Local taxes are charged by the municipalities. According to the latest developments in the applicable law the local Municipal Council may determine the amount of the taxes within the range established by the law. The main local taxes are real estate tax, garbage fees, transfer taxes, donation and inheritance taxes, vehicle tax, tourist tax and final annual (license) tax:
Real Estate Tax
Taxable properties include built up land and non-built construction plots. No tax shall be levied on agricultural land tracts and forests.
Taxable persons are the owners or holders of limited real rights over the taxable property.
The tax rate is determined by each municipality within a range of 0.01% to 0.45% annually on the higher between the gross book value and the assessed value of the property. A reduction of 50% of the tax is allowed if the property is a main residence.
Garbage Collection Fee
The garbage collection fee is determined by each municipality within a range established by law. Generally it is levied on the gross book value of the real estate. Alternatively, it may be determined on the basis of the number and volume of waste containers used.
Tax shall be levied on any properties acquired by donation, as well as on any onerously acquired real estates, limited real rights thereto, and motor vehicles. The tax rate is determined by the Municipal Council within 0.1 % and 3% of the higher of sales price and assessed tax value of the transferred property.
Inheritance and Donation Tax
Donation and disposal without consideration of any property are subject to tax at the following rates:
Exact rate is determined by each municipality.
Exemption from transfer taxes is provided for privatization of assets, for in-kind contribution of assets to the share capital of a company as well as in some other cases provided in law.
Vehicle tax is payable by the owners of road vehicles, ships and airplanes registered in Bulgaria. The rate of tax depends on the type and the characteristics of the respective mean of transport, e.g. the vehicle tax for cars is determined by the engine power. The tax is due on an annual basis.
This tax is applicable to the persons offering overnight lodging.
The tax rate is determined by the Municipal Council from 0, 20 to 3 BGN for each night’s lodging in accordance to the city in the Municipality and the category of the premises for night’s lodging.
Final Annual (License) Tax
This tax is charged by the municipalities and is not income to the central budget. The license tax is applicable to natural persons and sole traders only (not legal entities) and under the following conditions:
Tax on Insurance Premiums
2% tax is due on insurance premiums for insurance contracts covering risks on the territory of Bulgaria. The tax should be collected by insurers but it is intended to be a burden to the insured.
Certain insurance premiums are exempt from the tax (e.g. life insurance, permanent health insurance).