expenses which, according to the requirements of a statutory instrument, should have been accounted for in the current year but were not accounted for by the taxable person. In those cases where, later on, accounting receipts and expenses are accounted for under the first sentence, they shall not be recognized for tax purposes. Accounting errors connected with tax amortizable as sets Art. 79. Except for Art. 75, paras. 4 and 7, this S ection shall not apply to accounting errors connected with tax amortizable assets. Interest on delayed payment Art. 80. Interest on delayed payment shall also be due in the cases of applying Art. 75. The interest shall be due from the date on which the corporate tax for the respective year in the past should have been paid. Correction of errors identified in the course of ex ercising tax control Art. 81. Except for Art. 75, para. 3, the provision s of this Chapter shall also apply to those errors which have been identified in the course of exercising tax control. Chapter thirteen. CHAGIG THE ACCOUTIG POLICY Corrections in the cases of changing the accounting policy Art. 82. (1) In those cases where the accounting po licy is changed, when determining the tax financial result the accounting financial result for the current year shall be corrected in the way an d by the amounts by which the tax financial results for the previous years would have been corrected if the changed accounting policy had been applied in the said years. (2) The tax temporary differences that have occurred due to the accounting policy applied prior to the change shall be treated as if they had not occurred. (3) In those cases where the changed accounting pol icy was applied in the previous years and, as a result thereof, tax temporary differences would occur, it shall be considered that they have occurred, and they shall be recognized in accordance with the general procedure of the law. (4) Those accounting receipts and expenses which ha ve occurred as a result of the change in the accounting policy shall not be recognized for tax purposes. (5) (amend. 5 SG 110/07, in force from 01.01.2008) Para 1 through 3 shall not apply where the change in the accounting policy concerns tax amortizable assets. (6) No interest on delayed payment shall be due in those cases in which the change in the accounting policy brings about an increase of the tax financial result. Chapter fourteen. ADVACE COTRIBUTIOS General provisions Art. 83. (1) (prev. text of Art. 83 5 SG 110/07, in force from 01.01.2008) The taxable persons shall make monthly or quarterly advance contributio ns for corporate tax. (2) (new 5 SG 110/07, in force from 01.01.2008) Exe mpt from advance contributions shall be: 1. taxable persons, whose net income of sales for the preceding year does not exceed BGN 200 000; 2. newly constituted taxable persons for the year o f their constitution, except those newly constituted as a result of a transformation under the Commercial Law. Monthly advance contributions Art. 84. The monthly advance contributions shall be made by the taxable persons that have formed tax profit for the preceding year. Quarterly advance contributions Art. 85. The quarterly advance contributions shall be made by the taxable persons that have no obligation to make monthly advance contributions. Determining the monthly advance contributions Art. 86. (1) (prev. text of Art. 86 5 SG 110/07, in force from 01.01.2008) The monthly advance contributions shall be determined on the grounds of the following formula: ADVMONTHLY = ((DP x k)/12) x TR, where: ADVMONTHLY is the monthly advance contribution; DP is the declared tax profit for the year prior to the preceding year (when determining the monthly advance contributions for the period from 1 January until 31 March) or the declared tax profit for the preceding year (when determining the monthl y advance contributions for the period from 1 April until 31 December); k is the coefficient reflecting the changes in the economic conditions for the current year, this coefficient being approved by the Law on the State Budget of the Republic of Bulgaria for the respective year; TR is the tax rate of the corporate tax. (2) (new 5 SG 110/07, in force from 01.01.2008) Whe re the taxable profit for the preceding year exceeds the taxable profit for the year before the preceding year, the monthly advance contributio n for April shall be formed by increasing the monthly advance contribution, calculated under Para 1 for the period from 1 April to 31 December, with the value from the following formula: А = 3 x (АВ2 – АВ1), where: A shall be the value of increase; AB1 – the monthly advance contribution for the peri od from 1 January to 31 March, calculated according to Para 1; AB2 5 the monthly advance contribution for the period from 1 April to 31 December, calculated according to Para 1. The same order shall be used to determine the month ly advance contribution for April, where the taxable person: 1. was constituted in the preceding year, or 2. estimated tax loss for the year before the preceding year, or 3. has failed to form tax financial result for the year before the preceding year. (3) (new 5 SG 110/07, in force from 01.01.2008) Whe re the taxable profit for the year before the preceding year exceeds the taxable profit for the preceding year, the monthly advance contribution for April shall be formed by reducing the monthly advance contribution, calculated under Para 1 for the period from 1 April to 31 December, by the value fr om the following formula: B = 3 x (АВ1 – АВ2), where: A shall be the value of reduction; AB1 – the monthly advance contribution for the peri od from 1 January to 31 March, calculated according to Para 1; AB2 5 the monthly advance contribution for the period from 1 April to 31 December, calculated according to Para 1. Where the amount of the reduction exceeds the month ly advance contribution, calculated according to Para for the period from 1 April to 31 December, the monthly advance contribution for April shall be zero, and the excess shall be deducted from the following monthly advance contributions for the current year, when determining their amount . Determining the quarterly advance contributions Art. 87. The quarterly advance contributions shall be determined on the grounds of the following formula: ADVQUARTERLY = TP x TR 5 ADVPAID, where: ADVQUARTERLY is the quarterly advance contribution; TP is the tax profit from the beginning of the year until the end of the quarter for which the quarterly advance contribution is determined; TR is the tax rate of the corporate tax; ADVPAID are the advance contributions that have bee n paid from the beginning of the year until the end of the quarter for which the quarterly advance contribution is determined. Declaration for decreasing the advance contribution s Art. 88. (1) The taxable persons shall be entitled to file declarations of a standard form for having their advance contributions decreased, in those cases where they think the advance contributions shall exceed the annual corporate tax due. (2) The decrease of the advance contributions shall be enjoyed after the declaration is filed. Interest due where the advance contributions have b een decreased more than admissible Art. 89. (1) Where the taxable person has decreased his advance contributions in accordance with the procedure set forth in Art. 88 and the due annual corporate tax exceeds the advance contributions due for the respective year by more than 10 percent, interest shall be due. (2) The amount on which interest is due under para. 1 shall be determined as the difference between the due annual corporate tax and the advanc e contributions due for the year. In those cases where the aggregate of the advance contributions for the year, determined in accordance with Arts. 86 or 87, is smaller than the due annual corporate tax, when determining the difference under the first sentence it is these advance contributions that are taken instead of the annual corporate tax. (3) When calculating the interest under para. 1, th e amount under para. 2 shall be distributed among the respective months/quarters of the decreas ed advance contribution declared under Art. 88. The portion of the amount under para. 2, allotted to the respective month/quarter, shall be determined on the grounds of the following formula: А = (B 5 C) x (D/(E 5 F)), where: А is the portion of the amount on which interest is due, allotted to the respective month/quarter of the decreased advance contribution declared unde r Art. 88; B is the advance contribution determined under Arts. 86 or 87 for the respective month/quarter; C is the advance contribution due for the respective month/quarter; D is the total amount on which interest for delayed payment is due, this amount being determined in accordance with the procedure set forth in para. 2; E is the total amount of the advance contributions for the year, determined under Arts. 86 or 87; F is the total amount of the advance contributions due for the year. (4) Within the meaning of this Art., "advance contr ibution due" shall be: 1. the advance contribution determined under Arts. 86 or 87 – for the advance contributions prior to filing a declaration for decreasing the advance contributions under Art. 88; 2. the decreased advance contribution specified in the declaration for decreasing the advance contributions under Art. 88 5 for the advance contr ibutions following the filing of the declaration for decreasing the advance contributions under Art. 88. (5) The interest referred to in para. 1 on the respective advance contribution shall be determined in accordance with the Law on Interest on Taxes, Fe es and Other Similar State Receivables and shall be calculated for the period commencing on the date on which the advance contribution becomes executable and ending on the date on which the annual corporate tax is paid, however, that date must not be later than 31 March of the subsequent year. Payment of the advance contributions Art. 90. (1) The monthly advance contributions shal l be payable until the 15th day of the month they are paid for. (2) The quarterly advance contributions shall be pa yable until the 15th day of the month following the quarter they are paid for. No quarterly advance contribution is payable for the fourth quarter. Exemption from advance contributions Art. 91. The taxable persons that are exempt from c orporate tax for the current year shall also be exempt from the respective part of the advance contributions due, the said part being in proportion to the amount of exemption. Chapter fifteen. DECLARIG AD PAYIG THE CORPORATE TAX Declaring the corporate tax Art. 92. (1) The taxable persons that are taxed wit h corporate tax shall submit an annual tax return of a standard form regarding the tax financial result and the annual corporate tax due. (2) The annual tax return shall be submitted not later than 31 March of the subsequent year with the territorial directorate of the National Revenue Agency by registration of the taxable person. (3) (amend. 5 SG 95/09, in force from 01.01.2010) T he annual business report shall be submitted together with the annual tax return. (4) (amend. 5 SG 95/09, in force from 01.01.2010) A nnual business report shall not be submitted by taxable persons, who have met the following requirements in aggregate: 1. they have not carried out any business during the year; 2. they have not accounted income and expenditures in the year according to the accountancy laws. (5) (amend. 5 SG 95/09, in force from 01.01.2010) The taxable persons that submit their annual tax returns and their annual business report until 31 March of the subsequent year electronically and pay their corporate tax within the same time limit, shall enjoy a relief of 1 percent of the annual corporate tax due, however, this relief may not exceed BGN 1,000. Payment of the tax Art. 93. After deducting the advance contributions paid for the respective year, the taxable persons shall pay the corporate tax for the respective year not later than 31 March of the subsequent year. Overpaid tax Art. 94. (1) The overpaid corporate tax may be dedu cted from subsequent advance and annual contributions for the same tax, commencing on 1 Jan uary of the year following the year for which the corporate tax is overpaid. (2) In those cases where, after the submission of the annual tax return it is established that the taxable person has deducted corporate tax groundles sly, interest shall be due on the unpaid advance contributions. Chapter sixteen. FIACIAL ISTITUTIOS Receipts and expenses determined by a regulatory bo dy Art. 95. In those cases where the amount of the rec eipts or expenses accounted for under the accounting policy of the financial institution differs from the amount determined by a regulatory body under a statutory instrument, it is the amount dete rmined under the statutory instrument that is recognized when determining the tax financial result. Receipts and expenses of subsequent appraisals (rea ppraisals and devaluations) of financial assets and liabilities (supp. 0 SG 95/09, in force from 01.01.2010) Art. 96. (1) (prev. Art. 96 5 SG 95/09, in force fr om 01.01.2010) The receipts and expenses of subsequent appraisals of financial assets and liabi lities accounted for by financial institutions shall be recognized for tax purposes in the year in which th ey are accounted for. The financial institutions shall not apply Arts. 34, 35 and 37 to the financial assets and liabilities. (2) (new 5 SG 95/09, in force from 01.01.2010) Wher e income and expenditures from subsequent valuations of financial assets and liabilities have not been recognized for tax purposes in a preceding period, they shall be recognized for tax purposes pursuant to the general provisions of the law. The provision of par. 1, second sentence shall not apply to those assets and liabilities. Subsequent appraisals of financial assets and liabi lities recognized directly in the equity Art. 97. (1) When determining the tax financial res ult of financial institutions, their accounting financial result shall be increased by the profits of subsequent appraisals of financial assets and liabilities recognized directly in their equity in the current year. (2) When determining the tax financial result of fi nancial institutions, their accounting financial result shall be decreased by the losses of subseque nt appraisals of financial assets and liabilities recognized directly in their equity in the current year. (3) (amend. 5 SG 110/07, in force from 01.01.2008) Profits and losses recognized during the current year in the income and expenses account (th e revenue account), which have participated in estimating the tax financial result under the order of para. 1 and 2, shall not be recognized for tax purposes. Chapter seventeen. SPECIFIC RULES O DETERMIIG THE TAX FIACIAL RES ULT OF COOPERATIVE SOCIETIES Production and consumer dividends Art. 98. (1) Production dividends shall be the amou nts distributed for those products which the members of the cooperative society have produced an d sold to the cooperative society. These dividends shall be determined on the grounds of the profit corresponding to the products sold, including product s sold after being processed. (2) Consumer dividends shall be the amounts distrib uted for those consumer goods which the members of the cooperative society buy from the lat ter. These dividends shall be determined on the grounds of the profit resulting from the difference between the sale price at which the cooperative society has sold the goods, this price being decreased by the expenses of selling the goods, and the p rice which the cooperative society has paid for acquirin g the goods. Tax treatment of production and consumer dividends Art. 99. (1) When determining the tax financial result, the accounting financial result shall be decreased by those production and consumer dividend s which are paid to the members of the cooperative society prior to 25 March of the subsequent year and are covered by the balance5sheet profit. The decrease under the first sentence shall be up to the amount of the positive accounting financial result. (2) Those production and consumer dividends which a re paid to the members of the cooperative society in the course of the year shall be accounted for but shall not be considered when determining the accounting financial result. (3) Where the cooperative society has accounted for a balance5sheet loss or a balance5sheet profit which is insufficient to cover the production and consumer dividends paid during the year, the amount of those production and consumer dividends p aid during the year which are not covered shall be accounted for as accounting expense that is not recognized for tax purposes. Chapter eighteen. DIVIDEDS WITHI THE EUROPEA COMMUITY (REVOKED – SG 69/08, I FORCE FROM 01.01.2009) Section I. Definitions (revoked – SG 69/08, in force from 01.0 1.2009) Another Member State company Art. 100. (revoked – SG 69/08, in force from 01.01. 2009) Local mother company Art. 101. (revoked – SG 69/08, in force from 01.01. 2009) Member State mother company Art. 102. (revoked – SG 69/08, in force from 01.01. 2009) Local subsidiary company Art. 103. (revoked – SG 69/08, in force from 01.01. 2009) Member State subsidiary company Art. 104. (revoked – SG 69/08, in force from 01.01. 2009) Section II. Tax Treatment of the Distribution of Dividends (rev oked – SG 69/08, in force from 01.01.2009) Dividends distributed by a Member State subsidiary company Art. 105. (revoked – SG 69/08, in force from 01.01. 2009) onfulfilment of the condition for exemption from t axation Art. 106. (revoked – SG 69/08, in force from 01.01. 2009) Unrecognized expenses relating to unrecognized receipts from dividends Art. 107. (revoked 5 SG 110/07, in force from 01.01 .2008) Dividends distributed by a local subsidiary company in favour of a Member State mother company Art. 108. (revoked – SG 69/08, in force from 01.01. 2009) Security Art. 109. (revoked – SG 69/08, in force from 01.01. 2009) Cooperative societies Art. 110. (revoked – SG 69/08, in force from 01.01. 2009) Tax evasion Art. 111. (revoked – SG 69/08, in force from 01.01. 2009) Chapter nineteen. TRASFORMATIO OF COMPAIES AD COOPERATIVE SOCIETI ES, AD TRASFER OF ETERPRISES Section I. General Provisions Scope Art. 112. The provisions of this Chapter shall appl y to the transformation of companies and cooperative societies, and to the transfer of enterprises. Transformation date Art. 113. The transformation date for tax purposes shall be the date on which the transformation is entered in the Commercial Register. Last tax period where a company under transformatio n is wound up Art. 114. The last tax period where a company under transformation is wound up shall be the period commencing from the beginning of the year an d ending on the date of transformation. As for the companies which are newly established in the year o f transformation, the last tax period shall be the period commencing from the date of establishment and ending on the date of transformation. Taxation regarding the last tax period Art. 115. (1) The companies under transformation an d the foreign persons’ business activity establishments under transformation shall be taxed with corporate tax for the last tax period in accordance with the general legal procedure. The taxation shall be final. (2) For tax purposes the assets and liabilities as at the transformation date shall be considered realized at market prices and shall be written off. (3) When determining the tax financial result, the accounting financial result shall be increased by the profit and decreased by the loss calculated as the difference between the market price of the a sset or liability and its accounting value as at the date of transformation. Those tax temporary difference s for the last tax period which relate to the asset or liability shall be recognized in accordance with the general legal procedure. Art. 66, paras. 1 and 2 shall apply to determining the tax financial result. (4) Paras. 2 and 3 shall not apply in the cases of transformation under the conditions of Sections II and III. Tax treatment of transformation by way of changing the legal form Art. 116. (1) Arts. 115 and 117 shall not apply to the cases of transformation by way of changing the legal form under Art. 264 of the Comme rcial Law. The newly established company shall assume the obligations to determine the tax financial result and to pay the corporate tax due for the whole year of transformation. (2) For tax purposes all those rights and obligations which arise from actions performed by the company under transformation both during the curren t period and during previous ones, including the transformations of the tax financial result, shall be regarded as being performed by the newly establi shed company. Tax treatment of transformation via transfer of pro perty to the single owner Art. 116a. (new 5 SG 110/07, in force from 01.01.20 08) (1) In case of transformation via transfer of property to the single owner according to Art. 265 of the Commercial Law all rights and obligations resulting from acts of the company unde r transformation during current or previous terms, including transformations of the tax financial resu lt, shall be considered performed by the sole entrepreneur. (2) The sole entrepreneur shall submit a tax statement on the corporate tax for the most recent tax term of the company under transformation under the order of Art. 117, Para 1 and shall deposit the tax within the term under Art. 117, Para 2. (3) After the transformation the sole entrepreneur shall deposit quarterly advance contributions in the year of transformation. (4) The sole entrepreneur may not transfer the tax losses, incurred by the company under transformation. (5) The sole entrepreneur may not recognize for tax purposes the unrecognised expenses for interests in the company under transformation resulting from the application of the weak capitalization regime. (6) The company under transformation shall not appl y Art. 115, Para 2 and 3. Declaring and paying the tax for the last tax perio d Art. 117. (1) (amend. and suppl. 5 SG 110/07, in fo rce from 01.01.2008) In the cases of termination of companies under transformation the newly established companies or the acquiring ones shall submit a tax return regarding the corporate tax for the last tax period of the company under transformation within a period of 30 days following the date of transformation. The return shall be submitted to the Territorial Directorate of the National Revenue Agency of the newly established or th e host company. In case of transformation in the form of division a return shall be submitted only by one of the newly established or host companies. (2) The corporate tax for the last tax period shall be paid by the newly established companies or the acquiring ones within a period of 30 days follo wing the date of transformation, after deducting the advance contributions made. (3) (new 5 SG 110/07, in force from 01.01.2008) Par a 1 and 2 shall apply also to cases of termination of the company under transformation according to Section II of the present Chapter. Advance contributions of acquiring companies or new ly established companies Art. 118. (1) After the transformation the acquirin g companies or the newly established companies shall make quarterly advance contributions in the year of transformation. (2) In the cases of transformation by way of changi ng the legal form under Art. 264 of the Commercial Law the newly established company shall make monthly advance contributions or quarterly ones in accordance with the general legal procedure, on the grounds of the tax financial result of the company under transformation. Carry0forward of a tax loss in the cases of transfo rmation and transfer of an enterprise Art. 119. (1) In the cases of transformation under the Commercial Law the acquiring companies or the newly established ones shall not be entitled to carry forward those tax losses which have been formed by the companies under transformation. (2) In the cases of selling an enterprise under Art . 15 of the Commercial Law the legal successor shall not be entitled to carry forward those tax losses which have been formed by the aliena tor. (3) Para. 1 shall not apply to the cases of transformation by way of changing the legal form under Art. 264 of the Commercial Law. Regulation of low0rate capitalization Art. 120. (1) In the cases of transformation under the Commercial Law the acquiring companies or the newly established ones shall not be entitled to recognize for tax purposes the unrecognized interest expenses of the companies under transformation, these expenses resulting from the application of the low5rate capitalization regime. (2) In the cases of selling an enterprise under Art . 15 of the Commercial Law the legal successor shall not be entitled to recognize for tax purposes the unrecognized interest expenses of th e alienator, these expenses resulting from the application of the low5rate capitalization regime. (3) Para. 1 shall not apply to the cases of transfo rmation by way of changing the legal form under Art. 264 of the Commercial Law. Expenses of carrying out the transformation Art. 121. (1) The accounting expenses the company u nder transformation has made in connection with the transformation shall not be recognized for tax purposes. The unrecognized expenses shall be recognized for tax purposes when determining the tax financial result of the acquiring company or the newly established company for the year in wh ich the transformation is carried out. (2) Where circumstances are present which determine that the transformation will not take place, those expenses of the companies under transformation which are referred to in para. 1 shall be recognized for tax purposes for the year in which t he said circumstances occur, providing that the requirements of this Law are met. Tax treatment in the cases of choosing an earlier date of transformation for tax purposes Art. 122. (1) (amend. and suppl. 5 SG 110/07, in fo rce from 01.01.2008) In the cases of choosing an earlier date of transformation for tax purposes under Art. 263g, para. 2 of the Commercial Law all the actions of the companies under transformation performed at the expense newly established companies or the acquiring ones in the period from the said date until the date of transformation for tax purposes shall be considered performed for taxation purposes by the companies under transformation. (2) (suppl. 5 SG 110/07, in force from 01.01.2008) In the cases under para. 1 all the accounting receipts and expenses, profits and losses accounted for by the newly established companies or the acquiring ones shall be recognized for tax purposes for the company under transformation. The said receipts and expenses, profits and losses shall not be recognized for tax purposes for the newly established companies or the acquiring ones. For th e purposes of the first and second sentence the account income and expenses, profits and losses shall be those, which would have been estimated by the company under transformation, if no earlier date has been fixed for account purposes under the order of Art. 263g, Para 2 of the Commercial Law. (3) When determining the tax financial result, the transformations resulting from the actions under para. 1 shall be made by the companies under transformation. Cooperative organizations and State0owned enterpris es Art. 123. The provisions of this Chapter regarding the transformation of commercial companies shall also apply to the cases of: 1. restructuring of cooperative organizations; 2. winding5up, closure or formation of State5owned enterprises within the meaning of Art. 62, para. 3 of the Commercial Law under the conditions of universal legal succession. Responsibility in the cases of transformation and r estructuring Art. 124. (1) In the cases of transformation of com mercial companies or restructuring of cooperative organizations the newly established companies/cooperative organizations or the acquiring ones shall bear joint responsibility for the tax liabilities of the companies or cooperative organizat ions under transformation up to the amount of the rights acquired. (2) In the cases of transfer of an enterprise under Art. 15 of the Commercial Law the legal successor shall bear joint responsibility for the tax liabilities of the alienator up to the amount of the rights acquired. (3) The rights acquired shall be assessed in accordance with the market prices. Section II. Specific Regime of Taxation in the Cases of Transfo rmation Scope Art. 125. (1) (amend. 5 SG 106/08, in force from 01 .01.2009) This Section shall apply to takeover, merger, split5up, separation, transfer of a separate activity and exchange of stocks and sha res within the meaning of Arts. 126 through 131 in whic h local companies and/or companies of another Member State of the European Union are involved. (2) (amend. 5 SG 106/08, in force from 01.01.2009) This Section shall also apply to the cases of restructuring of cooperative organizations, including ones of other Member States of the European Union where the conditions specified in this Section are present. Takeover Art. 126. (1) Takeover shall be any transformation in the course of which all of the following conditions are present: 1. all the assets and liabilities of one or more companies under transformation are transferred to an existing acquiring company, the companies under transformation being wound up without liquidation; 2. the shareholders or partners in the companies under transformation are issued stocks or shares in the acquiring company. (2) Takeover shall also be any transformation in wh ich all the assets and liabilities of the company under transformation are transferred to an acquiring company, the latter holding all the stocks or shares of the company under transformation, the latter being wound up without liquidation. Merger Art. 127. Merger shall be any transformation in the course of which all of the following conditions are present: 1. all the assets and liabilities of one or more companies under transformation are transferred to a newly established company, the companies under tr ansformation being wound up without liquidation; 2. the shareholders or partners in the companies under transformation are issued stocks or shares in the newly established company. Split0up Art. 128. Split5up shall be any transformation in t he course of which all of the following conditions are present: 1. (amend. 5 SG 110/07, in force from 01.01.2008) a ll the assets and liabilities of a company under transformation are transferred to two or more existing (host) or newly established companies, the company under transformation being wound up without liquidation; 2. the shareholders or partners in the company under transformation are issued stocks or shares in each of the existing or newly established compan ies in proportion to the stocks or shares held by the shareholders or partners in the company under trans formation. Separation Art. 129. Separation shall be any transformation in the course of which all of the following conditions are present: 1. (amend. 5 SG 110/07, in force from 01.01.2008) o ne or more of the separate activities of a company under transformation are transferred to two or more existing (host) or newly established companies, the company under transformation not being wound up and preserving at least one of the separate activities; 2. the shareholders or partners in the company under transformation are issued stocks or shares in each of the existing or newly established compan ies in proportion to the stocks or shares held by the shareholders or partners in the company under trans formation. Transfer of a separate activity Art. 130. (amend. 5 SG 110/07, in force from 01.01. 2008) Transfer of a separate activity shall be any transformation in the course of which one or more than one or all of the separate activities of a company under transformation are transferred to one or more existing (host) or newly established companies, and in return thereof the existing or newly established companies issue stocks or shares in favour of the company under transformation, and the latter is not wound up. Exchange of stocks and shares Art. 131. Exchange of stocks and shares shall be a transformation in the course of which all of the following conditions are present: 1. as a result of the transformation, the acquiring company holds more than one half of the shares with voting rights or more than one half of the stocks of the acquired company, or, if it already holds such portion in the capital, it acquires an additional part of the stocks or shares; 2. the shareholders or partners in the acquired com pany exchange their stocks or shares for stocks or shares in the acquiring company. Additional pecuniary payments and cases in which st ocks or shares are not issued Art. 132. (1) In the cases of takeover, merger, spl it5up, separation and exchange of stocks and shares, for the purpose of achieving an equivalent exchange, it shall be possible to make pecuniary payments to the shareholders or partners in the com panies under transformation or the acquired companies, these being payments at the amount of up to 10 percent of the par value of the stocks or shares issued as a result of the transformation. (2) (amend. 5 SG 110/07, in force from 01.01.2008) In the cases of takeover, division and separation it shall also be possible not to issue stocks or shares providing that the Commercial Law permits so. Issue of stocks or shares Art. 133. Within the meaning of this Chapter, issue of stocks or shares shall be present in the cases of provision of newly issued or owned stocks or shares in a newly established company, or an acquiring one, or a receiving one. Separate activity Art. 134. Separate activity shall be the aggregate of assets and liabilities of a company with which the company can carry out economic activity o f its own, the latter being independent from the organizational, functional and financial point of view. Companies under transformation Art. 135. Within the meaning of this Section, compa nies under transformation shall be: 1. a local company under transformation; 2. (amend. 5 SG 106/08, in force from 01.01.2009) a company under transformation from another Member State of the European Union; 3. (amend. 5 SG 106/08, in force from 01.01.2009) a business activity establishment within the country of a company under transformation from anot her Member State of the European Union. Receiving companies Art. 136. Within the meaning of this Section, recei ving companies shall be: 1. a local newly established company or an acquirin g company; 2. (amend. 5 SG 106/08, in force from 01.01.2009) a newly established company or an acquiring company from another Member State of the European Union; 3. (amend. 5 SG 106/08, in force from 01.01.2009) a business activity establishment within the country of the newly established company or the acq uiring company from another Member State of the European Union. A company from another Member State of the European Community Art. 137. (amend. 5 SG 106/08, in force from 01.01. 2009) Within the meaning of this Section, a company from another Member State of the European U nion shall be a company which meets all of the following conditions: 1. the legal form of the company is in accordance with Supplement No. 3; 2. (amend. 5 SG 106/08, in force from 01.01.2009) t he company is a local person for tax purposes in another Member State of the European Un ion, in accordance with the respective tax legislation and by virtue of a treaty with a third State on avoidance of double taxation the company i s not considered a local person for tax purposes in another State outside the European Union; 3. the profits of the company are taxed either with a tax under Supplement No. 4 or with another similar tax on profits, and the company is not entitled to choose it or to be exempt from taxation with the said tax. Legal succession Art. 138. For the purposes of this Section, in the cases of transformation all those rights and obligations which arise from the actions performed by the companies under transformation within the current period or during preceding periods and relate to assets and liabilities transferred under Art. 139, item 1, including the transformations in determinin g the tax financial result, shall be transferred to the acquiring companies. Assets and liabilities subject to transformation Art. 139. The assets and liabilities subject to transformation under this Section belong to the following categories: 1. assets and liabilities, the results of the utilization of which are considered, both before the transformation and after it, in determining the tax financial result under this Law; 2. assets and liabilities, the results of the utili zation of which were considered before the transformation in determining the tax financial res ult under this Law, and as a result of the transformation are no longer considered in determining the tax financial result under this Law; 3. assets and liabilities, the results of the utilization of which were not considered before the transformation in determining the tax financial res ult under this Law, and as a result of the transformation are considered in determining the tax financial result under this Law. Transferred assets and liabilities under Art. 139, item 1 Art. 140. (1) The accounting profits or losses that occur when assets and liabilities under Art. 139, item 1 are written off as a result of the transformation shall not be recognized for tax purposes . (2) Those tax temporary differences connected with assets and liabilities referred to in Art. 139, item 1 which have occurred prior to the transformat ion shall not be recognized for tax purposes at the time of transformation and shall be regarded as occurring in the acquiring companies. (3) Where, under the accounting legislation, an ass et or a liability is recognized for the acquiring company and the value thereof differs fro m the value prior to the transformation, the difference between the two values either shall form a tax temporary difference of a subsequent appraisal or shall be an amount by which the tax temporary di fference under para. 2 shall be revised. (4) (suppl. 5 SG 110/07, in force from 01.01.2008) The subsequent valuation reserve (revaluation reserve) for those assets under Art. 139, item 1 which are not tax amortizable assets sha ll be transferred by the company under transformation and shall be regarded as occurring in the acquiring company. The latter shall not apply Art. 45. Where the transferred reserve of the subsequent valuation (revaluation reserve) referred to in the first sentence was not accounted by the acquiring company, in the year of writing off the asset, to which the reserve is related, shall be increased the accounting financial result by the amount of the reserve, if the reserve has a positive value, respectively reduced the accounting financial result, if the reserve has a negative value. (5) (suppl. 5 SG 110/07, in force from 01.01.2008) The tax amortizable assets acquired under Art. 139, item 1 shall be recorded in the tax amortization plan of the acquiring company, their values being equal to the ones in the tax amortization plan of the company under transformation at the time o f transformation. A copy of the tax depreciation plan of the transforming company at the moment of transformation shall be delivered to the revenue authority together with the copy of the reference under Para 6. (6) (amend. 5 SG 110/07, in force from 01.01.2008) A reference report under Art. 141 shall be made on the transformation of each asset or liability under Art. 139, item 1. (7) (new 5 SG 110/07, in force from 01.01.2008) Whe re as a result of the transformation the host company estimates under the accountancy legislation assets and debts, which were not estimated by the company under transformation, the accounted inc ome and expense after the transformation related to these assets and debts shall not be recognized for tax purposes. Where the assets referred to in the first sentence are depreciable for accountancy purposes, they shall not be entered in the tax depreciation plan of the host company and no tax depreciation shall b e accrued for them. The accountancy profit, which has occurred at the host company as a result of the transformation, respectively the accounted recognized income related to the negative reputation, which has arisen, shall not be recognized for taxation purposes. (8) (new 5 SG 110/07, in force from 01.01.2008) Whe re an asset of the company under transformation was not recognized according to the accountancy legislation at the host company, the accountancy financial result shall be reduced by the asset in question, when determining the tax finan cial result of the host company for the year of transformation, including when determining the quarterly advance contributions. Where a debt of the company under transformation was not recognized under the accountancy legislation at the host company, the accounting financial result shall be increased by the value of the debt in question, when determining the tax financial result of the host company for the year of transformation, including when determining the q uarterly advance instalments. The tax temporary differences, which have occurred before transformation and are related to an asset or a debt referred to in the first or second sentence, shall be recognized a t the host company during the year of transformatio n under the general order of the law. (9) (new 5 SG 110/07, in force from 01.01.2008) Para 3, 6 and 8 shall not apply to: 1. tax depreciable assets; 2. assets and debts related to deferred taxes; 3. the reputation, where the the accountancy income and expenses estimated in relation to it are not recognized for tax purposes; 4. amounts, which are assets for the company under transformation, and debts for the host company; 5. amounts, which are debts for the company under t ransformation, and assets for the host company; 6. shares or quotas of the hos company, owned by the company under transformation; 7. own shares repurchased by the company under tran sformation; 8. subscribed but non5deposited capital of the company under transformation 9. assets and debts under Art. 139, Item 2. (10) (new 5 SG 110/07, in force from 01.01.2008) Pa ra 4 shall not apply to the reserve formed by subsequent valuations of financial assets and debts of the financial institutions, when the accountancy financial result was transformed under the order of Art. 97 with the profits and losses under the subsequent valuations in question. This reserve shall not be noted in the references under Art. 141. Reference reports on assets and liabilities under A rt. 139, item 1 Art. 141. (1) The reference report under Art. 140, para. 6 made by the companies under transformation shall contain the following information on each asset and liability as at the date of transformation: 1. type and designation; 2. accounting value; 3. tax temporary difference; 4. (new 5 SG 110/07, in force from 01.01.2008) rese rve from a subsequent valuation (revaluation reserve). (2) A copy of the reference report under para. 1 shall be submitted to the acquiring companies and the revenue body not later than the end of the month following the month of transformation. (3) In the cases under Art. 140, para. 3 a new refe rence report shall be made by the acquiring companies and a copy thereof shall be submitted to the revenue body together with the annual tax return. The reference report shall contain the following information on each asset and liability: 1. type and designation; 2. accounting value; 3. tax temporary difference before the transformati on; 4. tax temporary difference after the transformation, determined under Art. 140, para. 3; 5. (new 5 SG 110/07, in force from 01.01.2008) rese rve from a subsequent valuation (revaluation reserve). (4) Where, following the submission under para. 3, corrections under the accounting legislation are made in the values of the assets and liabilitie s as a result of the transformation, the acquiring company shall make a revised reference report. The latter shall be submitted to the revenue body not later than the end of the month following the month of occurrence of those circumstances which have necessitated the revision. (5) The reference reports under paras. 1 and 3 shal l contain data identifying the companies under transformation and the acquiring companies, a s well as the date of transformation and the court judgement on the entry thereof. (6) (new 5 SG 110/07, in force from 01.01.2008) The copies of the references referred to in this article and from the tax depreciation plan under Art. 140, Para 5 shall be submitted to the Territorial Directorate of the National Revenue Agency at the p lace of registration of the host companies on a magnetic or optical carrier, or in an electronic way. Transferred assets and liabilities under Art. 139, item 2 Art. 142. (1) (amend. 5 SG 106/08, in force from 01 .01.2009) The accounting profits or losses that occur when assets and liabilities under Art. 139, item 2 are written off in connection with a bus iness activity establishment of a local person in another Member State of the European Union shall not be recognized for tax purposes. (2) Those tax temporary differences which are conne cted with assets and liabilities referred to in para. 1 shall not be recognized for tax purposes at the time of transformation, neither shall they be recognized in the subsequent years. (3) Except for the cases under para. 1, for tax pur poses the assets and liabilities present at the time of transformation under Art. 139, item 2 shall be regarded as realized at market prices and shall be written off. (4) In the cases under para. 3, when determining th e tax financial result, the accounting financial result shall be increased by the profit and decreased by the loss calculated as the differen ce between the market price of the asset or liability and its accounting value as at the date of transformation. Those tax temporary differences for the last tax period which relate to the asset or liability shall be recognized in accordance with the general legal procedure. Art. 66, paras. 1 and 2 shall apply to determining the tax financial result. Transferred assets and liabilities under Art. 139, item 3 Art. 143. (1) For tax purposes the assets referred to in Art. 139, item 3 shall be evaluated by the acquiring companies in accordance with the value th ereof determined under the national accounting legislation. (2) The taxable amortizable assets referred to in Art. 139, item 3 shall be recorded in the tax amortization plan in accordance with the general legal procedure. Carry0forward of tax losses Art. 144. (1) In the course of transformation under this Section the acquiring companies shall not be entitled to carry forward those tax losses w hich have been formed by the companies under transformation. (2) (amend. 5 SG 106/08, in force from 01.01.2009) Para. 1 shall not apply to the cases of takeover or merger under this Section resulting in setting up a business activity establishment, within the country, of a company from another Member State of the European Union, if prior to the transformation the said company did not have a business activity establishment within the country. Tax losses of a business activity establishment Art. 145. (1) (amend. 5 SG 106/08, in force from 01 .01.2009) Those tax losses that have not been carried forward until the time of transformation and have been formed by a business activity establishment of a local company in another Member State of the European Union shall not be deducted. (2) (amend. 5 SG 106/08, in force from 01.01.2009) When determining the tax financial result, the accounting financial result shall be increased by the transferred tax losses at the time of transformation, these losses being formed by the business activity establishment of a local company in another Member State of the European Union, providi ng that the said losses have not been deducted from the profits of the business activity establishment. Regulation of low0rate capitalization Art. 146. (1) In the cases of transformation under this Section the acquiring companies shall not be entitled to recognize for tax purposes the unrec ognized interest expenses of the companies under transformation, these expenses resulting from the application of the low5rate capitalization regime. (2) (amend. 5 SG 106/08, in force from 01.01.2009) Para. 1 shall not apply to those cases of takeover or merger under this Section as a result of which a business activity establishment is set up within the country of a company from another Member State of the European Union, and prior to the transformation the said company did not have a business activity establishment within the country. Advance contributions on the part of acquiring comp anies Art. 147. (1) Following the transformation under th is Section, the acquiring companies shall make quarterly advance contributions throughout the year of transformation. (2) In the cases referred to in Art. 144, para. 2 the acquiring companies shall make monthly or quarterly advance contributions under the general l egal procedure, on the grounds of the tax financial result of the companies under transformation. Write0off of a share Art. 148. (1) In those cases where an acquiring com pany holds a share in the capital of a company under transformation, the accounting profits or losses relating to the write5off of the share in the capital shall not be recognized for tax purpose s. (2) The income under para. 1 shall not be subject t o taxation withheld at the source under the procedure set forth in Part Three. Tax treatment of shareholders or partners in compan ies under transformation and acquired companies Art. 149. (1) The accounting profits or losses occu rring for shareholders or partners in companies under transformation or acquired companies as a result of the acquisition of stocks or shares in acquiring companies shall not be recognized for tax purposes in the year in which they are accounte d for and shall form tax temporary difference of subsequent appraisal. (2) Those tax temporary differences occurring for s hareholders or partners prior to the transformation which are connected with the written5off stocks or shares in the companies under transformation or the acquired companies shall not be recognized for tax purposes at the time of transformation. (3) The tax temporary differences under paras. 1 and 2 shall be regarded as occurring with regard to the newly acquired stocks or shares and shall be recognized for tax purposes in accordance with the general legal procedure. (4) The income that has been realized by those foreign legal entities which are shareholders or partners in local companies under transformation or local acquired companies as a result of the acquisition of stocks or shares following a transformation shall be taxed or exempt from taxation at t he source as at the date of transformation under the general legal procedure. (5) The tax at the source under para. 4 shall be due by the shareholder or partner in cases of any disposal of the newly acquired stocks or shares and shall be payable within 60 days following the disposal. (6) (amend. 5 SG 110/07, in force from 01.01.2008) It is until 31 January of the respective year that the foreign legal entities under paras. 4, 5 and 8 shall submit a declaration with the territoria l directorate of the National Revenue Agency stating they have not disposed of the stocks or shares newly acquired as a result of the transformation. The persons submit a declaration under the first sentence each year until the year of disposal of the newly acquired stocks or shares. (7) Where the declaration referred to in para. 6 is not submitted in due time, apart from the respective administrative sanction, for the purposes of this Law it shall also be assumed that the foreign legal entity has disposed of the newly acquired sto cks or shares. (8) (new 5 SG 110/07, in force from 01.01.2008) Sha ll not be treated as profit gained by a foreign legal person any acquisition of shares or quotas as a result of a transformation in form of a separation, except in case of separation, where shares of the company under transformation are being annulled. For the purpose of estimating the tax at the source, in case of a subsequent disposition of the shares or quotas referred to in the first sentence their documentary proved price of acquisition shall be zero. Taxation of a company under transformation in the c ases of transfer of a separate activity Art. 150. (1) Those accounting profits or losses of a company under transformation which have occurred as a result of the transfer of a separate activity shall not be recognized for tax purposes i n the year in which they are accounted for and shall form a tax temporary difference of subsequent appraisal. (2) The tax temporary difference referred to in par a. 1 shall be regarded as occurring with respect to the newly acquired stocks or shares and shall be recognized for tax purposes in accordance with the general legal procedure. (3) In those cases where the stocks or shares refer red to in para. 1 have been held by the company under transformation for a period of at lea st 5 years without interruption, the tax temporary difference under para. 1 shall not be recognized for tax purposes at the time of transformation, neither shall it be recognized for tax purposes in the subsequent years. Tax evasion Art. 151. The provisions of this Section shall not apply where the transformation is aimed at tax evasion or tax avoidance. Tax evasion is also presu med where the transformation either has no economic motivation or conceals disposal of assets. Section III. Relocation of the Registered Office of a European C ompany or a European Cooperative Society Scope Art. 152. Within the meaning of this Chapter, reloc ation of the registered office of a European company or a European cooperative society shall be an operation in which: 1. (amend. 5 SG 106/08, in force from 01.01.2009) w ithout its being wound up and without a new legal entity being set up, the company relocates its registered office from the country to another Member State of the European Union, according to Ar t. 8 of Regulation (EC) No. 2157/2001 of the Council or according to Regulation (EC) No. 1435/20 03 of the Council, the company’s assets and liabilities being effectively connected with the business activity establishment within the country, a nd the results of the utilization of the said assets a nd liabilities being taken into consideration when determining the tax financial result, or 2. (amend. 5 SG 106/08, in force from 01.01.2009) w ithout its being wound up and without a new legal entity being set up, the company relocates its registered office from another Member State of the European Union into the country, according to A rt. 8 of Regulation (EC) No. 2157/2001 of the Council or according to Regulation (EC) No. 1435/20 03 of the Council, the business activity establishment’s assets and liabilities being effectively connected with the company within the country which has come into existence as a result of this operation, and the results of the utilization of the said assets and liabilities are taken into consideration when determining the tax financial result. Legal succession Art. 153. (1) For tax purposes, in those cases in w hich the registered office of a European company or a European cooperative society has been relocated under Art. 152, item 1: 1. all the actions performed by the company in the current and preceding periods, including the transformations of the tax financial result, shall be regarded as being performed by the business acti vity establishment; 2. the company shall not be taxed with corporate tax for the period starting from the beginning of the year until the date of the operation; 3. the business activity establishment shall be tax ed with corporate tax under the general procedure for the period starting from the beginnin g of the year, and the activity performed by the company in the year of the operation shall be regar ded as performed by the business activity establishment; 4. the business activity establishment shall have the right to carry forward those tax losses which have been formed by the company in accordance with the general procedure and have not been carried forward. (2) For tax purposes, in those cases in which the registered office of a European company or a European cooperative society has been relocated und er Art. 152, item 2: 1. all the actions performed by the business activity establishment in the current and preceding periods, including the transformations of the tax f inancial result, shall be regarded as being perform ed by the company; 2. the business activity establishment shall not be taxed with corporate tax for the period starting from the beginning of the year until the date of the operation; 3. the company shall be taxed with corporate tax un der the general procedure for the period starting from the beginning of the year, and the activity performed by the business activity establishment in the year of the operation shall be regarded as performed by the company; 4. the company shall have the right to carry forwar d those tax losses which have been formed by the business activity establishment in accordanc e with the general procedure and have not been carried forward. Provisions applicable to the cases of relocation of the registered office Art. 154. The provisions of Section II of this Chap ter regarding the assets and liabilities, the profits and losses, and the tax temporary differences shall also apply to the cases of relocation of the registered office of a European company or a Europe an cooperative society. Chapter twenty . SPECIFIC RULES O DETERMIIG THE TAX FIACIAL RES ULT I THE CASES OF TRASFERS BETWEE THE BUSIESS ACTIVITY ESTABLISHME T WITHI THE COUTRY AD AOTHER PART OF THE SAME ESTABLISHMET LOCATED OUTSIDE THE COUTRY Revenues from a transfer to another part of the est ablishment Art. 155. (1) Those accounting receipts accounted f or in accordance with their market price which have occurred as a result of a transfer from a business activity establishment within the countr y to another part of the same establishment located outs ide the country shall be recognized for tax purposes in those cases where: 1. the specific transfer complies with the customary transactions of the said business activity establishment, these transactions being oriented to third persons, or 2. the customary activity of the said business activity establishment consists of similar transfers to the other parts of the establishment. (2) The accounting receipts resulting from financia l means granted by the business activity establishment to another part of the same establish ment located outside the country shall not be recognized for tax purposes, with the exception of those financial institutions for which the raising of financial means and the lending of credits constitu tes a basic activity. (3) The accounting expenses relating to a transfer from the business activity establishment to another part of the same establishment located outs ide the country shall not be recognized for tax purposes in those cases where, as a result of the transfer, no accounting receipts recognized for tax purposes occur in the business activity establishment. In those cases where, as a result of the transfer to another part of the same establishment located outs ide the country, the business activity establishment assesses accounting receipts at the amount of the e xpenses actually incurred (the cost value), the accounting expenses relating to the transfer that have been assessed shall be recognized for tax purpo ses. Expenses in the cases of transfer from another part of the establishment Art. 156. (1) Those accounting expenses, accounted for at their market value, which are connected with goods, services and rights and result from a transfer from another part of the same establishment located outside the country shall be recognized for tax purposes in the business activity establishment within the country, providing that th e expenses have been accounted for within the customary activity of the business activity establishment in connection with the realization of the transferred goods, services or rights in their modified or unmodified form. (2) Those accounting expenses, accounted for at the ir market value, which result from a transfer of goods and services from another part of the same establishment located outside the country to a business activity establishment within the country shall be recognized for tax purposes in the busines s activity establishment in those cases where: 1. the specific transfer complies with the customary transactions of the said part of the business activity establishment, these transactions being oriented to third persons, or 2. the customary activity of the said part of the b usiness activity establishment consists of similar transfers to the other parts of the establishment. (3) Those accounting expenses, accounted for at the amount of the expenses actually incurred (the cost value), which result from a transfer of services from another part of the same establishment located outside the country, except for the cases u nder paras. 1 and 2, shall be recognized for tax purposes in the business activity establishment within the country. The first sentence shall also apply to those administrative and managerial services which are directly connected with the activity of the business activity establishment. (4) Those accounting expenses, accounted for at the amount of the expenses actually incurred (the cost value), which result from a transfer of rights relating to know5how, patents and other objec ts of intellectual or industrial property, from another p art of the same establishment located outside the country, except for the cases under para. 1, shall be recognized for tax purposes in the business acti vity establishment within the country. The accounting ex penses, accounted for at their market value, shall be recognized for tax purposes in those cases where th e said objects have been produced or acquired by th at part of the establishment which is specialized in creating them or acquiring them. (5) Where the rights transferred under para. 4 meet the criteria regarding fixed intangible assets, the expenses of their acquisition under para. 4 shall not be recognized for tax purposes and the amoun ts shall be recorded in the tax amortization plan. The tax amortizable value thereof shall be determined in accordance with the general procedure of the law. (6) The accounting expenses resulting from financial means received in the business activity establishment from another part of the same establi shment located outside the country shall not be recognized for tax purposes, with the exception of: 1. the financial institutions for which the raising of financial means and the lending of credits constitutes a basic activity, or 2. the cases in which the financial means have been lent by a third person as an interest5bearing loan for the purposes of the business activity establishment and are exclusively used in the activity of the business activity establishment; in this case the e xpenses accounted for at the amount of the interest payments due to the third person shall be recognize d for tax purposes, providing that the other provisions of this Law are observed. Treatment of assets in the cases of transfer from o r to another part of the establishment Art. 157. (1) Those assets granted to the business activity establishment within the country by another part of the same establishment located outs ide the country which are not connected with the activity of the business activity establishment, except for the cases under Art. 156, para. 1, shall b e assessed for tax purposes in accordance with the am ount of the expenses actually incurred (the cost value) by that part of the enterprise which transfers them. Those tax amortizable assets under the fir st sentence which have been used in the activity of th e business activity establishment for a period of at least two years shall be recorded in the tax amorti zation plan of the business activity establishment in accordance with the general legal procedure. (2) Where the tax amortizable assets under para. 1 are granted for temporary use for a period of up to two years, the business activity establishmen t within the country shall have recognized thereto for tax purposes the accounting expenses at the amount of the assets amortizations assessed by that part of the establishment which transfers them. The assesse d expenses shall not exceed the annual tax amortization that would have been assessed if the m aximum values of the tax amortization rates allowable under Art. 55 had been used. (3) For tax purposes, in the cases of transfer of assets produced or acquired by the business activity establishment within the country to anothe r part of the same establishment located outside the country the transferred assets shall be regarded as realized at the time of transfer at their market prices and shall be written off. (4) When determining the tax financial result in th e cases under para. 3, the accounting financial result of the business activity establishment shall be increased by the profit and decreased by the loss calculated as a difference between the market price of the asset and its accounting value as at the date of transfer. Those tax temporary differences w hich relate to the asset shall be recognized in accordance with the general legal procedure. Art. 66, paras. 1 and 2 shall apply to determining the tax financial result. (5) Paras. 3 and 4 shall not apply where the transf er of assets results in accounting receipts (profits) or expenses (losses). It is the general legal procedure that shall apply to those cases. Chapter twenty one. TAX REGULATIO I THE CASES OF WIDIG0UP THROUGH L IQUIDATIO OR DECLARIG BAKRUPTCY AD I THE CASES OF DISTRIBUTIO OF A LIQUIDATIO SHARE Section I. General Provisions General provisions Art. 158. In the cases of winding5up through liquidation or declaring bankruptcy, throughout the period prior to his being deleted the taxable person shall perform his obligations in accordance w ith the general procedure set forth in this Law and in observance of the requirements specified in this Chapter, including the submission of the respective financial statements prepared and submitted according to the accounting legislation. Section II. Corporate Tax in the Cases of Winding0Up Determining the tax in the cases of winding0up Art. 159. (1) Corporate tax shall be due as at the date of entering the winding5up into the Commercial Register. (2) The corporate tax referred to in para. 1 shall be determined on the grounds of the tax profit for the period from the beginning of the year until the date of registering the winding5up. (3) When determining the tax, there shall be deduct ed the advance contributions paid within the period from the beginning of the year until the date of registering the winding5up. Paying the tax in the cases of winding0up Art. 160. (1) The corporate tax due under Art. 159 shall be paid within 30 days following the date of registering the winding5up. (2) In the cases of winding5up the corporate tax paid shall be deducted either from the annual corporate tax due for the year of winding5up or from the corporate tax due for the last tax period if the date of filing the request for winding5up through l iquidation, or the date of deletion in case of bankruptcy, respectively, is in the year of winding5up. (3) Where the date of winding5up and the date of fi ling the request for deletion in case of liquidation, or the date of deletion in case of bankruptcy, respectively, are in different years, the annual tax return for the year of winding5up shall be acco mpanied by the financial statement prepared as at t he date of winding5up and by the financial statement p repared as at 31 December of the year of the taxable person’s winding5up. Section III. Corporate Tax for the Last Tax Period Last tax period Art. 161. (1) The last tax period of a taxable pers on wound up through liquidation shall start on 1 January of the year in which the request for dele tion under Art. 273, para. 1 of the Commercial Law is filed and shall end on the date of filing the request. (2) The last tax period of a taxable person wound u p through being declared bankrupt shall start on 1 January of the year in which the deletion is carried out and shall end on the date of the deletion. (3) The last tax period of a foreign person’s busin ess activity establishment shall start on 1 January of the year in which its activity is suspended and shall end on the date of the suspension. (4) (new 5 SG 95/09, in force from 01.01.2010) The last tax period of non5personified company or social insurance office shall cover the period from 1 January of the year, when the suspension has taken place to the date of the suspension. (5) (prev. par. 4 5 SG 95/09, in force from 01.01.2 010) The taxable person shall be taxed with corporate tax on the tax profit realized in the las t tax period, in accordance with the general legal procedure. The corporate tax due shall be final. (6) (prev. par. 5 5 SG 95/09, in force from 01.01.2010) For tax purposes, the assets produced or acquired by the business activity establishment within the country until the date of winding5up shall be regarded as realized at the time of winding5up at t heir market prices and shall be written off. When determining the tax financial result of the business activity establishment for the last tax period, the accounting financial result shall be increased by t he profit and decreased by the loss calculated as t he difference between the market price of the assets under the first sentence and their accounting value as at the date of transformation. Those tax temporary dif ferences which relate to the asset shall be recognized for the last tax period in accordance with the gene ral legal procedure. Art. 66, paras. 1 and 2 shall apply to determining the tax financial result. Declaring the tax for the last tax period Art. 162. (1) The tax return for the last tax perio d determined in accordance with Art. 161, para. 1 shall be submitted on the date of submission of t he request for deletion together with a copy thereo f. (2) The tax return for the last tax period determin ed in accordance with Art. 161, para. 2 shall be submitted by the person holding the position of trustee in bankruptcy within 30 days following the date of deletion of the taxable person, together with a copy of the court decision on deletion. (3) The tax return for the last tax period determin ed in accordance with Art. 161, para. 3 shall be submitted on the date the activity is suspended. (4) (new – SG 95/09, in force from 01.01.2010) The tax return for the last tax period, determined pursuant to Art. 161, par. 4, shall be submitted on the date of suspension. (5) (prev. par. 4 5 SG 95/09, in force from 01.01.2 010) Where the date of filing the request for deletion in case of liquidation, or the date of deletion in case of bankruptcy or suspension of the ac tivity of a business activity establishment, respectively, is prior to 31 March and the annual tax return for the preceding year has not been submitted yet, the taxa ble person or the person holding the position of trustee in bankruptcy shall submit the said tax return within the terms under paras. 1, 2 and 3. (6) (prev. item 5 5 SG 95/09, in force from 01.01.2 010) Where the date of winding5up and the date of filing the request for deletion in case of liquidation, or the date of deletion in case of ban kruptcy, respectively, are in one and the same year, the tax return referred to in paras. 1 and 2 shall be accompanied by the financial statement prepared as at the date of winding5up and by the financial statement prepared as at the date of filing the request for deletion, or the date of deletion, respectively. Paying the tax for the last tax period Art. 163. (1) The corporate tax due for the last ta x period, this tax being determined under Art. 161, para. 1, shall be payable until the date of filing the request for deletion of the taxable person . The tax shall be final. (2) In the cases referred to in Art. 161, para. 2 the corporate tax due for the last tax period shall be payable until the date of deletion. (3) In the cases referred to in Art. 161, para. 3 the corporate tax due for the last tax period shall be payable until the date of suspension of the acti vity. The tax shall be final. (4) (amend. 5 SG 95/09, in force from 01.01.2010) I n cases under Art. 161, par. 4 the due corporate tax for the last tax period shall be deposited by the date of suspension. The tax is final. (5) (new 5 SG 95/09, in force from 01.01.2010) Wher e the date of filing of the request for deletion in case of liquidation, the date of deletion in case of bankruptcy, the date of suspension of the activity in the place of business or the date of suspension of a non5personified company or a social insurance office is prior to 31 March and the corporate tax for the preceding year has not been paid yet, the taxable person shall pay the corporate tax for the preceding year within the terms under par. 1 – 4. Tax treatment in cases in which a taxable person wo und up through liquidation continues the activity after the date of filing the request for deletion Art. 164. (1) A taxable person wound up through liq uidation continues the activity after the date of filing the request for deletion shall perform his obligations in accordance with the general l egal procedure for the period from the date of filing th e request for deletion until the date of deletion, including the obligation to declare and pay the corporate tax due. The liquidator and the taxable person shall bear joint responsibility for those tax liabilities of the latter which have arisen in connectio n with the continuance of the activity. (2) In the cases referred to in para. 1 the last tax period shall start on 1 January of the year in which the deletion is carried out and shall end on the date of deletion, or shall start on the date of filing the request for deletion and shall end on the date of deletion where these two dates are in one and th e same year. (3) The taxable person shall be liable for corporate tax on the tax profit realized in the last tax period under para. 2 in accordance with the general legal procedure. The tax shall be final. (4) In the cases referred to in para. 1 the tax return shall be submitted by the person holding the position of liquidator, within 30 days following th e date of deletion of the taxable person, accompani ed by a copy of the court decision on deletion. Where the date of deletion is prior to 31 March and the annual tax return for the preceding year has not been filed yet, the person who has held the position of liquidator shall submit this tax return within the time limits specified in the first sentence. (5) In the cases referred to in para. 1 the corpora te tax due for the last tax period shall be payable until the date of deletion. Where the date of deletion is prior to 31 March and the corporate tax for the preceding year has not been paid yet, the t axable person shall pay the corporate tax for the preceding year within the terms under the first sentence. Tax treatment in the cases of distribution of a liq uidation share Art. 165. (1) For tax purposes the assets distribut ed as a liquidation share shall be regarded as realized by the taxable person at the time of distribution at their market prices and shall be written off. (2) In the cases referred to in para. 1, when deter mining the tax financial result, the accounting financial result shall be increased by the profit a nd decreased by the loss calculated as a difference between the market price of the assets and their accounting value as at the date of distribution of the liquidation share. Those tax temporary differences which relate to the assets shall be recognized in accordance with the general legal procedure. Art. 66, paras. 1 and 2 shall apply to determining the tax financial result. (3) Those accounting receipts and expenses which ar e accounted for in connection with the distribution of the liquidation share in the form of assets shall not be recognized for tax purposes. Chapter twenty two. ABATEMET, ASSIGMET AD EXEMPTIO FROM TAXATIO W ITH CORPORATE TAX Section I. General Provisions otion of assignment Art. 166. Assignment of corporate tax shall be the taxable person’s right not to pay into the central budget those amounts of the corporate tax d etermined under this Law which remain in the patrimony of the taxable person and are used for purposes determined by law. General requirement regarding assignment or abateme nt of corporate tax Art. 167. (1) The corporate tax shall be assigned o r abated under this Chapter, and the accounting financial result shall be decreased when determining the tax financial result, providing that as at 31 December of the respective year the taxable person has no: 1. public liabilities subject to enforcement, or 2. sanctions under effective penalty warrants conne cted with violations of statutory instruments relating to public liabilities, or 3. interest relating to nonpayment in due time of the liabilities under items 1 and 2. (2) The fulfilment of the requirement under para. 1 shall be certified by the taxable person in his tax return. Accounting the corporate tax that has been assigned or abated Art. 168. (1) The corporate tax that has been assig ned or abated under this Chapter shall be accounted for in the equity. (2) (revoked 5 SG 110/07, in force from 01.01.2008) Recognition of a part of the non0distributable rece ipts or expenses Art. 169. (1) The part of the non5distributable rec eipts or expenses which corresponds to those activities for which the assignment of the corporat e tax is enjoyed shall be determined by multiplying the aggregate of the non5distributable receipts or expenses by the ratio of the net receipts from sale s from the activities for which the assignment is enjoyed to all the net receipts from sales. (2) Where the non5distributable amounts with which the accounting financial result is transformed are not attributable to a separate activity only and are connected with the performance of an activity for which assignment is enjoyed, the said amounts shall be allotted to the activity for which the corporate tax is assigned, the tax financial result for this activity being determined on the grounds of the ratio referred to in para. 1. Declaring assigned or abated corporate tax Art. 170. Where a taxable person’s corporate tax is assigned or abated on various grounds under this Chapter, the taxable person shall be obligated to declare in his tax return the succession in which he has enjoyed the various grounds for assign ment or abatement of the corporate tax. Assignment of an additionally established corporate tax Art. 171. (1) A taxable person whose corporate tax for a year in the past was assigned is entitled to assignment of an additionally established undeclared corporate tax for the same year providing that he fulfils all the requirements of this Chapter regarding the respective assignment of corporate tax. (2) The term for the fulfilment of the said require ments commences on the date on which the additional corporate tax is established. Suspension of the right to assignment Art. 172. (1) The right to abatement or assignment under this Chapter shall be suspended in the cases of transformation of the taxable person, with the exception of transformation by way of changing the legal form under Art. 264 of the Commercial Law , and transfer of an establishment under Art. 15 of the Commercial Law. (2) Para. 1 shall also apply to the restructuring of cooperative organizations. onfulfilment of requirements Art. 173. (1) Where the requirements regarding subs equent use (spending) of assigned corporate tax have not been fulfilled, the latter is due for the respective year, in accordance with t he general legal procedure. (2) Para. 1 shall not apply to those cases of transformation in which the acquiring or newly established companies perform the liabilities of th e companies under transformation in observance of those conditions and procedure set forth in this Chapter which concern the companies under transformation. In the cases under the first sentence the acquiring or newly established companies sha ll be jointly answerable for the assigned corporate tax of the companies under transformation. (3) Para. 2 shall also apply to the restructuring of cooperative organizations. Section II. Exemption from Taxation with Corporate Tax Collective investment schemes and closed0type inves tment companies Art. 174. Those collective investment schemes which are admitted to being offered to public at large in the Republic of Bulgaria, and the licensed closed5type investment companies under the Law on Public Offer of Securities shall not be liable for corporate tax. Companies of a special investment purpose Art. 175. The companies of a special investment pur pose under the Law on the Companies of a Special Investment Purpose shall not be liable for corporate tax. Bulgarian Red Cross Art. 176. The Bulgarian Red Cross shall not be liab le for corporate tax. Section III. General Tax Relief Tax incentives in the cases of employing unemployed persons Art. 177. (1) When determining his tax financial re sult, the taxable person shall be entitled to abate his accounting financial result providing that he has employed a person under an employment contract for at least 12 consecutive months and at the time of his being employed, the said person: 1. has been registered as an unemployed person for more than a year, or 2. is a registered unemployed person aged 50 or mor e, or 3. is an unemployed person of reduced capacity for work. (2) The abatement concerns the amounts paid as remu neration and the contributions paid at the expense of the employer in the State Social Insurance Fund and the National Health Insurance Fund for the first 12 months of the employment. The abatemen t is enjoyed once in the year in which the 12 months’ period expires. (3) The abatement shall not concern the amounts received under the Employment Promotion Law. (4) (revoked 5 SG 106/08, in force from 01.01.2009) Enterprises employing disabled persons Art. 178. (1) The corporate tax shall be totally as signed to those legal entities5 specialized enterprises or cooperative societies within the meaning of the Law on the Integration of the disabled which as at 31 December of the respective year are members of the national representative organization s of disabled people and for disabled people, and in which at least: 1. twenty percent of the total number of staff are people of poor eyesight, or 2. thirty percent of the total number of staff are people of poor hearing, or 3. fifty percent of the total number of staff are p eople suffering from other impairments. (2) In those cases where the requirements under par a. 1 regarding the number of the employed persons have not been fulfilled, the corporate tax of the legal entities referred to in para. 1 shall be assigned in proportion either to the number of people suffering from impairments, or to the number of people with reduced capacity for work reassigned to suitable jobs, versus the total number of staff. (3) The assignment shall be allowable where the ass igned tax is spent only on the integration of the disabled people or on maintaining and creating new jobs for people with reduced capacity for work who should be reassigned to suitable jobs within a period of two years following the year for which th e assignment is enjoyed. The planning, spending and a ccounting for the financial means shall be carried out by way of Ordinances of the national organizati ons of disabled people, in coordination with the Minister of Finance. Agricultural products Art. 179. (revoked 5 SG 95/09, in force from 01.01. 2010) Air Transport Directorate Art. 180. (revoked 5 SG 95/09, in force from 01.01. 2010) Social and health insurance funds Art. 181. (1) There shall be assigned 50 percent of the corporate tax due by the social and health insurance funds, created by virtue of law, on activity that is either directly connected with or helpful to the performance of their basic activity. (2) The assignment shall be allowable in those case s where the assigned tax is invested in the basic activity not later than the end of the year following the year for which the assignment is enjoy ed. Section IV. De Minimis or Regional State Aid in Form of Tax Rel ief (Title amend. 0 SG 110/07, in force from 01.01.2007) Taxable persons that may not enjoy tax relief Art. 182. (1) (prev. text of Art. 182, amend. 5 SG 110/07, in force from 01.01.2007) The tax relief under this Section shall not be enjoyed by those taxable persons which: 1. carry on activities in the branches of coal mini ng, steel manufacture, shipbuilding, synthetic fibres manufacture, fish industry, as well as the p roduction of those agricultural products which are specified in Supplement 1 of the Treaty establishin g the European Community, with regard to the respective activity, or 2. (amend. 5 SG 110/07, in force from 01.01.2007) a re parties to liquidation or rehabilitation proceedings, or 3. are defined as establishments in a difficult position. (2) (new 5 SG 110/07, in force from 01.01.2007) Tax relief in form of de minimis aid shall not apply to: 1. taxable persons engaged in the sector of fishery and aquacultures according to Council Regulation (EC) No 104/2000 of 17 December 1999 on the common organisation of the markets in fishery and aquaculture products; 2. taxable persons carrying out primary production of agricultural products under ANNEX I of the Treaty Establishing the European Community; 3. taxable persons carrying out processing and mark eting of agricultural products under ANNEX I of the Treaty Establishing the European Community; 4. taxable persons engaged in the sphere coal production according to Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the co al industry; 5. undertakings in difficulties; 6. investment in trucks, when provided to a taxable person, carrying out road transportation of loads for other people, or provided against a remuneration; 7. investment in assets, used for activities, related to export to third countries or Member States. (3) (new 5 SG 110/07, in force from 01.01.2007) A t ax relief in form of state aid for regional development may not be granted also to a taxable pe rson in respect of whom any of the conditions referred to in Para 1 have arisen during the period of performing the initial investment. (4) (new 5 SG 110/07, in force from 01.01.2007) A t ax relief in form of minimal aid may not be granted to also a taxable person in respect of whom any of the conditions referred to in Para 2 have arisen during the investment period. (5) (new 5 SG 95/09, in force from 01.01.2010) A ta x relief in the form of a state aid for agricultural producers, shall not apply to enterprises with difficulties. Municipalities in which the unemployment rate is hi gher than the country’s average unemployment rate Art. 183. (1) Those municipalities in which the une mployment rate is 35 percent or more above the country’s average unemployment rate shall be de termined annually by way of an Ordinance of the Minister of Finance at the suggestion of the Minist er of Labour and Social Policy, and the said Ordinance shall be promulgated in the State Gazette. (2) (revoked 5 SG 95/09, in force from 01.01.2010). (3) (amend. 5 SG 95/09, in force from 01.01.2010) A municipality the administrative centre of which is also a centre of another municipality shall be included in the list referred to in paras. 1 on the grounds of the weighted average rate of unemploymen t in the respective municipalities, this weighted average rate being determined on the grounds of the number of the economically active population therein. Tax relief in the cases of carrying out production activities in municipalities in which the unemployment rate is higher than the country’s aver age unemployment rate Art. 184. (amend. 5 SG 110/07, in force from 01.01. 2007) The corporate tax on tax profit shall be assigned in amount of up to 100 per cent in thos e cases where the taxable person carries out production activities, including work done with materials supplied by the customer, and all of the following conditions are present: 1. the taxable person carries out production activities only in municipalities in which in the year preceding the current year the unemployment rate wa s at least 35 percent higher than the country’s average unemployment rate for the said period; 2. (amend. 5 SG 110/07, in force from 01.01.2007) the conditions under: a) Arts. 188 – in cases of de minimis aid, or b) Art. 189 – in cases of state aid for regional development. Specific cases of assignment Art. 185. (1) Where, as a result of an increased em ployment rate, the municipality falls off the list of the municipalities referred to in Art. 183, the person that has acquired the right to assignme nt of the corporate tax shall preserve that right for the next 5 consecutive years, this period commencing f rom the year in which the municipality falls off the list, providing that the other conditions for assignm ent are present. (2) Where a taxable person fulfilled the conditions under Art. 184, item 1 in the year preceding the year in which the municipality falls off the list of municipalities referred to in Art. 183, but did not carry out production activities at that time becaus e of doing preparatory works, and the production activity starts next year, the right to tax assignment accrues in the year in which production activit y is started and the said right is preserved for the next 4 consecutive years providing that the other cond itions for assignment are present. Investment tax input Art. 186. (amend. 5 SG 110/07, in force from 01.01. 2007; revoked 5 SG 95/09, in force from 01.01.2010) Tax relief for cooperative societies Art. 187. (1) (suppl. 5 SG 110/07, in force from 01 .01.2007) Up to 60 percent is the assignment of the corporate tax due by the cooperative societies and those enterprises established by them which are members of cooperative unions within the meaning of Chapter Four of the Law on Cooperative Societies, providing that the conditions for de minimis aid under Arts. 188 are present. (2) The cooperative societies and the enterprises e stablished by them shall transfer 50 percent of the assigned corporate tax to the investment funds of the cooperative unions within the time limits for contributing the tax to the budget. (3) Prior to 31 March each year the cooperative uni ons shall report to the Ministry of Finance the targeted spending of the assigned corporate tax. Where it is established that the conditions regarding assignment are not fulfilled, the cooperative union s shall contribute to the central budget the amount of the assigned tax they have received plus the respective interest thereon. Tax relief in form of de minimis aid (Title amend. 0 SG 110/07, in force from 01.01.2007) Art. 188. (amend. 5 SG 110/07, in force from 01.01. 2007) (1) (amend. 5 SG 106/08, in force from 01.01.2009) There shall be a state relief in form of de minimis aid, when the amount of the de minimis aid granted to the taxable person in the course of the last three years including the current one, regardless of their form and source, does not excee d the BGN equivalent of EUR 200 000, and in respect of taxable persons involved in the road transport s ector – the BGN equivalent of EUR 100 000, determined in accordance with the official exchange rate of the BGN towards the EUR. These thresholds shall apply irrespective of whether the aid is fully or partially financed with funds of the European Union. The amount of the granted de minimis aid sha ll include also the abated or assigned corporate tax of the taxable person for the last three years incl uding the corporate tax subject to abatement or assignment for the current year. The amount of the granted de minimis aid shall not include the assigned corporate tax, in respect of which have been fulfilled the conditions of Art. 189. (2) The assigned tax referred to in Art. 184 and th e portion of the assigned tax under Art. 187, which has not been deposited in the investment fund s of the cooperative unions, shall be invested in long5term tangible or intangible assets according to the accounting legislation within 4 years from th e beginning of the year for which the tax has been assigned. (3) (amend. 5 SG 95/09, in force from 01.01.2010) T he assigned tax, invested in the assets referred to in Para 2, shall accumulate to other state aid, approved in decision of the European Commission or admitted under Art. 9 of the State Ai d Law in respect of the specified assets, by the maximum allowed intensity of the aid, specified in a National regional State aid map (OJ, C 73 from 30 March 2007). (4) The taxable person shall declare the amount of granted de minimis aid for the last three years including the current year, regardless of their form and source, in the annual tax statement for the year of assignment of the corporate tax. Tax relief, which is state aid for regional develop ment (Title amend. 0 SG 110/07, in force from 01.01.2007) Art. 189. (amend. 5 SG 110/07, in force from 01.01. 2007) (1) The taxable persons shall have to fulfil the following requirements regarding the provision of state aid for regional development: 1. the assigned corporate tax shall be invested in tangible and intangible assets, which are part of a project for initial investment; 2. the initial investment shall be made within 4 years from the beginning of the year of assignment of the tax; 3. the initial investment shall be made in municipalities, where during the year of assignment the unemployment amounts to or exceeds 35 per cent more than the state average unemployment for the same period; 4. the activity related to the initial investment shall continue within the same municipality for at least 5 years from the year of completion of the in itial investment; this fact shall be stated annually by expiration of the 5 years term in the annual tax st atements; 5. at least 25 percent of the value of the tangible and intangible assets in the initial investment must be financed by way of the taxable person’s own means or borrowed ones; the assigned corporate tax and other means containing an element of State aid shall not be regarded as the taxable person’s own means or borrowed ones; 6. the tangible and intangible assets in the initia l investment must have been acquired under market economy conditions corresponding to those be tween unrelated parties; the intangible assets in the initial investment shall be depreciable assets; 7. the amount of the admissible expenses for intang ible assets in the initial investment shall not exceed 50 per cent of the amount of the admissible expenses for tangible and intangible assets in the initial investment; 8. the intangible assets in the initial investment shall be used inly in the activity of a taxable person and shall be part of its assets for a term of at least 5 years; 9. the assigned tax shall not exceed 50 per cent of the current value of the tangible and intangible assets in the initial investment, as established by 31 December of the year of assignment; for the purpose of determining the current value of the initial investment the interest rate shall be equal to the reference interest rate for the year of assignment determined by the European Commission; 10. the expected amount of the initial investment a nd the term of its performance shall be stated in the annual tax statement for the year of assignment of the corporate tax. (2) The assigned corporate tax shall accumulate to other state aid, approved in a decision of the European Commission or granted under Art. 9 of the State Aid Law for the same initial investment, by the maximum admissible intensity of the aid, determined in the National regional State aid map. (3) Where a tax relief has been granted to a large investment project, which was granted aid from all sources, the total amount of which exceeds the BGN equivalent of EUR 37,5 million, calculated according to the official exchange rate of the BGN towards the EUR, the state relief may be used durin g the specified year only if: 1. the taxable person has notified the revenue authority about the project before the beginning of its performance; 2. a positive decision was delivered by the Europea n Commission in response to a notification made under the order of Art. 88, Para 3of the Treat y Establishing the European Community. The Minister of Finance shall notify the European Commission according to the order and the procedures, established in the State Aid Law. The taxable person shall be obliged to provide to the Minister of Finance the information required to deliver a notification to the European Commission. (4) Where Para 3 shall not apply to a large investm ent project, the tax relief may be used, provided that the adjusted limit for regional aid for large investment projects has been complied with as defined in the European Commission Decision on appr oval of the National regional State aid map. (5) For the purposes of Para 3 the value of the aid and the value of the acceptable expenses for tangible and intangible assets in a large investmen t project shall be determined according to the current value at the date of notification of the European C ommission under the order of Art. 88, Para 3 of the Treaty Establishing the European Commission. For th e purposes of Para 4 the value of the aid and the value of the acceptable expenses for tangible and intangible assets in a large investment project shall be determined according to the value at the date the performance of the project has started. Art. 189a. (*) (new – SG 106/08, in force from 01.0 1.2009; revoked 5 SG 95/09, in force from 01.01.2010) Tax relief in the form of a state aid for agricultural producers (new title 0 SG 95/09, in force from 01.01.2010) Art. 189b. (new 5 SG 95/09, in force from 01.01.201 0) (1) The corporate tax shall be remitted in the amount of up to 60 per cent to taxable perso ns, registered as agricultural producer, for their taxable profit from activity of production of non5processed plant and animal products. (2) The corporate tax shall be remitted where the f ollowing requirements have been met in aggregate: 1. the remitted tax is invested into new buildings and new agricultural equipment, required for carrying out of the activity referred to in par. 1, by the end of the year, following the year, for wh ich the remittance is applied; 2. the assets under item 1 are acquired under marke t conditions, corresponding to those for non5 affiliated persons; 3. the activity under par. 1 must continue being ca rried out for a period of at least three years after the year of remittance; this circumstance shall be declared every year up to the expiration of the three5 year term together with the annual tax returns; 4. the remitted tax must not exceed 50 per cent of the cost of the assets under item 1. (3) The remittance shall not be allowable, where th e remitted tax is invested into buildings and agricultural equipment, which replace existing ones. (4) The corporate tax shall not be remitted where the person has received other grants pursuant to the provision of Art. 87, § 1 of the Treaty on E uropean Union, and also a minimum aid pursuant to Regulation (EC) 1535/2007 on the application of Art icles 87 and 88 of the EC Treaty to de minimis aid in the sector of agricultural production for the assets under par. 2, item 1. Restrictions on the use of tax relief (Title amend. 0 SG 110/07, in force from 01.01.2007) Art. 190. (amend. 5 SG 110/07, in force from 01.01. 2007) (1) A taxable person shall not be entitled to more than one tax relief under this Section during the same year. (2) The assets, in which an assigned tax has been i nvested according to Art. 188, Para 2, shall be excluded of the scope of the initial investment. Section V. Tax Relief in the Cases Where the Requirements Rega rding Admissible State Aid for Employment Are Fulfilled (Revoked – SG 106/08, in force from 01.01.2009) Taxable persons that may not enjoy tax relief Art. 191. (revoked – SG 106/08, in force from 01.01 .2009) Tax relief for employment promotion Art. 192. (revoked – SG 106/08, in force from 01.01 .2009) General conditions Art. 193. (revoked – SG 106/08, in force from 01.01 .2009) Part three. TAX WITHHELD AT THE SOURCE Chapter twenty three. OBJECTS OF TAXATIO Tax withheld from the income originating from divid ends and liquidation shares Art. 194. (1) Tax at the source is due on the divid ends and liquidation shares distributed (personified) by local legal entities in favour of: 1. foreign legal entities, except for the cases in which the dividends are realized by a foreign legal entity through a business activity establishm ent within the country; 2. local legal entities that are not traders, including municipalities. (2) The tax referred to in para. 1 shall be final a nd shall be withheld by local legal entities distributing dividends or liquidation shares. (3) Para. 1 shall not apply where the dividends and liquidation shares are distributed in favour of: 1. a local legal entity which participates in the capital of a company as a representative of the State; 2. contractual fund; 3. (new – SG 69/08, in force from 01.01.2009; amend . – SG 106/08, in force from 01.01.2009; suupl. 5 SG 95/09, in force from 01.01.2010) a foreign legal entity, which is a local persons for taxation purposes of a Member State of the European Union or of another state – party to the Agreement on European Economic Area, except for the cases of hidden distribution of profit. Tax withheld from the income of foreign persons Art. 195. (1) Where the income of foreign legal ent ities from a source within the country specified in Art. 12, paras. 2, 3, 5 and 8 is not realized through a business activity establishment w ithin the country, the said income shall be subject to tax at the source, and that tax shall be final. (2) The tax under para. 1 shall be withheld by the local legal entities, the sole proprietors or the business activity establishments within the country that assess the income of the foreign legal entities, with the exception of the income under Art. 12, par as. 3 and 8. (3) Where the payer of the income is not a taxable person under Art. 2, and the income is not one of those referred to in Art. 12, paras. 3 and 8 , the tax shall be withheld by the recipient of the income. (4) Paras. 1 and 2 shall also apply where, through a business activity establishment within the country, the foreign person assesses the said income to other parts of his establishment which are located outside the country, with the exception of those ca ses in which the accounting expenses are not recognized for tax purposes, or accounting expenses or assets accounted for at the amount of the expenses actually incurred (the cost value) are recognized for tax purposes in the business activity establishment. (5) The advance payments in connection with the inc ome referred to in para. 1 shall not be subject to taxation with a tax at the source. Securities traded in a regulated market Art. 196. (amend. – SG 106/08, in force from 01.01. 2009) No tax at the source shall be due on income from disposal of financial instruments under § 1, Item 21 of the Additional Provisions. Chapter twenty four. BASIS OF TAXATIO Basis of taxation for the tax withheld at the sourc e from the income from dividends Art. 197. The basis of taxation for determining the tax withheld at the source from the income from dividends shall be the gross amount of the distributed dividends. Basis of taxation for the tax withheld at the sourc e from the income from liquidation shares Art. 198. The basis of taxation for determining the tax withheld at the source from the income from liquidation shares shall be the difference bet ween the market price of the shares due to the respective shareholder or partner and the acquisition price of his stocks and shares, this price being evidenced with documents. Basis of taxation for the tax withheld at the source from the income of foreign persons Art. 199. (1) The basis of taxation for determining the tax withheld at the source from the income referred to in Art. 195, para. 1 shall be the gross amount of the said income, with the excepti on of the cases under paras. 3 and 4. (2) The basis of taxation for determining the tax withheld at the source from the interest income of foreign legal entities under financial lease contracts shall be determined on the grounds of the ma rket interest, unless the contract provides otherwise. (3) The basis of taxation for determining the tax w ithheld at the source from foreign persons’ income originating from actions of disposal of financial assets shall be the positive difference between their sale price and their acquisition price, the latter being evidenced with documents. (4) The basis of taxation for determining the tax w ithheld at the source from foreign persons’ income originating from disposal of immovable prope rty shall be the positive difference between the sale price of the property and the acquisition price of the property, the latter being evidenced with documents. (5) For the purposes of paras. 3 and 4, the sale pr ice shall be the consideration under the transaction, including the remuneration other than money assessed in accordance with the market prices as at the date of assessing the income. (6) In those cases where a financial lease contract is terminated prior to the expiry thereof and without transferring the ownership of the respectiv e assets forming the subject matter of the contract, those lease contributions which are not subject to repayment shall be regarded as income originating from the use of property, this income being received by the foreign legal entity at the time of termination of the contract. The tax withheld at the source and paid on interest income until the lease contract is terminated shall be deducted from the tax due at th e source on the income originating from the use of property. Chapter twenty five. TAX RATES Tax rates Art. 200. (1) (amend. 5 SG 110/07, in force from 01 .01.2008) The tax rate of the income tax referred to in Art. 194 shall be 5 percent. (2) The tax rate of the income tax referred to in Art. 195 shall be 10 percent. Chapter twenty six. DECLARIG THE TAX Declaring the tax. Certificate of tax paid on foreign persons’ income Art. 201. (1) (suppl. 5 SG 110/07, in force from 01 .01.2008) The persons that have withheld and paid the tax at the source under Arts. 194 and 195, as well as the persons that have assessed the income under Art. 12, paras. 3 and 8 shall declare this fa ct before the territorial directorate of the National Revenue Agency either by registration of the payer of the income or by the place in which the payer of the income must have registered, by way of a declar ation of a standard form. Such a declaration shall be submitted quarterly, not later than the end of the month following the respective quarter, when the ta x was deposited. (2) In those cases where the payer of the income is not subject to registration, the tax return shall be filed with the territorial directorate of the National Revenue Agency in Sofia. (3) In those cases where the payer of the income is a person that is not obligated to withhold and pay a tax, the tax return shall be filed by the recipient of the income prior to filing the reques t for the issue of the certificate referred to in para. 4, but not later than the time fixed under para. 1. (4) Upon the request of the person concerned, a cer tificate of a standard form shall be issued regarding the tax paid under this Law on the income of foreign legal entities. The said certificate shall be issued by the territorial directorate of the Nation al Revenue Agency in which the tax is payable. Chapter twenty seven. PAYIG THE TAX Paying the tax Art. 202. (1) The payers of income that have withhe ld the tax at the source under Art. 194 shall be obligated to pay the taxes due as follows: 1. within three months, this period commencing at t he beginning of the month following the month in which the decision on the distribution of dividends or liquidation shares is taken – in those cases where the owner of the income is a local pers on of a State with which Bulgaria has an operative treaty on avoidance of double taxation; 2. until the end of the month following the month in which the decision on the distribution of dividends or liquidation shares is taken – in all other cases. (2) The payers of income withholding a tax at the s ource under Art. 195 shall be obligated to pay the taxes due as follows: 1. within three months, this period commencing at t he beginning of the month following the month in which the income is assessed – in those cases where the owner of the income is a local person of a State with which Bulgaria has an operative treaty on avoidance of double taxation; 2. until the end of the month following the month i n which the income is assessed – in all other cases. (3) The tax due under paras. 1 and 2 shall be paid in the respective territorial directorate of the National Revenue Agency by registration of the paye r of the income or by the place in which the payer of the income must have registered. (4) Where the payer of the income is not a taxable person under Art. 2, and the income is not one of those referred to in Art. 12, paras. 3 and 8, the tax shall be paid by the recipient of the income within the time limits specified in para. 2, the income being regarded as assessed on the date on whic h it is received by the foreign legal entity. The tax due shall be paid in the respective territorial directorate of the National Revenue Agency either by registration of the payer of the income or by the place in which the payer of the income must have registered. In those cases where the payer of the income is not subj ect to registration, the tax shall be paid in the territorial directorate of the National Revenue Agency i n Sofia. (5) The overpaid tax shall be recovered by the territorial directorate of the National Revenue Agency in which the tax is payable. Re0calculation of the tax at source(new title 0 SG 95/09, in force from 01.01.2010) Art. 202a. (new 5 SG 95/09, in force from 01.01.201 0) (1) A foreign legal entity which is not a local person for tax purposes of an European Union Member State or of another country5 a party under the European Economic Area Agreement, shall be enti tled to choose to recalculate the tax at source of income under Art. 12, par. 2, 3, 5 and 8. Where the foreign person chooses to recalculate the tax at source, the recalculation shall be done for all received by him/her income under Art. 12, par. 2, 3, 5 and 8 over the year. (2) Where the foreign person chooses to recalculate the tax at source on the received by him/her income, the recalculated tax shall be equal to the corporate tax, which would have been payable for th at income, provided that they are received by a local legal entity. Where the foreign person has incurred expenses, related to the income under sentence one, for which tax on expenses would have been payable, provided that they have been incurred by a local legal entity, the amount of the recalculated tax shall be increased by this tax. (3) Where the amount of the deposited tax at source under Art. 195, par. 1 exceeds the amount of the recalculated tax under par. 2, the difference shall be refundable up to the amount of the tax a t source under Art. 195, par. 1, which the foreign person cannot deduct from the tax payable to the state, where it is a local person. (4) The choice of recalculating the tax at source shall be exercises by submitting an annual tax return in an approved form. The tax return shall be submitted by the foreign person to the Territorial Directorate of the National Revenue Agency – Sofia, not later than 31 December of the year, following the year of calculation of incomes. (5) Tax refund under par. 3 shall be done according to the provisions of the Core of Tax Insurance Procedure by the Territorial Directorate of the National Revenue Agency. (6) Paragraphs 1 – 5 shall not apply where the fore ign person is a local person for tax purposes of a country – a party under the European Economic Area Agreements, which is not a European Union Member State, with which the Republic of Bulgaria: 1. does not have an enforced agreement for avoidance of double taxation, or 2. has got an enforced agreement for avoidance of d ouble taxation, where the following is not provided: a) exchange of information, or b) cooperation in collection of taxes. Responsibility Art. 203. Where the tax referred to in Arts. 194 an d 195 has not been duly withheld and paid, the persons liable with regard to the respective income shall be jointly responsible for it. Part four. TAX O EXPESES Chapter twenty eight. GEERAL PROVISIOS Objects of taxation Art. 204. Tax on expenses shall be due on the follo wing expenses certified by way of documents: 1. the expenses of representation relating to the activity; 2. social expenses provided in kind to workers and employees employed under management and supervision contracts (employees); the social expenses provided in kind shall also include: а) (amend. – SG 106/08, in force from 01.01.2009) e xpenses of contributions (premiums) for additional voluntary insurance, for voluntary health insurance and for life insurance; b) the expenses of vouchers for food; 3. the expenses connected with the operation of veh icles in those cases where managerial activity is performed therewith. Social expenses which are not in kind Art. 205. Those social expenses which are not in ki nd and constitute income of a natural person shall be taxed in accordance with the terms and pro cedure set forth in the Law on Taxes on the Income of Natural Persons. Recognition of the tax on expenses Art. 206. (1) The expenses and the tax thereon shal l be recognized for tax purposes in the year in which they are assessed, and shall not form a tax temporary difference under Chapter Eight. (2) The tax on expenses shall be final. Taxable persons Art. 207. (1) The persons liable for the tax referr ed to in Art. 204, items 1 and 3 shall be the persons subject to taxation with corporate tax. (2) The persons liable for the tax referred to in A rt. 204, item 2 shall be all employers or assignors under management and supervision contract s. Exemption from taxation of social expenses of contr ibutions and premiums for additional social insurance and life premiums Art. 208. The social expenses under Art. 204, item 2, letter "а" at the monthly amount of up to BGN 60 per an employed person shall not be taxable in those cases where the taxable persons have no public liabilities enforceable at the time the expenses are made. Exemption from taxation of social expenses of vouch ers for food Art. 209. (1) (amend. – SG 106/08, in force from 01 .01.2009) No tax shall be due on the social expenses referred to in Art. 204, item 2, letter "b" amounting to up to BGN 60 per month, provided in the form of vouchers for food for an employed perso n, where all of the following conditions are present: 1. (amend. 5 SG 110/07, in force from 01.01.2008) t he person’s negotiated basic monthly remuneration for the month in which the voucher is provided is not lower than the person’s average negotiated monthly basic remuneration for the preceding three months; 2. at the time the vouchers are provided the taxable person has no enforceable public liabilities; 3. the vouchers are provided to the taxable person by a person having permission for carrying out activities as an operator, this permission being given by the Minister of Finance on the grounds o f a competition; 4. the amounts under the vouchers paid to the operator by the taxable person may be used only for settling the accounts with the persons with whom the operator has signed a service contract, by wa y of a bank transfer, or for repaying to the taxable person the amount of the vouchers up to their nomin al value in those cases where they have not been used; 5. the persons with whom the operator has signed a contract for servicing the employed persons are registered under the Law on Value Added Tax. (2) In order for a person to acquire the right to carrying out activities as an operator, he must have obtained permission from the Minister of Finan ce and must: 1. have fixed (registered) capital of at least BGN 2 million at the time of filing the documents for obtaining permission; 2. be registered under the Law on Value Added Tax; 3. not be a party in bankruptcy proceedings and mus t not have gone into liquidation; 4. have no enforceable public liabilities at the time of filing the documents for obtaining permission; 5. be represented by persons who: а) have not been sentenced for a wilful crime, except for the cases of exculpation; b) have not been members of a management body or a supervisory body of a company that was declared bankrupt in the two years preceding the da te of the decision on opening bankruptcy proceedings, if there have been unsatisfied creditors. (3) (amend. – SG 106/08, in force from 01.01.2009) The permission shall be issued by the Minister of Finance on the grounds of a competition and shall be revoked when the operator: 1. does not fulfil some of the requirement under para. 2 any more; 2. discontinue the activity; 3. (In force from 01.01.2010) was not operating dur ing the preceding two years, for which he participated in the allocation of the nominal value of the vouchers; 4. (In force from 01.01.2010) he has issued food vo uchers exceeding the nominal value allocated to him for the relevant year. (4) The issue of permission, the refusal to issue permission and the revocation of the permission issued shall be performed by way of a written Ordin ance of the Minister of Finance. (5) The refusal to issue permission and the revocat ion of the permission issued may be challenged in accordance with the procedure set forth in the Administrative Procedure Code. (6) The procedure for holding the competition, issu ing and revoking the permission, printing out the vouchers, as well as the number of the vouc hers issued, the conditions of organizing and exercising control over the activity as an operator shall be determined by way of an Ordinance of the Minister of Labour and Social Policy and the Minist er of Finance. Exemption from taxation of social expenses of trans portation of workers and employees, and the persons employed under management and super vision contracts Art. 210. (1) The tax referred to in Art. 204, item 2 shall not be due on the social expenses of transportation of workers and employees, and the pe rsons employed under management and supervision contracts from the place of residence to the place of work and backwards. (2) Para. 1 shall not apply where the transportatio n is carried out with a car or using additional bus lines. (3) Para. 1 shall also apply where the workers and employees are transported with a car to a region difficult of access, or a remote region and without the said expense the taxable person shall n ot be able to exercise his activity. Chapter twenty nine. BASIS OF TAXATIO Basis of taxation for the tax on expenses of repres entation Art. 211. The basis of taxation for determining the tax on the expenses referred to in Art. 204, item 1 shall be the expenses assessed for the respective month. Basis of taxation for the tax on social expenses pr ovided in kind Art. 212. The basis of taxation for determining the tax on the expenses referred to in Art. 204, item 2 shall be the assessed social expenses provided in kind decreased by the income relating to the said expenses, for the respective month. Basis of taxation for the tax on social expenses of contributions (premiums) for additional social insurance and life premiums Art. 213. (1) The basis of taxation for determining the tax on the expenses referred to in Art. 204, item 2, letter "а" shall be the excess of these expenses over BGN 60 per month per each employee. (2) Where the taxable persons have public liabilities enforceable at the time the expenses are assessed, the basis of taxation for determining the tax on the expenses shall be the whole amount of t he assessed expenses. Basis of taxation for the tax on social expenses of vouchers for food Art. 214. (1) (amend. – SG 106/08, in force from 01 .01.2009) The basis of taxation for determining the tax on the expenses referred to in Art. 204, item 2, letter "b" shall be the excess of these expenses over BGN 60 per month per each employee. (2) Where the conditions for tax exemption referred to in Art. 209 are not fulfilled, the basis of taxation for determining the tax on the expenses shall be the whole amount of the assessed expenses. Basis of taxation for the tax on the expenses conne cted with maintenance, repair and operation of transport vehicles Art. 215. (1) The basis of taxation for determining the tax on the expenses referred to in Art. 204, item 3 shall be the expenses assessed during t he calendar month for the maintenance, repair and operation of transport vehicles decreased by the assessed income from insurance indemnities relating t o the transport vehicle, up to the amount of those repair expenses which the indemnity concerns. (2) Where the transport vehicles are used both for activity by occupation and for managerial activity, when determining the basis of taxation referred to in para. 1: 1. the operational expenses shall be attributed to the managerial activity on the grounds of the kilometres travelled for this activity in the current month; 2. the expenses of maintenance and repair shall be attributed to the managerial activity on the grounds of the kilometres travelled for this activity versus the total number of kilometres travelled by the respective transport vehicle for the last 12 months , including the current one. (3) Where the basis of taxation referred to in para . 1 is a negative value, it shall be deducted gradually from the basis of taxation for the subsequent months. Chapter thirty . TAX RATE, STATEMET AD PAYMET OF THE TAX O EXPE SES (TITLE AMED. 0 SG 110/07, I FORCE FROM 01.01.2007) Tax rate Art. 216. The tax rate of the tax on expenses refer red to in Art. 204 shall be 10 percent. Tax and paying the tax (Title amend. 0 SG 110/07, i n force from 01.01.2007) Art. 217. (1) (new 5 SG 110/07, in force from 01.01 .2007) The tax on expenses shall be stated in an annual tax statement, submitted by the taxable person. (2) (prev. text of Art. 217 5 SG 110/07, in force from 01.01.2007) The tax on expenses shall be payable until the 15th day of the month following t he month in which the expense is assessed. In those cases where the taxable person has overpaid his tax on expenses or his corporate tax, the amount of overpayment may be deducted from the tax due on exp enses. Part five. ALTERATIVE TAXES Chapter thirty one. GEERAL PROVISIOS Alternative tax Art. 218. (1) The taxable persons specified in this Part shall be liable for alternative tax on the activities specified herein, instead of corporate tax. (2) Except for the State5budget enterprises, the pe rsons referred to in para. 1 shall be liable for corporate tax on all the other activities. Chapter thirty two. TAX O GAMBLIG ACTIVITIES Section I. General Provisions Accounting Art. 219. (1) The taxable persons under this Chapte r shall have to keep daily and monthly accounts of the sums received and paid for participation in gambling games, these being accounts of a standard form approved by the Minister of Finance. (2) Para. 1 shall not apply: 1. to the gambling activity referred to in Section V; 2. to the gambling games in which the value of the bet for participation is expressed in the form of an increased price of a telephone connection or another telecommunication connection; 3. where a computer system is provided for the gamb ling game, the said system monitoring the drawings and receipts, the formation and distribution of prizes and transferring to the National Reven ue Agency the data required by the latter. (3) The tax on the auxiliary and subsidiary activities within the meaning of the Gambling Law shall be declared in the annual tax return of a standard form, which is submitted until 31 March of th e subsequent year with the territorial directorate of the National Revenue Agency by the taxable person’ s registration. (4) (new 5 SG 95/09, in force from 01.01.2010) Taxable persons under this Chapter shall submit an annual business report by 31 March of the follow ing year to the Territorial Directorate of the National Revenue Agency at the place of registration of the taxable person. Section II. Tax on Gambling Activity of Toto and Lotto Games, M aking Bets on Results of Sports Competitions and Chance Events General provisions Art. 220. The gambling activities of toto and lotto games, and the making of bets on results of sports competitions and chance events shall be taxe d with a tax on gambling activity, and the said tax shall be final. Taxable persons Art. 221. The taxable persons under this Section sh all be the organizers of the toto and lotto games, and the making of bets on results of sports competitions and chance events. Basis of taxation Art. 222. The basis of taxation for determining the tax on gambling activity under this Section shall be the value of the bets made for each game. Tax rate Art. 223. (amend. 5 SG 95/09, in force from 01.01.2 010) The tax rate of the tax on gambling activity under this Section shall be 15 percent. Declaring the tax Art. 224. The tax on gambling activity under this S ection shall be declared prior to determining the results of the game, with a tax return of a standard form. Paying the tax Art. 225. The tax on gambling activity under this S ection shall be payable: 1. where the games are played daily – within 3 work ing days of determining the results for the preceding seven calendar days; 2. where the cycle of playing the games does not ex ceed 7 days 5 within 3 working days of determining the results, but prior to determining the results of the subsequent game; 3. where the cycle is longer 5 within 7 days of det ermining the results. Receipts from auxiliary and subsidiary activities Art. 226. (1) (amend. 5 SG 95/09, in force from 01. 01.2010) The receipts from auxiliary and subsidiary activities within the meaning of the Gambling Law shall be taxed with alternative tax at the amount of 12 percent of the value thereof. (2) The tax shall be payable until the 15th day of the month following the month in which the receipts under para. 1 are assessed. Section III. Tax on Gambling Activity of Lotteries, Rattles, and Bingo and Keno Lottery Games with umbers General provisions Art. 227. The gambling activity of lotteries, rattl es, and Bingo and Keno lottery games with numbers shall be taxed with a tax on gambling activ ity, and the said tax shall be final. Taxable persons Art. 228. Taxable persons under this Section shall be the organizers of the gambling games 5 lotteries, rattles, and Bingo and Keno lottery games with numbers. Basis of taxation Art. 229. The basis of taxation for determining the tax on gambling activity under this Section shall be the nominal value of the bet specified in slips, talons, tickets or other documents for participation. Tax rate Art. 230. (amend. 5 SG 95/09, in force from 01.01.2 010) The tax rate of the tax on gambling activity under this Section shall be 15 percent. Declaring the tax Art. 231. The tax on gambling activity under this S ection shall be declared monthly until the 10th day of the subsequent month, by way of a tax return of a standard form. Paying the tax Art. 232. (1) The tax on gambling activity under th is Section shall be payable prior to receiving the documents for participation or importing them. (2) Those enterprises determined by the Minister of Finance, or another body specified in law, which print out the documents for participation or import the said documents shall provide the documents for participation only after the submission of documents evidencing that the tax has been paid. Recovery of the tax Art. 233. (1) The tax paid on documents which have not been used shall be recovered by the territorial directorate of the National Revenue Agency by registration of the person: 1. after completion of each part (drawing) of the periodic lottery games, or 2. where the activity of the organizer is suspended on the grounds of Art. 81, para. 2 of the Gambling Law. (2) The request for recovery under the Tax Insurance Procedure Code shall be accompanied by the unused documents for participation, and the dec ision on suspension of the activity in the cases referred to in para. 1, item 2. Receipts from auxiliary and subsidiary activities Art. 234. (1) The receipts from auxiliary and subsi diary activities within the meaning of the Gambling Law shall be taxed with an alternative tax at the amount of 12 percent of the value thereof. (2) The tax shall be payable until the 15th day of the month following the month in which the receipts referred to in para. 1 are assessed. Section IV. Tax on Gambling Activity of Games in Which the Bet for Participation Is the Increased Price of a Telephone Connection or Another Telecommunication C onnection General provisions Art. 235. The gambling activity of games in which t he value of the bet for participation is expressed in the increased price of a telephone connection or another telecommunication connection shall be taxed with a tax on gambling activity, and the said tax shall be final. Taxable persons Art. 236. Taxable persons under this Section shall be the organizers of those gambling games in which the value of the bet for participation is expressed in the increased price of a telephone connec tion or another telecommunication connection. Basis of taxation Art. 237. The basis of taxation for determining the tax under this Section shall be the increase in the price of the telephone connection or the other telecommunication connection. Tax rate Art. 238. (amend. 5 SG 95/09, in force from 01.01.2 010) The tax rate of the tax under this Section shall be 15 percent. Declaring the bets made and the tax Art. 239. (1) The organizer of the gambling game sh all declare the bets made and the tax under this Section at the territorial directorate of the National Revenue Agency by his registration until t he 20th day of the month following the month in which the games are held, by way of a tax return of a standard form. (2) The telephone operator or the telecommunication operator shall declare the bets made and the tax under this Section at the territorial directorate of the National Revenue Agency by his regist ration until the 20th day of the month following the month in which the games are held, by way of a tax return of a standard form. Paying the tax Art. 240. (1) The tax on the gambling activity unde r this Section shall be withheld and paid by the licensed telephone operator or the licensed tel ecommunication operator until the 20th day of the month following the month in which the games are he ld. (2) The telephone operator or the telecommunication operator shall have to make sure that the organizer of the gambling game has obtained permiss ion from the State Commission on Gambling and shall have to submit with the territorial directorate of the National Revenue Agency the contract on t he grounds of which he accepts the bets, the said contract containing a clause regarding the increase in the price of the telephone connection or the other telecommunication connection. Receipts from auxiliary and subsidiary activities Art. 241. (1) The receipts from auxiliary and subsi diary activities within the meaning of the Gambling Law shall be taxed with an alternative tax at the amount of 12 percent of the value thereof. (2) The tax shall be paid by the organizer of the gambling game until the 15th day of the month following the month in which the receipts referred to in para. 1 are assessed. Section V. Tax on Gambling Activity with Gambling Devices General provisions Art. 242. The gambling activity with gambling machi nes, devices for making bets on the results of horse racing, dog racing, roulette and other gambling devices in a gambling house shall be taxed wi th a tax on gambling activity, and this tax shall be final. Taxable persons Art. 243. Taxable persons under this Section shall be the organizers of gambling games with gambling machines, devices for making bets on the r esults of horse racing, dog racing, roulette and other gambling devices in a gambling house. Determining the tax Art. 244. The tax under this Section shall be deter mined on the following devices that are entered in the permit and are operated: 1. gambling machines, and each gaming seat thereof, respectively; 2. devices for making bets on the results of horse racing or dog racing; 3. roulettes in a gambling house, gaming tables or other gambling devices in a gambling house. Amount of the tax Art. 245. (1) (amend. 5 SG 95/09, in force from 01. 01.2010) The amounts of the tax on gambling activity under this Section shall be as follows: 1. per gambling machine, per gaming seat thereof, r espectively – BGN 500 per quarter; 2. per device for making bets on the results of hor se racing or dog racing – BGN 500 per quarter; 3. per roulette in a gambling house, per gaming tab le – BGN 22,000 per quarter per each device; 4. per another gambling device in a gambling house – BGN 5,000 per quarter per each device. (2) No tax shall be due for the quarters prior to the issue of the permit for organizing gambling games with the respective device or for the quarter s after the revocation thereof. (3) The full amount of the tax shall be due for the quarter in which the permit for organizing gambling games with the respective device is issued as well as for the quarter in which it is revoked. Declaring the tax Art. 246. The organizer of the gambling game shall declare the tax under this Section at the territorial directorate of the National Revenue Agency by his registration until the 15th day of the month following the respective quarter. Paying the tax Art. 247. (1) The tax under this Section shall be p ayable within the time limits for declaring it. (2) The tax shall be paid with a separate writ of p ayment for each object of gambling activity, the writ of payment specifying the location and the address of the object. (3) (amend. 5 SG 95/09, in force from 01.01.2010) T he persons under this Section shall send a copy of the writ of payment to the territorial directorate of the National Revenue Agency by the locat ion of the gaming room, the device for making bets or the gambling house. Chapter thirty three. TAX O THE RECEIPTS OF STATE0BUDGET ETERPRISES General provisions Art. 248. The receipts of the State5budget enterpri ses from transactions referred to in Art. 1 of the Commercial Law, and the receipts from leasing m ovable and immovable property shall be taxed with a tax on receipts in accordance with the procedure set forth in this Chapter. Basis of taxation Art. 249. (1) The basis of taxation for determining the tax on the receipts shall be monthly and annual one. (2) The monthly basis of taxation shall be those re ceipts of the State5budget enterprise from transactions referred to in Art. 1 of the Commercia l Law and the receipts from leasing movable and immovable property which are assessed in the respective month. (3) The annual basis of taxation shall be those rec eipts of the State5budget enterprise from transactions referred to in Art. 1 of the Commercial Law and the receipts from leasing movable and immovable property which are assessed in the respective year. Tax rate Art. 250. (1) The tax rate of the tax on receipts s hall be 3 percent. (2) The tax rate of the tax on the receipts of the municipalities shall be 2 percent. Tax assignment Art. 251. (1) There shall be assigned 50 percent of the tax on the receipts of the scientific research State5budget enterprises, the State higher schools, the State and municipal schools of the pu blic education system for their economic activity which is either directly connected with or helpful to the performance of their basic activity. (2) The assigned tax shall be recorded as a written5off liability to the State. Declaring the tax Art. 252. (1) (prev. Art. 252 5 SG 95/09, in force from 01.01.2010) In those cases where they are subject to tax on the receipts in the respectiv e year, the State5budget enterprises shall submit a n annual tax return of a standard form until 31 March of the subsequent year. (2) (new 5 SG 95/09, in force from 01.01.2010) An a nnual business report shall be submitted together with the annual tax return. Paying the tax Art. 253. (1) The tax on receipts, determined on th e grounds of the monthly basis of taxation, shall be payable by the State5budget enterprises until the 15th day of the month following the month i n which the receipt is assessed. (2) Where the aggregate of the monthly bases of tax ation for the year is smaller than the annual basis of taxation, the tax due shall be payable until 31 March of the subsequent year. (3) Where the aggregate of the monthly bases of tax ation for the year is greater than the annual basis of taxation, after the submission of the annu al tax return the amount of overpayment may be deducted from the taxes due on receipts. Chapter thirty four. TAX O THE ACTIVITY OF OPERATIO OF VESSELS General provisions Art. 254. (1) The taxable persons under this Chapte r shall be entitled to choose that their activity of operation of vessels be taxed with a tax on the activity of operation of vessels. (2) The taxable persons that have chosen to be taxe d with the tax referred to in para. 1 shall be taxed with this tax for a period of at least 5 years. Taxable persons Art. 255. Taxable persons under this Chapter shall be the persons performing maritime commercial navigation, providing that all of the following conditions are present: 1. (amend. – SG 106/08, in force from 01.01.2009) t hey are companies registered under the Commercial Law or business activity establishments of a company located for tax purposes either in another Member State of the European Union or in a Member State of the European Economic Area, and are not regarded as located in another State outside the European Union or the European Economic Area under the respective tax legislation or under a treaty on avoidance of double taxation with a thi rd State; 2. they operate vessels of their own or chartered o nes, or manage vessels on the grounds of management contracts, and charter vessels; 3. they do not refuse to train probationers on board, with the exception of those cases in which the number of probationers within a year is more th an one per 15 officers on board; 4. (amend. – SG 106/08, in force from 01.01.2009) t heir crews are recruited from Bulgarian citizens or citizens of other Member States of the European Union or the European Economic Area; 5. (amend. – SG 106/08, in force from 01.01.2009) a t least 60 percent of the net tonnage of the operated vessels is of vessels flying the Bulgarian flag or the flag of another Member State of the European Union or the European Economic Area. Limitations on the scope of the tax Art. 256. The taxable persons shall not be entitled to apply the procedure for taxation under this Chapter to: 1. sea vessels the net tonnage of which is below 10 0 tons; 2. fishing vessels; 3. vessels for trips, with the exception of passenger ships; 4. vessels which the taxable persons have granted u nder management contracts or under bare5 boat charters, except for the cases in which the vessels are granted to the State; 5. installations for extraction of ores and mineral s, oil platforms, dredgers and vessels performing towage. Basis of taxation Art. 257. (1) The basis of taxation per vessel per day in operation shall be determined as follows: 1. per vessel the net tonnage of which is up to 1,0 00 tons – BGN 3.50 per each 100 tons commenced; 2. per vessel the net tonnage of which is from 1,001 up to 10,000 tons – BGN 35 plus BGN 3.00 per each 100 tons commenced above 1,000 tons; 3. per vessel the net tonnage of which is from 10,001 up to 25,000 tons – BGN 305 plus BGN 2.50 per each 100 tons commenced above 10,000 tons; 4. per vessel the net tonnage of which is above 25,001 tons – BGN 680 plus BGN 1.00 per each 100 tons commenced above 25,000 tons. (2) The basis of taxation of a vessel for a calenda r month shall be determined by multiplying the basis of taxation of the respective vessel per one day of operation, the said basis of taxation be ing determined under para. 1, by the number of days of operation of the respective vessel for the calendar month. (3) The basis of taxation for determining the tax under this Chapter shall be the aggregate of the bases of taxation of all vessels determined under p ara. 2. Tax rate Art. 258. The tax rate of the tax under this Chapte r shall be 10 percent. Declaring the tax Art. 259. (1) The taxable persons shall exercise th eir right to choose taxation with the tax under this Chapter by way of submitting a tax return of a standard form not later than 31 December of the preceding year. (2) The taxable persons shall submit an annual tax return of a standard form for the tax due under this Chapter not later than 31 March of the subsequent year. (3) (new 5 SG 95/09, in force from 01.01.2010) An a nnual business report shall be submitted together with the annual tax return. Paying the tax Art. 260. The taxable persons shall pay monthly the tax due under this Chapter not later than the end of the subsequent month. Part six. ADMIISTRATIVE SACTIOS PROVISIOS Chapter thirty five. ADMIISTRATIVE VIOLATIOS AD SACTIOS Art. 261. (1) A taxable person that fails to submit the tax return referred to in this Law, or fails to submit it in due time, or fails to state data or circumstances, or states false data or circumstanc es, this bringing about either a lower amount of the tax or ungrounded abatement, or assignment, or exemption from tax, shall be punished with a pecuniary sanction at the amount of BGN 500 to BGN 3,000. (2) In the cases of a repeated violation the pecuniary sanction referred to in para. 1 shall be at the amount of BGN 1,000 to BGN 6,000. Art. 262. (1) A taxable person that fails to submit a supplement to the annual tax return, or states false data or circumstances therein shall be punished with a pecuniary sanction at the amount o f BGN 100 to BGN 1,000. (2) In the cases of a repeated violation the pecuniary sanction referred to in para. 1 shall be at the amount of BGN 200 to BGN 2,000. Art. 263. (1) A taxable person that reports a busin ess operation in violation of its accounting policy and this brings about improper determination of its accounting financial result shall be punished with a pecuniary sanction at the amount of BGN 100 to BGN 1,000 per each violation. (2) In the cases of a repeated violation the pecuniary sanction referred to in para. 1 shall be at the amount of BGN 200 to BGN 2,000 per each violati on. Art. 264. (1) A manager, a liquidator/trustee in ba nkruptcy or a person who has held the position of a liquidator/trustee in bankruptcy who has committed a violation through action or omissio n, this being a violation under Arts. 261, 262 or 263 shall be punished with a pecuniary sanction or a fi ne at the amount of BGN 200 to BGN 1,000. (2) In the cases of a repeated violation the pecuniary sanction or fine referred to in para. 1 shall be at the amount of BGN 400 to BGN 2,000 per each v iolation. Art. 265. (amend. 5 SG 110/07, in force from 01.01. 2008) A taxable person that fails to issue a primary accounting document in order to account for receipts shall be imposed a sanction under Art. 182 of the Law on Value Added Tax, unless the person is subject to a more severe punishment. Art. 266. (amend. 5 SG 110/07, in force from 01.01. 2008) A taxable person that fails to perform its duty under Art. 10, Para 4 shall be imposed a sanction under Art. 185 of the Law on Value Added Tax. Art. 267. (amend. 5 SG 110/07, in force from 01.01. 2008) A taxable person that makes a concealed distribution of profit shall be punished with a pecuniary sanction at the amount of 20 perce nt of the assessed expense constituting concealed distribution of profit. Art. 268. (1) An organizer of gambling games that fails to perform the obligation to keep daily and monthly accounts referred to in Art. 219 shall be punished with a pecuniary sanction at the amount of BGN 2,000 to BGN 10,000. (2) In the cases of a repeated violation the pecuniary sanction referred to in para. 1 shall be at the amount of BGN 4,000 to BGN 20,000. Art. 269. (1) Where an enterprise under Art. 232 wh ich prints out or imports documents for participation provides the documents for participation without having the document of paid tax submitted thereto shall be punished with a pecuniary sanction at the amount of the unpaid tax. (2) In the cases of a repeated violation the pecuni ary sanction referred to in para. 1 shall be equal to the double amount of the unpaid tax and th e Minister of Finance shall deprive the enterprise from the right to print out or import the documents for participation in the games under Chapter Thirty5 Two, Section III for a period of up to 6 months. Art. 270. (1) An organizer of gambling games under Art. 228 holding such games without having paid the full amount of the tax due shall be punished with a pecuniary sanction of the double amount of the tax due, this sanction being not less than BGN 2,000. (2) The pecuniary sanction under para. 1 shall also be imposed on an organizer of gambling games under Art. 228 that offers, sells or provides to a participant in the gambling game a document f or participation which does not comply with the requir ements set forth in the statutory instruments regarding the printing out, form, type and cost value thereof, or sells the said document for participation at a price higher than the nominal one printed on i t. No sanction shall be imposed where the reapprais al of the nominal value of the documents for participa tion has been entered in a record certified by a representative of the Ministry of Finance, a representative of the enterprise printing the documents a nd the revenue body of the respective territorial directorate of the National Revenue Agency by registrat ion of the organizer. (3) In the cases of a repeated violation the pecuniary sanction referred to in paras. 1 and 2 shall be equal to the double amount of the tax due, this sanction being not less than: 1. BGN 4,000 and deprivation of the right to exerci sing activity under Art. 272, where the repeated violation concerns para. 1; 2. BGN 6,000 and deprivation of the right to exercising activity under Art. 272, where the repeated violation concerns para. 2. Art. 271. The pecuniary sanctions under Arts. 269 and 270 shall be imposed regardless of the sanctions provided for in other laws, and the control bodies under the Gambling Law shall be notified of the established violations. Art. 272. (1) The administrative sanction of deprivation of the right to exercising activity shall be imposed for a period of 1 to 6 months. (2) In the cases referred to in Art. 270, para. 2 the revenue bodies shall seize and destroy those documents for participation which do not comply wit h the requirements set forth in the statutory instruments regarding the printing out, form, type and cost value, or are sold at a price that is higher than the nominal one printed on the respective document for participation. The expenses shall be borne by the taxable person. (3) In the cases of imposing the administrative san ction of deprivation of the right to exercising activity, the compulsory administrative measure of sealing the site and forbidding the access thereto shall be applied as well. Art. 273. (1) The execution of the administrative sanction of deprivation of the right to exercising activity shall be suspended by the body which has imposed it, at the request of the taxable person that has been sanctioned, and after the latter has evidenced to have paid the whole amount of t he pecuniary sanction imposed. (2) In the cases referred to in para. 1 the revenue body shall also order the unsealing of the site which shall be carried out under the taxable person ’s obligation to render assistance. Art. 274. The part of the penalty warrants which co ncerns the administrative sanction of deprivation of the right to exercising activity and the compulsory administrative measure of sealing t he site and forbidding the access thereto, as well as the penalty warrants under Art. 273 shall be subjec t to preliminary execution, except where the court rules otherwise. Art. 275. A person failing to perform the obligatio n under Art. 187, para. 3 shall be punished with a pecuniary sanction at the amount of BGN 1,00 0 to BGN 3,000 and in the cases of a repeated violation the pecuniary sanction shall be at the amount of BGN 2,000 to BGN 6,000. Art. 276. (amend. 5 SG 95/09, in force from 01.01.2 010) A taxable person failing to perform the obligation under Art. 92, par. 3, Art. 219, par. 4, Art. 252, par. 2 or Art. 259, par. 3 shall be puni shed with a pecuniary sanction at the amount of BGN 500 to BGN 2,000 and in the cases of a repeated violation the pecuniary sanction shall be at the amount of BGN 1,500 to BGN 5,000. Art. 277. (1) The taxable persons that have applied the procedure for taxation under Chapter Thirty5Four but do not fulfil the conditions which give them the right of choosing shall be punished w ith a pecuniary sanction at the amount of BGN 20,000 to BGN 30,000 and in the cases of a repeated violation the pecuniary sanction shall be at the amount of BGN 40,000 to BGN 60,000. (2) The persons referred to in para. 1 shall not be entitled to apply the procedure for taxation of the activity of operation of vessels for a period of 5 years. Art. 277a. (new – SG 106/08, in force from 01.01.20 09) Any operator of food vouchers who issues food vouchers exceeding the nominal value al located to him for the relevant year shall be imposed a property sanction in amount from BGN 10 000 to 15 000. Art. 277b. (new – SG 106/08, in force from 01.01.20 09) Any operator of food vouchers who fails to provide a reference for the made available and paid (cashed) vouchers shall be imposed a property sanction in amount from BGN 1000 to 1500 a nd in case of repeated offence 5 in amount from BGN 2000 to 2500. Art. 278. (1) The records establishing the violations shall be drawn by the bodies of the National Revenue Agency, while the penalty warrants shall be issued either by the Executive Director of the National Revenue Agency or by an official autho rized by him/her. (2) The establishment of violations, and the issue, appeal and enforcement of penalty warrants shall be carried out in accordance with the procedu re set forth in the Law on Administrative Violations and Sanctions. Additional provisions § 1. In this Law: 1. "The country" shall denote the geographic territory in which the Republic of Bulgaria exercises its State sovereignty, as well as the continental shelf and the exclusive economic area with in which the Republic of Bulgaria exercises sovereign rights in accordance with international law. 2. "Business activity establishment" shall denote the business activity establishment within the meaning of § 1, item 5 of the Supplementary Provisi ons of the Tax Insurance Procedure Code. 3. "Financial asset" shall denote the asset defined in the applicable accounting standards, including the compensatory instruments within the m eaning of Art. 2 of the Law on Transactions in Compensatory Instruments. Where the person is not an enterprise within the meaning of the Accounting Law, for the purposes of the first sentence the applicable accounting standards shall be the international accounting standards applicable within the country in the respective year. 4. "Dividend" shall denote the allotment in favour of a person as a result of the person’s share in another person’s capital, this allotment bringin g about a decrease in the equity of the latter, thi s including: а) income originating from shares; b) income originating either from shareholding, inc luding the shareholding in unincorporated companies, or from other rights treated as income from shares; c) concealed distribution of profit. The distribution accounted for as expense by the di stributing person, this being in accordance with accounting legislation, shall not be a dividend, except for the cases of concealed distribution o f profit. 5. (amend. 5 SG 110/07, in force from 01.01.2008) " Concealed distribution of profit" shall denote: a) (amend. 5 SG 95/09, in force from 01.01.2010) the amounts not related to the carried by the taxable person activity or such exceeding the usual market levels, accounted, paid or distributed in any form in favour of the shareholders, or parties rela ted thereto, except for the dividends under item 4, items “a” and “b”; b) accounted expenses for interests (unless the loan conditions have been negotiated to perform requirements stipulated in a normative act), where at least three of the following conditions are available: aa) by 31 December of the preceding year the loan exceeds the own capital of the payer of the income; bb) the payment of the loan or the related interests is not restrict to a fixed term; cc) the payment of the loan or the related interest s or the amount of the interests depends on the availability or the amount of profits of the payer of the income; dd) the payment of the loan depends on the satisfac tion of the claims of other creditors or on the payment of dividents. 6. "Liquidation share" shall denote the allotment of a share in the property of a person in favour of another person upon the winding5up of the first person or upon termination of the membership of the other person. 7. "Interest" shall denote the income originating from any type of receivables for a debt, regardless to whether the debt is secured by way of a mortgage or by way of a clause providing for participation in the debtor’s profit, including the interest on bank deposits and the income (bonuses) from bonds and debentures. For the purposes of Part Three, the income in the form of dividends, interest on delayed payments and indemnities shall not be re garded as interest. 8. (suppl. 5 SG 95/09, in force from 01.01.2010) "A uthor’s and licence remuneration" shall denote payments of any type received for: the use or the right to the use of any copyright regarding a work of literature, art or science, including films, records of radio or TV broadcast or software; the use or the right to the use of any patent, integrated circuit topology, trade mark, industrial design or u seful model, plan, secret formula or process; the use or the right to the use of an industrial, commercial or scientific equipment or information regarding an industrial, commercial or scientific experiment. The payments for the acquisition of the right to using software in which only a copy of the respective programme is incorporated shall not be regarded as author’s and licence remuneration in those cases where the rights of copying, reproducing, distributing, modifying, publicizing and other forms of commercial use are not granted. “Industrial, commer cial or research equipment” shall be all movable things, including vehicles, facilities, production facilities, facilities for providing services, tec., which the enterprise uses in its business activity. 9. "Remuneration for technical services" shall deno te the payments, originating in the Republic of Bulgaria, relating to the assemblage or installation of tangible assets as well as any other services of consultancy nature, and marketing studies, these pa yments being made by a foreign person. 10. "Franchise" shall denote the aggregate of indus trial and intellectual property rights regarding trade marks, trade names, logos, models, designs, copyright, know5how or patents, these righ ts being granted in return for remuneration, for being used in selling goods and/or providing services. 11. "Factoring" shall denote a transaction relating to one5time money receivables or regular ones ensuing from delivery of goods or provision of services, regardless to whether the person acquiring the receivables (the factor) takes the risk of collecting the said receivables in return for remunerat ion. 12. "Tax input" shall denote the right enjoyed unde r the conditions specified in this Law to deduction of an amount of the tax paid abroad on profit or income. 13. "Related parties" shall denote the parties with in the meaning of § 1, item 3 of the Supplementary Provisions of the Tax Insurance Procedure Code. 14. "Market price" shall denote the price within th e meaning of § 1, item 8 of the Supplementary Provisions of the Tax Insurance Procedure Code. 15. "Transfer between a business activity establish ment and another part of the same establishment" shall denote the term referred to in § 1, item 6 of the Supplementary Provisions of the Tax Insurance Procedure Code. 16. "Accounting financial result" shall denote the profit (the loss) under the profit and loss account (the income account) for a certain period of time prior to the assessment of the expenses of tax on profit. 17. "Non5distributable expenses" shall denote all t he sales expenses, and those administrative, financial and unscheduled expenses which relate to more than one activities and are connected with performing activities: а) for which assignment of corporate tax is enjoyed, or b) which are subject to taxation with corporate tax and are carried out by not5for5profit legal entities. 18. "Non5distributable receipts" shall denote all those financial and unscheduled receipts which do not originate from the performance of one activi ty only and are connected with performing activities for which assignment of corporate tax is enjoyed. 19. "Expenses of provisions for liabilities" shall denote those expenses of provisions which have been accounted for and meet the criteria regar ding the recognition of a provision under the applicable accounting standards, including: а) the expected excess of the total amount of expenses over receipts and the expected losses under construction contracts; b) the receipts upon withdrawal from a company and those following the withdrawal, the receipts in the form of stocks or shares, and other long5term receipts of the staff. 20. "Borrowed capital" within the meaning of Art. 4 3, para. 6 shall denote the total amount of the liabilities of the enterprise, except for the amount of financing. 21. (amend. – SG 52/07, in force from 01.11.2007; a mend. – SG 106/08, in force from 01.01.2009) "Disposal of financial instrument” for the purpose of Art. 44 and 196 shall denote the transactions: а) with quotas of collective investment schemes, shares and rights, effected on a regulated market in the sense of Art. 73 of the Law on the Ma rkets of Financial Instruments; “rights” for the purposes of the first sentence shall be securities entitling to subscription of a certain number of sh ares in relation to a decision for increasing the capital; b) effected on the terms and conditions and in acco rdance with the procedure for repurchase from collective investment schemes admitted to publ ic offering in the country or in another Member State of the European Union, or in a state – party to the Agreement on the European Economic Area; c) effected under the conditions and order for tend er offering under Chapter Eleven, Section II of the Law on Public Offering of Securities or tran sactions of identical type in another Member State of the European Union, or in a state – party to the Agreement on the European Economic Area. 22. (amend. 5 SG 110/07, in force from 01.01.2008) "Acquisition price of securities or shares which is evidenced by way of documents" shall denot e the acquisition price of the respective securities or shares which the person has evidenced by way of documents in accordance with the procedure set forth in the respective statutory instruments. Where securities or shares of the same type, issued by the same person, have been acquired at different prices and, subsequently, a part thereof is sold, and it is impossible to prove which of them are sold, the acq uisition price of the securities or shares sold shall be the average weighted price determined on the ground s of the acquisition price of the State securities or shares at the time of the sale. The second sentence shall apply to all the actions of disposal of securities or shares. Where new stocks or shares have been acq uired as a result of a distribution which has brought about a decrease in the equity of the person distri buting the stocks or shares, a reappraisal shall be carried out of the acquisition price of the stocks or shares which has been evidenced by way of documents. Following the acquisition of the new sto cks or shares under the preceding sentence, the acquisition price of each stock or share, including the newly acquired ones, shall be equal to the aggregate of the acquisition prices of the stocks or shares prior to the acquisition of the new stocks or shares divided by the total number of the stocks or shares held after the acquisition, including the newly acquired ones. 23. "Peripheral devices" shall denote any devices w hich form part of a computer system or are controlled by a computer, but the latter can work without them. 24. "Research activity" shall denote the activity of development, design, creating and testing of new goods, materials, production technology and tec hnology for industrial systems and other objects of industrial property, as well as the improvement of existing products and technology. 25. "Tax loss from a source abroad" under Arts. 73 and 74 shall denote the aggregate of the losses of all business activity establishments in the respective foreign State. 26. "Financial institutions" shall denote: а) (amend. 5 SG 110/07, in force from 01.01.2007) t he credit and financial institutions under the Law on Credit Institutions; b) those insurers, reinsurers and foreign persons w hich carry out insurance or reinsurance activity under the Insurance Code through a business activity establishment; c) (amend. – SG 52/07, in force from 01.11.2007) in vestment agents under the Law on the Markets of Financial Instruments and management com panies under the Law on Publicly Available Securities; d) the companies performing activity of additional social insurance; e) (new 5 SG 110/07, in force from 01.01.2007) the health insurance companies under Art. 91 of the Law on Health Insurance. 27. (amend. 5 SG 95/09, in force from 01.01.2010) " Unmanufactured vegetable and animal products" shall denote any primary product obtained from plants or animals which is not subjected to any technological processing or reprocessing result ing in physical and chemical changes in the composition thereof and is indicated in the Attachment I of the European Union Treaty. 28. "Production activity" under Art. 184 shall deno te the process of creating a new product by way of mechanical, or physical, or chemical transformation (processing or reprocessing) of raw stuff and materials for the purpose of subsequent realization and biological transformation of live animals or plants. 29. (amend. 5 SG 110/07, in force from 01.01.2007) "Initial investment" shall denote an investment in new tangible and intangible assets, which represent acceptable expenses related to: 1. establishment of new activity; 2. expansion of existing activity; 3. diversification of the produced goods by creation of new goods; 4. general modification of the existing production process. The investment in an asset which replaces an existi ng asset shall not represent an initial investment. b) patents, licences and know5how. 30. (amend. 5 SG 110/07, in force from 01.01.2007) "Establishment in a difficult position" shall denote an establishment meeting one of the following criteria: а) for a limited liability company and a shareholdi ng company – where its registered capital decreases by more than 50 percent, the decrease in the preceding 12 months being more than 25 percent; b) for all other companies – where their equity decreases by more than 50 percent, the decrease in the preceding 12 months being more than 25 perce nt; c) (amend. 5 SG 110/07, in force from 01.01.2007) t he conditions under the Commercial Law for instituting bankruptcy proceedings are present, or the conditions for instituting bankruptcy proceedings under the legislation by registration are present. 31. (amend. 5 SG 110/07, in force from 01.01.2007) "De minimis aid" shall denote aid in the sense of 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 interest" shall denote the interest that would be paid under the same conditions on credit received in any form under a transaction bet ween persons that are not related parties. The mark et interest shall be determined according to the marke t conditions, due account being given to all the quantitative and qualitative characteristics of the transaction – form, amount, currency of the financ ial means provided, time period of the provision thereo f; type, amount and liquidity of the security; credit risk and other risks connected with the transaction ; profile of the borrower or the lessee, as well as any other conditions and circumstances affecting the am ount of the interest. 33. "Publicity expenses" shall denote the expenses of promoting goods and services, including gifts, which have the taxable person’s trade name o r trade mark on them, within the ordinary activity carried out by the person. 34. "Social expenses provided in kind" shall denote those social benefits under Art. 294 of the Labour Code which have been accounted for as expens es and have been provided either in accordance with the procedure set forth in Art. 293 of the Labour Code or by the managerial body of the enterpris e. The social expenses must be accessible to all worke rs and employees and persons employed under management and supervision contracts. No provision of social expenses in kind shall be present where the employer or assignor and the persons referred t o in the second sentence have any pecuniary relationships connected with the social benefits received. 35. "Operator" under Art. 209 shall denote a person that has obtained permission from the Minister of Finance and carries out activities of printing out, organizing, supervising and settling the accounts connected with vouchers for food in accord ance with the procedure set forth by way of an Ordinance of the Minister of Finance. 36. "Vouchers for food" shall denote a type of exchange papers provided through the employer to the workers and employees, including those under management contracts, these papers being used as a means of payment in restaurants, fast5food establ ishments and sites for trade in foodstuffs in accordance with a service contract signed with an operator. 37. "Car" shall denote the one defined in the Road Traffic Law. 38. "Additional bus lines" shall denote the bus lines of a well5established transport scheme the regime of which ensures the stopping of buses and t he passengers’ getting on and off the buses where the passengers so require, in places where stopping is permitted, the said lines complementing the mai n lines of urban transport without duplicating them completely. 39. "Expenses connected with maintenance, repair an d operation of transport vehicles" shall denote those accounting expenses connected with mai ntenance, repair and operation of transport vehicles which relate to: а) fuel, lubricants and other consumables; b) spare parts; c) repair work, including painting and tinsmith services; d) technical examination and parking; e) cosmetics and accessories. 40. "Transport vehicles" shall denote the ones defi ned in Chapter Two, Section Four of the Law on Local Taxes and Fees regardless to whether they are entered in a register maintained under Bulgarian legislation or not. 41. "Activities of operation of vessels" shall denote: а) carriage by sea with vessels the net tonnage of which is over 100 tons, the chartering thereof, as well as the sale of those vessels forming object s of tonnage taxation which were acquired earlier t han 5 years prior to their being sold; b) land carriage connected with carriage by sea, administrative and insurance services and other services provided to clients in connection with carriage by sea; c) financial operations and exchange rate differenc es relating to the management of floating capital used in the operation of vessels; d) unscheduled activities connected with the operation of vessels, the said activities not falling within the scope of the items "а" through "c" and the turnover thereof not exceeding 0.25 percent of t he turnover of the activities under the items "а" and "b". 42. "Days in operation" shall denote the days in wh ich the vessel is used for carriage and/or for performing activities connected with carriage. The days in operation shall not include the time for repairs or demurrage of the vessel, or the period of time in which, due to detention or force majeure events, the vessel does not perform carriage and/or does not perform activities connected with carriage. 43. "Net tonnage" shall denote the measure in tons of the useful (load) capacity of the vessel certified by way of the certificate of the vessel’s tonnage. 44. "Repeated violation" shall denote a violation c ommitted within a period of one year following the effective date of a penalty warrant by way of which the violator was sanctioned for the same type of violation. 45. (new 5 SG 110/07, in force from 01.01.2007) "Ag ricultural products", "processing of agricultural products" and "marketing of agricultural products" are those in the sense of Art. 2 of Commission Regulation (EC) No 1998/2006 of 15 Decem ber 2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid. 46. (new 5 SG 110/07, in force from 01.01.2007) "Acceptable expenses for tangible assets" for the purposes of Item 29 and 48 shall be land, buildings, machinery and facilities/equipment. The initial investment shall include also the machinery and fac ilities/equipment obtained through a financial leasing contract, where an obligation has been negotiated f or purchase of the asset after expiration of the terms. 47. (new 5 SG 110/07, in force from 01.01.2007) "Ac ceptable expenses for intangible assets" for the purposes of Item 29 and 48 shall be assets obtained as a result of a technological transfer, which has occurred through the acquisition of rights in p atents, licenses, know5how or non5patented technica l knowledge. 48. (new 5 SG 110/07, in force from 01.01.2007) "La rge investment project" means an initial investment including acceptable expenses for tangible and intangible assets, combined in a single economically integral entity, where the acceptable expenses exceed the BGN equivalent of EUR 50 million, calculated according to the official exchange rate of the BGN to EUR. The initial investment related to a large investment project shall be performed within 3 years. A large investment project ma y not be divided in sub5projects or stages, if the provisions of this law are circumvented in such way. 49. (new 5 SG 110/07, in force from 01.01.2007) "Ne t income of sales" shall be those under the Accountancy Law. 50. (new 5 SG 110/07, in force from 01.01.2007) "Me thod of the own capital" shall be in the sense of the accountancy legislation. 51. (new 5 SG 110/07, in force from 01.01.2007) "Me thod of the proportional consolidation" shall be in the sense of the accountancy legislation. 52. (new 5 SG 110/07, in force from 01.01.2007) "Jo int controlled undertaking" shall be in the sense of the accountancy legislation. 53. (new – SG 106/08, in force from 01.01.2009) “Ad ditional voluntary insurance” shall be that in the sense of § 1, Item 12 of the Additional Provisions of the Law on Taxes on the Income of Natural Persons. 54. (new – SG 106/08, in force from 01.01.2009) “Vo luntary health insurance” shall be that in the sense of § 1, Item 13 of the Additional Provisions of the Law on Taxes on the Income of Natural Persons. 55. (new – SG 106/08, in force from 01.01.2009) “Li fe insurances” shall be those in the sense of § 1, Item 14 of the Additional Provisions of the Law on Taxes on the Income of Natural Persons. 56. (new 5 SG 95/09, in force from 01.01.2010) “Ann ual business report” is the one under clause 20, par. 4 of the Law of Statistic. 57. (new 5 SG 95/09, in force from 01.01.2010) “Book income, book expenses, book financial result, assets, liabilities and equity of a foreign person from an European Union Member State, or fro m another country – a party under the European Economic Area Agreement, carrying out business activity in the country through a business place solely under the conditions of free provision of services” shall be those pursuant to the international accounting stan dards applicable in the country in the respective year. 58. (new5 SG 95/09, in force from 01.01.2010) “Book income, book expenditures, book financial result, assets, liabilities and equity of a foreign legal entity from an European Union Memb er State, or from another country – a party under the European Economic Are Agreement for the purposes of determination of the corporate tax under Art. 20 2a, par. 2, shall be those pursuant to the international accounting standards, applicable in the country in the respective year. 59. (new 5 SG 95/09, in force from 01.01.2010) “”Ad ministration of property in the place of business” shall be present also in cases of relocation of the place of business independently or toget her with the whole enterprise. 60. (new5 SG 95/09, in force from 01.01.2010) “Agri cultural equipment” for the purposes of Art. 189b, shall be self5driven, non5self5driven and fixed machines, facilities, plants and units, used in agriculture. § 2. This Law introduces the provisions of Directiv e 2001/86/ЕC of the Council supplementing the Statute for a European company with regard to t he involvement of employees and Directive 2003/72/ЕC of the Council supplementing the Statute for a European cooperative society with regard to the involvement of workers and employees. Transitional and concluding provisions § 3. This Law repeals the Law on Corporate Income Taxation (prom., SG, No. 115 of 1997; am., No. 19 of 1998; am., 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 6 3 of 2006). § 4. For tax purposes, the transformations of the f inancial result (accounting profit/loss) in consequence of the application of Art. 23 of the repealed Law on Corporate Income Taxation prior to 31 December 2006 shall be regarded as transformations of the accounting financial result in determining the tax financial result in accordance with the respective provision of this Law. § 5. Those accounting receipts and expenses of subs equent appraisals (reappraisals and devaluations) of amortizable assets which were assessed prior to 31 December 2003, and until 31 December 2006 are not recognized for tax purposes u nder Art. 23 of the repealed Law on Corporate Income Taxation, shall be recognized for tax purposes in the year in which the respective asset is written off from the tax amortization plan, with the except ion of missing assets. § 6. (1) The amortizable assets present in the tax amortization plan as at 31 December 2006, with the exception of those referred to in para. 2, shall be regarded as tax amortizable assets within the meaning of Art. 48. (2) The following assets present in the tax amortiz ation plan as at 1 January 2007 shall be written off from it: 1. the positive goodwill; 2. the assets which are not used in activity forming tax financial result; 3. the assets which are classified as held for sale or form part of a group to be released, this group being classified as held for sale; 4. the assets where the taxable person is wound up by way of liquidation or by way of being declared bankrupt. (3) (amend. 5 SG 110/07, in force from 01.01.2007) Art. 66 shall not apply in the cases of write5off of assets under para. 2, items 1 and 2. § 7. (1) The tax amortizable value of a tax amortizable asset as at 1 January 2007 shall be its amortizable value as at 31 December 2006 under the repealed Law on Corporate Income Taxation. (2) The tax amortization of a tax amortizable asset as at 1 January 2007 shall be the recognized amount of the amortization expenses of the respecti ve asset as at 31 December 2006 under the repealed Law on Corporate Income Taxation. (3) The tax value of a tax amortizable asset as at 1 January 2007 shall be its tax balance5sheet value as at 31 December 2006 under the repealed Law on Corporate Income Taxation. § 8. The values of the tax amortizable assets prese nt in the tax amortization plan as at 1 January 2007 shall be the ones as at 31 December 2006 witho ut any changes. § 9. (1) The reappraisal reserve in the tax amortiz ation plan shall be written off from it as at 1 January 2007. The write5off is carried out in accordance with the procedure set forth in § 10 or § 11. It is up to the taxable person to choose whether to apply § 10 or § 11. (2) The reappraisal reserve within the meaning of p ara. 1 shall be the reappraisal reserve (the subsequent appraisals reserve) that is included in the tax amortization plan as at 31 December 2006. (3) Where the tax amortization plan as at 31 Decemb er 2006 includes reappraisal reserve (subsequent appraisals reserve) which differs from the one that should have been included according to Art. 22 of the repealed Law on Corporate Income Taxation, the said reappraisal reserve shall be revised for the purposes of para. 1. (4) Sole proprietors shall write off the reappraisa l reserve in accordance with the procedure applicable to the persons taxable under this Law. § 10. (1) The taxable persons shall make a one5time revision of the values of the amortizable assets in the tax amortization plan as at 1 January 2007 as a result of the write5off of the reappraisal reserve. (2) The recognized amortization expenses of the res pective asset as at 31 December 2006 shall be increased by the amortizable asset’s reappraisal reserve that has been written off, and as a result thereof the tax amortization of the asset assessed as at 1 January 2007 shall increase while the tax v alue of the asset as at 1 January 2007 shall decrease. Following the said increase, the tax amortization of the respective asset may not exceed the tax amortizable value of the asset as at 1 January 2007. (3) Where a specific asset’s reappraisal reserve exceeds the tax balance5sheet value of the asset as at 31 December 2006, the asset shall be written off from the tax amortization plan as at 1 January 2007, and the amount of the excess shall be the amo unt of the increase of the recognized amortization expenses of other assets of the same category, dete rmined under Art. 22 of the repealed Law on Corporate Income Taxation. Where the values of the assets of this category are insufficient for the fulfilment of the requirement under the first sentence, the recognized amortization expenses of assets of the other categories shall be increased. (4) Following the write5off of the reappraisal reserve, the total amount of the tax values of all assets present in the tax amortization plan as at 1 January 2007 must be equal to the total amount of the tax balance5sheet values of all the assets as at 31 December 2006 decreased by the reappraisal reserve that has been written off. (5) Paras. 1 through 4 shall not apply where the total amount of the reappraisal reserve that has been written off exceeds the total amount of the ta x balance5sheet values of all the assets present in the tax amortization plan as at 31 December 2006. The t axable persons shall write off from the tax amortization plan as at 1 January 2007 all the assets present therein as at 31 December 2006. In the course of determining the tax financial result, inc luding the determining of the quarterly advance contributions under § 11, the accounting financial result shall be increased by the difference between the total amount of the reappraisal reserve and the tot al amount of the tax balance5sheet values of all th e assets as at 31 December 2006. § 11. (1) In the course of determining the tax financial result, including the determining of the quarterly advance contributions, the accounting fin ancial result shall be increased by the reappraisal reserve that has been written off as follows: 1. for the year 2007 – by one third of the reappraisal reserve that has been written off; 2. for the year 2008 – by one third of the reappraisal reserve that has been written off; 3. for the year 2009 – by one third of the reappraisal reserve that has been written off. (2) Upon winding5up of the taxable person, except f or the winding5up in the cases of transformation by way of changing the legal form under Art. 264 of the Commercial Law, for the purpose of determining the tax financial result for the year of winding5up the accounting financial re sult shall be increased by that part of the written5off reappraisal reserve with which the accounting finan cial result was not increased under para. 1. (3) The taxable person shall be entitled to make a one5time increase of the accounting financial result by the written5off reappraisal reserve for the purpose of determining the tax financial result for the year 2007, including the determining of the quarter ly advance contributions. In that case paras. 1 and 2 shall not apply. § 12. The provision of Art. 55, para. 1, item 6 shall apply to fixed tangible assets acquired after 31 December 2006. § 13. For the purposes of Art. 55 the amortizable a sset under § 1, item 55, letter "f" of the Supplementary Provisions of the repealed Law on Cor porate Income Taxation shall belong to the category V. § 14. For the purposes of Art. 55 the amortizable asset formed under the repealed Law on Corporate Income Taxation as a result of the unreco gnized part of the excess of the aggregate of accounting amortization quotas over the aggregate of recognized amortizations of the assets for the period commencing on 1 January 1998 and ending on 3 1 December 2002 shall belong to category VII. § 15. (amend. 5 SG 110/07, in force from 01.01.2007 ) The provision of Art. 59 shall not apply to a tax depreciable asset of which the assessment of its tax depreciation was suspended by 31 Decembe r 2006 under the repealed Law on Corporate Income Tax ation, because it is temporarily not involved in the activity. The assessment of tax depreciation of the asset referred to in the first sentence shall resume from the beginning of the month of resuming the exp loitation of the product. § 16. The provision of Art. 63 shall apply to subse quent expenses completed after 31 December 2006. § 17. For the purposes of Art. 66, para. 1, where t he residual value is not included in the amortizable value of the asset within the meaning of the repealed Law on Corporate Income Taxation, when determining the tax financial result the accou nting balance5sheet value of the asset shall be decreased by its residual value. § 18. Art. 68 shall apply to assets acquired after 31 December 2005. § 19. Art. 45 shall not apply to those cases in whi ch the financial result for tax purposes is increased by the subsequent appraisal reserve (reappraisal reserve) under Art. 23 of the repealed Law on Corporate Income Taxation. § 20. Those interest expenses which are not recogni zed after 1 January 2004 under Art. 26 of the repealed Law on Corporate Income Taxation and a re subject to deduction but have not been deducted until 31 December 2006, shall be deducted in accordance with the procedure under Art. 43 within a period of 5 years following the year of their non5recognition for tax purposes. § 21. That part of the provisions for receivables t hat has been taxed for tax purposes (under the accounting legislation effective until 31 December 2001) in the non5financial enterprises by which the financial result for the subsequent years is not decreased under Art. 23, para. 3 of the repealed Law on Corporate Income Taxation shall be regarded as unre cognized expense of a subsequent appraisal of a receivable under Art. 34 of this Law. § 22. Those losses formed after 1 January 2002 which are subject to carry5forward and have not been deducted until 31 December 2006 under the proc edure of Chapter Four of the repealed Law on Corporate Income Taxation shall be deducted under the procedure of Chapter Eleven. § 23. Art. 95 shall not apply to receipts and expen ses resulting from receipts and expenses accounted for prior to 1 January 2007 for which there was a difference between the amount accounted for under the accounting policy and the amount determined by a regulatory body under a statutory instrument. § 24. As for the corporate tax due for the year 2006, the right to abatement thereof under Art. 60, para. 1 or assignment thereof under Art. 61d or 61e of the repealed Law on Corporate Income Taxation shall also be enjoyed by a taxable person that has not filed a notification with the respective territorial directorate of the National Revenue Age ncy under Art. 51а of the repealed Law on Corporate Income Taxation, providing that the said person mee ts all requirements set forth in law regarding the respective abatement or assignment of corporate tax. § 25. The corporate tax shall be assigned in accord ance with the procedure set forth in Art. 187 until 31 December 2010. § 26. (revoked 5 SG 110/07, in force from 01.01.200 7) § 27. The annual taxable profit (loss), the annual corporate tax due, all alternative taxes, the taxes on expenses as well as the taxes withheld at the source for the year 2006 which are subject to b eing declared under the repealed Law on Corporate Income Taxation shall be declared by submission of the respective tax returns within the time limits fixed in the said Law. § 28. (1) The taxes due for the year 2006 under the repealed Law on Corporate Income Taxation shall be paid in accordance with the procedure and within the time limits fixed in the said Law. (2) The right under Art. 92, para. 5 shall also be enjoyed by the taxable persons declaring the corporate tax for the year 2006. § 29. The standard forms of the annual tax returns for the year 2006 under the repealed Law on Corporate Income Taxation shall be approved not lat er than 10 January 2007 by way of an Ordinance issued by the Minister of Finance and promulgated in the State Gazette. § 30. (amend. 5 SG 110/07, in force from 01.01.2007 ) Those provisions which are included in the historical value of a tax amortizable asset but are not included in the amortizable value thereof under the repealed Law on Corporate Income Taxation shall be deemed provisions out of the taxable depreciable value of the asset under Art. 53, Para1. § 31. (revoked 5 SG 110/07, in force from 01.01.200 8; new – SG 69/08, in force from 01.01.2009) The securities provided under the revoked Art. 109 shall be released. § 32. The Tax Insurance Procedure Code (prom., SG, No. 105 of 2005; am., Nos. 30, 33, 34, 59, 63, 73 and 82 of 2006) shall be amended and supplemented as follows: 1. In Art. 141: а) the word "30 days" in para. 1 shall be replaced by "60 days"; b) in para. 2: аа) "and has not cured the incompleteness within 15 days following the date when so required by the revenue body" shall be added at the end of the first sentence; bb) the word "absence" in the second sentence shall be replaced by "presence"; c) "or absence of a decision within the term under para. 1" shall be added after the words "application of a treaty on avoidance of double taxation" in para. 3; d) paras. 4 and 5 shall be amended as follows: "(4) The opinion of absence of grounds for applying a treaty on avoidance of double taxation shall be subject to being appealed against by the recipient of the income or by the payer if the latter is authorized thereof by the recipient of the income. The procedure for the appeal shall be the same as t he one for the appeal against audit reports and the st atement of appeal shall be filed with the territorial directorate with which the request was filed. (5) Where, according to the opinion, there are grou nds for applying a treaty on avoidance of double taxation under paras. 1 or 2, changes in the tax liability for the respective income shall be made only where the grounds under Art. 133, para. 2 are present." 2. The amount "25,000" in Art. 142, paras. 1 and 2 shall be replaced by "50,000". § 33. This Law takes effect on 1 January 2007. 5555555555555555555555555 The Law was adopted by the 40th National Assembly o n 14 December 2006 and has the official seal of the National Assembly affixed thereto. Transitional and concluding provisions TO THE LAW O THE MARKETS OF FIACIAL ISTRUMETS (PROM. 5 52/07, IN FORCE FROM 01.11.2007) § 27. (1) This Law shall enter into force from 1 No vember 2007 except § 7, Items 6, 7, 8, 18, 19, 22 – 24, 26 – 28, 30 – 40, Item 44, Letter "b", Items 47, 48, Item 49, Letter "a", Items 50 – 62, 67, 68, 70. 71, 72, 75, 76, 77, Item 83, Letters "a" an d "d", Item 85, Letter "a", Items 91, 93, 94, Item 98, Letter "a", Subletter "aa", second sentence regardi ng the replacement, Subletter "bb", second sentence regarding the replacement, Subletter "cc", second sentence regarding the replacement and Subletter "cc ", second sentence regarding the replacement, Item 99, Letters "d" and "e", Item 101, Letter "b" and Item 102, § 8, § 9, Item 4, Letter "a", Items 5 and 7, § 14, Item 1 and § 19 which shall enter into force t hree days after the promulgation of the Law in the State Gazette. (2) Paragraph 7, Item 6, 7 and 8 shall apply by 1 November 2007. Concluding provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE LAW O VALUE ADDED TAX (PROM. 5 SG 108/07, IN FORCE FROM 01.01.2007) § 36. This Law shall enter into force from the day of its promulgation in the State Gazette except § 35, which shall enter into force from 1 January 2007. Transitional and concluding provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE LAW O CORPORATE ICOME TAXATIO (PROM. 5 SG 110/07, IN FORCE FROM 01.01.2008) § 56. (in force from 01.01.2007) The overpaid corpo rate tax, profit tax and municipality tax under the revoked Law on Corporate Taxation (prom. 5 SG 115/97; corr. 5 SG 19/98; amend. 5 SG 21 and 153/98; SG 12, 50, 51, 64, 81, 103, 110 and 111/99; SG 105 and 108/00, SG 34 and 110/01, SG 45, 61, 62 and 119/02, SG 42 and 109/03, SG 18, 53 and 107/04, SG 39, 88, 91, 102, 103 and 105/05, SG 30, 34, 59 and 63/06; revoked – SG 105/06), which were not deducted, refund or set off by 31 January 2006, shall be deducted under the order of Art. 94. § 57. (in force from 01.01.2007) Any taxable persons who have been assigned a tax under Art. 58 of the revoked Law on Profit Taxation (prom. 5 S G 59/06; amend. 5 SG 110/96, SG 16, 49, 86 and 89/97; revoked – SG 115/97) or under the revoked Ar t. 20 of the Law on Encouragement of Investments, adopting the International Accounting Standards, shall not apply Chapter Thirteen on changing the accounting policy regarding the accounting of the assigned taxes. When estimating the tax financial result for the year of adopting the International Accounting Standards and for the following years, the accounting financial result shall be increased by the portion of the funding, estimated in relation to the assigned tax, that was not recogniz ed as an income before the adoption of the International Accounting Standards, while the amount of the increase shall be distributed across the years in question proportionally to the accounted expenses during these years related to the performan ce of the conditions for tax assignment. When the assi gned tax was invested in depreciable assets, the increase referred to in the second sentence shall be distributed by years on the basis of the accounte d expenses for depreciation of these assets during the relevant years. § 58. (in force from 01.01.2007) The tax relief und er Chapter Twenty5Two, Section IV, except Art. 187, may be used by 31 December 2013. The tax relief under Art. 184, in the form state aid for regional development, may be used when the performance of the relevant initial investment has started aft6er 31 December 2006, but before 1 January 2014. § 59. (in force from 01.01.2007) The tax relief und er Art. 184, of which the Minister of Finance has notified the European Commission under the orde r of Art. 8 of the State Aid Law, in the form of state aid for regional development, shall enter into force upon delivery of a positive decision by the European Commission regarding its compliance with t he Guidelines on National Regional Aid for 2007 – 2013 of the European Commission. Provided that th e European Commission delivers a positive decision by 31 March 2008, the tax relief may be applied for 2007 as well. After delivery of a positive decision by the European Commission the Minister of Finance shall not draw up personal notifications for the taxable persons, applying Art. 184, except for those, performing large investment projects und er Art. 189. § 60. The tax depreciable assets by 31 December 200 7, which have been written off for accounting purposes but have not been written off the tax depreciation plan on the grounds of Art. 22, Para 12, Item 2 of the revoked Law on Corporate Tax ation due to lack of economical benefit expected from them, or on the grounds of Art. 60, Para 3, Item 1, shall be written off the tax depreciation plan by 1 January 2008. The provision of Art. 66, Para 2 sh all apply, including for estimation of the quarterly advance contributions for 2008. The first and secon d sentence shall not apply to assets, which have been written off for accounting purposes as being entirely depreciated. § 61. The provision of Art. 140, Para 7 shall not a pply in case of transformation having a date of entry in the commercial register before 1 January 2008. § 62. Shall not be recognized for taxation purposes the accounting income and expenses, profits and losses, accounted by a partner in an undertakin g under joint control resulting from the method of proportional consolidation, where the undertaking under joint control is a taxable person. § 63. (1) In case of estimating the tax financial r esult of financial institutions their accounting financial result shall be reduced by the dividends distributed by local legal persons during the current year, where the investment is accounted according t o the method of the own capital. (2) In case of estimating the tax financial result of taxable persons other than financial institutions, their accounting financial result shall be reduced by the dividends distributed by local legal persons for the period from acquisition to writing off the investment, where the investment is account ed according to the method of the own capital. The red uction under the first sentence shall be made in the year of writing off the investment. (3) Para 1 and 2 shall not apply to: 1. dividends distributed from profits, made before acquisition of the investment from the taxable person, or 2. dividends distributed by licensed special investment companies under the Law on the Special Investment Companies. § 64. (1) In case of estimating the tax financial r esult of a local parent company, which is a financial institution, its accounting financial result shall be reduced by the dividends, distributed during the current year by its subsidiary company from a M ember State, if the investment in the subsidiary company is accounted according to the own capital method. (2) In case of estimating the tax financial result of a local parent company, which is not a financial institution, its accounting financial result shall be reduced by the dividends, distributed by its subsidiary company from a Member State for the peri od from acquisition to writing off the investment in the subsidiary company, if the investment in the subsidiary company is accounted according to the own capital method. The reduction under the first sentence shall be made in the year of writing off the investment. (3) Para 1 and 2 shall apply also from a place of e conomic activity in the country in case of distribution of dividends from a foreign person, wh ere the conditions of Art. 105, Para 2, Item 1 – 3 have been met. (4) Where dividends under the order of Para 1 or 3 have been distributed within two years from the moment of acquisition of at least 15 percent of the capital of the company distributing the dividends, the taxable person shall be entitled to reduce its financial result under the order of Para 1. In case that before expiration of the two years the taxable pers on ceases owning at least 15 percent of the capital of the company, the tax financial result and the due c orporate tax for the year of applying Para 1, shall be adjusted in a way, as if Para 1 has not been applied. For the period from the date when the corporate tax had to be deposited to the date of its depositing a late payment interest shall be due under the gener al order. (5) Para 1 – 4 shall not apply to dividends distributed from profits, gained before acquisition of the investment by the taxable person. § 65. Para 62, 63 and 64 of this Law shall apply wh en estimating the tax financial result for 2007. § 66. Para 16 and 17 of this Law shall apply to assets, acquired after 31 December 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . § 68. This Law shall enter into force from 1 Januar y 2008, except Para 7, 21, 24, 38 – 45, 49, 50, § 54, Items 3 – 7, § 55, Items 1 – 4 and § 56 – 59, which shall enter into force from 1 January 20 07. Concluding provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE ACCOUTACY LAW (PROM. – SG 69/08, IN FORCE FROM 05.09.2008) § 7. This Law shall enter into force from 5 Septemb er 2008 except § 3, which shall enter into force from the day of its promulgation in the State Gazette, and of § 6, which shall enter into force from 1 January 2009. Additional provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE LAW O CORPORATE ICOME TAXATIO (PROM. – SG 106/08, IN FORCE FROM 01.01.2009) § 16. Everywhere in this Law the words “Member Stat e of the European Community”, “Member States of the European Community” and “State outside the European Community” shall be replaced respectively by “Member State of the European Union”, “Member States of the European Union” and “State outside the European Union”. Transitional and concluding provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE LAW O CORPORATE ICOME TAXATIO (PROM. – SG 106/08, IN FORCE FROM 01.01.2009) § 17. In 2009 no reduction under Art. 177 shall tak e effect, where during 2008 tax relief under the revoked Art. 192 was used for the employed pers ons. § 18. Art. 189a shall apply to revenue from investm ents in assets acquired after 1 January 2009. § 19. This Law shall enter into force from 1 Januar y 2009 except § 12, Item 2 regarding Art. 209, Para 3, Items 3 and 4 which shall enter into force from 1 January 2010. Concluding provisions TO THE LAW O AMEDMET AD SUPPLEMETATIO OF THE LAW O TAXES O THE ICOME OF ATURAL PERSOS (PROM. 5 SG 32/09, IN FORCE FROM 01.01.2010) § 6. The Law shall enter into force from the 1st of January 2010. Concluding provisions TO THE LAW OF DEFECE AD ARMED FORCES (PROM. 5 SG 35/09, IN FORCE FROM 12.05.2009) § 46. The Law shall enter into force from the date of its promulgation in the State Gazette. Transitional and concluding provisions TO THE LAW FOR AMEDMET AD SUPPLEMETATIO OF THE LAW OF CORPOATE ICOME TAX (PROM. 5 SG 95/09, IN FORCE FROM 01.01.2009) § 39. Paragraphs 13, 28, 35 and 36 of this law shal l apply also to the annual business report for 2009. The annual financial statements for 2009 and the audit reports thereto shall not be submitted to the National Revenue Agency. § 40. The reduction of the corporate tax under the revoked Art. 186 shall be accrued with other state aid approved by a resolution of the European Commission or having been permitted under Art. 9 of the Law of state aid for the acquired long term tan gible and intangible assets, up to the maximum allowable intensity of the aid, determined by the Map of the National Regional State Aid. § 41. The tax relief under Art. 189b shall apply up on issuance of a positive decision by the European Commission for Conformity with the Rules i n the Field of State Aid. Should the European Commission issue a positive resolution by 31 March 2011, the tax relief may be applied also for 2010. Remittance of advance payments of corporate tax to agricultural producers shall not be allows up to the date of the positive resolution of the European Com mission. § 42. An administrator of a state aid under Art. 18 9b shall be the Minister of Agriculture and Foods. The Minister of Agriculture and Foods shall notify the European Commission following the provisions and the procedure, set in the Law for the state aid. § 43. The corporate tax shall be remitted following the provisions of Art. 189b by 31 December 2013. ……….. § 51. The Law shall enter into force from 1 January 2010, except for § 10, 11 and 14, which shall enter into force from 1 January 2009. Appendix o. 1 to Art. 100, item 1 (suppl. 5 SG 108/07, in force from 01.01.2007; revo ked– SG 69/08, in force from 01.01.2009) Appendix o. 2 to Art. 100, item 3 and Art. 108, pa ra. 2, item 1 (suppl. 5 SG 108/07, in force from 01.01.2007; revo ked– SG 69/08, in force from 01.01.2009) Appendix o. 3 to Art. 137, item 1 (suppl. 5 SG 108/07, in force from 01.01.2007) List of companies in the Member States of the Europ ean Union under Art. 137, item 1 (а) companies included in the Regulation (ЕC) No. 2 157/2001 of the Council on the Statute for a European company (SE) and Directive 2001/86/ЕC of the Council supplementing the Statute for a European company with regard to the involvement of employees, included in the Regulation (ЕC) No. 1435/2003 of the Council on the Statute for a Europ ean cooperative society (SCE) and Directive 2003/72/ЕC of the Council supplementing the Statute for a European cooperative society with regard to the involvement of workers and employees; (b) companies under Belgian legislation, known as " societe anonyme"/"naamloze vennootschap", "societe en commandite par actions"/ "commanditaire vennootschap op aandelen", "societe privee а responsabilite limitee"/ "besloten vennootschap met beperkte aansprakelijkheid", "societe cooperative а responsabilite limitee"/ "cooperatieve vennootschap met beperkte aansprakelijkheid", "societe cooperative а responsabilite ilimitee"/ "cooperatieve vennootschap met onbeperkte aansprakelijkheid", "societe en nom coll ectif"/ "vennootschap onder firma", "societe en commandite simple"/ "gewone commanditaire vennootsc hap", public establishments which have adopted one of the aforesaid legal forms, as well as other companies set up under Belgian legislation, which are taxable with Belgian corporate tax; (c) companies under Czech legislation, known as: "a kciova spolecnost", "spolecnost s rucenim omezenym"; (d) companies under Danish legislation, known as: " aktieselskab" and "anpartsselskab"; other companies which are taxed under the Corporate Tax L aw, inasmuch as the taxable income thereof is calculated and taxed under the general rules of tax legislation relating to "aktieselskaber"; (e) companies under German legislation, known as "A ktiengesellschaft", "Kommanditgesellschaft auf Aktien", "Gesellschaft mit beschrankter Haftung", "Versicherungsverein auf Gegenseitigkeit", "Erwerbs5und Wirtschaftsgenos senschaft", "Betriebe gewerblicher Art von juristischen Personen des offentlichen Rechts", as well as other companies set up under German legislation and taxable with German corporate tax; (f) companies under Estonian legislation, known as: "taisuhing", "usaldusuhing", osauhing", "aktsiaselts", "tulundusuhistu"; (g) companies under Greek legislation, known as: "anwnumh etaireia", "etaireia periwrismenhx euqunhz" (Е.Р.Е); (h) companies under Spanish legislation, known as: "sociedad anonima", "sociedad comanditaria por acciones", "sociedad de responsabilidad limitada", as well as public establishments which are subjects of private law; (i) companies under French legislation, known as "societe anonyme", "societe en commandite par actions", "societe а responsabilite limitee", "societes par actions simplifiees", "societes d'assu rances mutuelles", "caisses d'epargne et de prevoyance", " societes civiles", which are normally taxed with corporate tax, "cooperatives", "unions de cooperatives", industrial and commercial public organization s and enterprises, as well as other companies set up under French legislation, which are taxable with French corporate tax; (j) companies set up or existing under Irish legislation, enterprises established under the Law on Industrial and Mutual Insurance Funds, construction unions under the Laws on construction unions and trustee savings banks within the meaning of the Law on Trustee Savings Banks, 1989; (k) companies under Italian legislation, known as: "societа per azioni", "societа in accomandita per azioni", "societа a responsabilitа limitata", "societа cooperative", "societа di mutua assicurazio ne", as well as private or public persons the activity of which is totally or predominantly commercial; (l) under Cyprian legislation: "etaireiex", determi ned under the laws on taxation of incomes; (m) companies under Latvian legislation, known as: "akciju sabiedriba", "sabiedriba ar ierobezotu atbildibu"; (n) companies set up under the legislation of Lithuania; (о) companies under the legislation of Luxembourg, known as: "societe anonyme", "societe en commandite par actions", "societe а responsabilite limitee", "societe cooperative", "societe cooperative organisee comme une societe anonyme", "association d'assurances mutuelles", "association d'epargne5 pension", "entreprise de nature commerciale, industrielle ou miniere de l'Etat, des communes, des syndicats de communes, des etablissements publics et des autres personnes morales de droit public", as well as other companies set up under the legislation of Luxembourg which are taxable with corporate ta x in Luxembourg; (p) companies under Hungarian legislation, known as : "kozkereseti tarsasag", "beteti tarsasag", "kozos vallalat", "korlatolt felelossegu tarsasag", "reszvenytarsasag", "egyesules", "k0zhasznu tarsas ag", "szovetkezet"; (q) companies under Maltese legislation, known as: "Kumpaniji ta' Responsabilita' Limitata", "Socjetajiet en commandite li l5kapital taghom maqsum 'f'azzjonijiet"; (r) companies under Dutch legislation, known as: "n aamloze vennootschap", "besloten vennootschap met beperkte aansprakelijkheid", "Open commanditaire vennootschap", "Cooperatie", "onderlinge waarborgmaatschappij", "Fonds voor geme ne rekening", "vereniging op Cooperatieve grondslag" and "vereniging welke op onderlinge grondslag als verzekeraar of kredietinstelling optreedt", as well as other companies set up under Dutch legis lation, which are taxable with Dutch corporate tax; (s) companies under Austrian legislation, known as: "Aktiengesellschaft", "Gesellschaft mit beschrankter Haftung", "Erwerbs5 and Wirtschaftsgenossenschaften"; (t) companies under Polish legislation, known as: " spolka akcyjna", "spolka z ograniczona odpowiedzialnoscia"; (u) commercial companies or civil law companies whi ch have a commercial form, as well as other legal entities carrying out commercial or industrial activity which are set up under Portuguese legislation; (v) companies under Slovenian legislation, known as : "delniska druzba", "komanditna druzba", "druzba z omejeno odgovornostjo"; (w) companies under the legislation of Slovakia, known as: "akciova spolocnost ", "spolocnost s rucenim obmedzenum", "komanditna spolocnost"; (x) companies under Finnish legislation, known as: "osakeyhtio"/"aktiebolag", "osuuskunta"/"andelslag", "saastopankki"/"sparbank" and "vakuutusyhtio"/"forsakringsbolag"; (y) companies under Swedish legislation, known as: "aktiebolag", "forsakringsaktiebolag", "ekonomiska foreningar", "sparbanker", "omsesidiga forsakringsbolag"; (z) companies set up under the legislation of the United Kingdom of Great Britain and North Ireland; (aa) (new – SG 108/07, in force from 01.01.2007) co mpanies under the Romanian legislation, known as "sosietati pe actiuni", "sosietati in comandita pe actiuni", "sosietati cu raspundere limitata". Appendix o. 4 to Art. 137, item 3 (suppl. 5 SG 108/07, in force from 01.01.2007) List of taxes in the Member States of the European Union 5 impot des societes/vennootschapsbelasting in Belg ium, 5 selskabsskat in Denmark, 5 Korperschaftsteuer in the Federal Republic of Germany, 5 joroz eisodhmatoz nomikwn proswpwn kerdoskopikou carakthra in Greece, 5 impuesto sobre sociedades in Spain, 5 impot sur les societes in France, 5 corporation tax in Ireland, 5 imposta sul reddito delle societа in Italy, 5 impot sur le revenu des collectivites in Luxembourg, 5 vennootschapsbelasting in Holland, 5 imposto sobre o rendimento das pessoas colectivas in Portugal, 5 corporation tax in the United Kingdom of Great Br itain and North Ireland, 5 Korperschaftsteuer in Austria, 5 yhteisojen tulovero/inkomstskatten for samfund in Finland, 5 statlig inkomstskatt in Sweden, 5 Dan z prijmu pravnickych osob in the Czech Republ ic, 5 Tulumaks in Estonia, 5 joroz eisodhmatox in Cyprus, 5 uznemumu ienakuma nodoklis in Latvia, 5 Pelno mokestis in Lithuania, 5 Tarsasagi ado in Hungary, 5 Taxxa fuq l5income in Malta, 5 Podatek dochodowy od osob prawnych in Poland, 5 Davek od dobicka pravnih oseb in Slovenia, 5 Dan z prijmov pravnickych osob in Slovakia. 5 impozit pe profit in Romania.