In Brief

  • Share:
State Gazette Highlights

May 13, 2019

State Gazette Highlights

In issue 10 dated 10 May 2019, the following have been promulgated:

1. Law on Amendment to the Local Taxes and Fees Act

The transitional and final provisions of the Law include a new provision - § 4c, according to which for residential property under Art. 22, Para 2 of LTFA (i.e. the properties included in the List of Resorts of the Republic of Bulgaria, and determining their boundaries, which do not constitute primary homes, are not leased and are not registered as accommodation under the Tourism Act), the tax rate applicable for all other real estate properties shall be applied, determined at a rate of 0.1 to 4.5 by 1000 on the tax appraisal.

The tax rate on residential properties for 2019, determined at the higher rate pursuant to Art. 22, item 2 in the edition dated 20 April 2019, will be officially restated and notified to the taxable persons. The persons who made advance payment until 3- April 2019 of the tax on such property for the whole of 2019 will get 5% discount on the restated tax.

Following restatement of the tax due on real estate properties for 2019, amounts deposited in exceess shall be subject to offsetting or reimbursement pursuant to the Taxation and Social Security Procedural Code.

The change is pursuant from a Ruling 4 dated 9 April 2019 on Constitutional Case No 15/2018 declaring as anti-constitutional the provision of Art. 22, item 2 of LTFA. The above quoted provision, in its edition until 20 April 2019, determined higher tax rates for 2019 for real estate tax for properties located on the territory of a settlement included in the List of Resorts of the Republic of Bulgaria, and determining their boundaries (adopted by means of a resolution of the Council of Ministers dated 24 February 2012), when in the respective year the properties:

  • do not constitute primary homes
  • are not leased and
  • are not registered as accommodation under the Tourism Act.

 

According to the Constitutional Court, the possibility for the Council of Ministers to determine the tax rate by means of including or excluding resorts from the List of Resorts of the Republic of Bulgaria, and determining their boundaries, contradicts the constitutional principle of division of powers (Art. 8 of the Constitution). On the other hand, the different tax rate envisaged on Art. 22, item 2 of LTFA depending on the functional use of the residential property contradicts Art. 60, Para 1 of the Constitution, according to which taxes are divided into income and property taxes. According to the Ruling of the Constitutional Court, the amount of tax on real estate properties, which is a property tax, depends on the value of the taxable object, and not on its use.  

Effective as from 20 April 2019.  

 2. Law on Amendment and Supplement to the Bulgarian Commercial Register and the Register of Non-Profit Legal Entities Act

A new provision is created, according to which the Applications for declaration of annual financial statements and reports, when this is statutorily required, the applications for declaring declarations pursuant to Art. 38, Para 9, item 2 of the Accountancy Act, as well as the applications for registration of circumstances regarding actual owners pursuant to Art. 63, Para 1 and 4 of the Measures against Money Laundering Act and Art. 6, Para 3 of the Act on Economic and Financial Relations with Companies Registered in Preferential Tax Treatment Jurisdictions, the persons controlled thereby and their actual owners are considered following the order of receiving them, separate from other applications.

Effective as from 10 May 2019.

Go to full issue 38 dated 10 May 2019:

http://dv.parliament.bg/DVWeb/broeveList.faces

Go to In Brief: All