Tax benefits

Types of tax relief for individuals:

1. Tax relief for persons with reduced working capacity

• The amount of the annual tax bases of Persons with reduced work capacity - 50 and over 50 percent, determined by an effective decision of a competent authority, is reduced by BGN 7,920, including for the year of onset of the incapacity and for the year of expiration the validity period of the decision.

• The monthly tax base for income from employment relationships of persons with 50 and more than 50 percent reduced capacity for work is reduced by BGN 660, including for the month of onset of incapacity and for the month of expiration of the validity of the decision.

2. Tax relief for personal contributions for voluntary insurance and insurance

This tax relief is used when there is a contract concluded with the insurance/insurance company that the natural person - bearer of the obligation for the tax is insured/insured.

The amount of the annual tax bases is reduced by the personal contributions made during the year for additional voluntary insurance in a total amount up to 10 percent of the amount of the annual tax bases and by the personal contributions made during the year for voluntary health insurance and premiums/payments under insurance contracts" Life"

The monthly tax base from employment relationships is reduced by the personal contributions made during the month through the employer for additional voluntary insurance in a total amount of up to 10 percent of the monthly tax base and by the personal contributions for voluntary health insurance and premiums/contributions paid during the month at the person's expense under "Life" insurance contracts.

3. Tax relief for personal contributions for insurance service at retirement

The amount of the annual tax base is reduced by the social security contributions paid during the year at the person's expense:

• during studies, completed higher or semi-higher education, but for no longer than the period of study provided for in the curriculum for the completed specialty;

• the duration of the doctoral course, defined in a normative act for persons who have acquired the educational and scientific degree "doctor".

4. Tax relief for donations

The amount of annual tax bases is reduced by donations made during the year:

1. up to 5 percent, when the donation is for the benefit of:

• to some health facilities;

• medical institutions;

• social services for residential care;

• nurseries, kindergartens, schools, universities or academies;

• budget enterprises within the meaning of the Accounting Act;

• religions registered in the country;

• specialized enterprises or cooperatives of people with disabilities entered in the register

•          Bulgarian Red Cross;

• cultural institutes, community centers, as well as for the purposes of cultural, educational or scientific exchange under an international treaty to which the Republic of Bulgaria is a party;

• non-profit legal entities with public benefit status, with the exception of organizations supporting culture within the meaning of the Law on Patronage;

• "Energy efficiency and renewable sources" fund;

• communes for the treatment of drug addicts;

• the children's fund of the United Nations (UNICEF).

2. up to 50 percent, when the donation is for the benefit of the National Health Insurance Fund - for activities related to the treatment of children, etc.

5. Tax relief for young families

This relief can be used by local natural persons after deducting from the amount of the annual tax bases for the interest payments made during the year on a mortgage loan for the purchase of a home, provided the following conditions are met at the same time:

• the mortgage loan contract was concluded by the taxable person and/or by a spouse with whom they have a civil marriage;

• the taxable person and/or the spouse have not reached the age of 35 on the date of conclusion of the mortgage loan agreement;

• the mortgaged home is the only home for the family during the tax year.

6. Tax relief for children

This type of tax relief is used when the following conditions are simultaneously present:

The child:

• as of December 31 of the tax year, is a resident of a member state of the European Union, or of another state party to the Agreement on the European Economic Area;

• has not reached the age of majority;

• as of December 31 of the tax year, is not placed in a social or integrated health-social service for residential care on full state support.

As of 31.12 of the relevant year, the person who wishes to receive relief is:

1. a parent who is not deprived of parental rights, and provided that:

a) the child is not placed outside the family, and

b) no custody or guardianship has been established, or

2. guardian or custodian - in cases of guardianship or guardianship, or

3. a member of the family of relatives or relatives - in cases where the child is placed for a period of no less than 6 months with relatives or relatives or

4. foster parent - in cases of long-term placement of the child for upbringing in a foster family.

The tax relief is used including for the year in which the child was born, came of age or died.

7. Tax relief for disabled children

The sum of the annual tax bases of local individuals and foreign individuals established for tax purposes in a member state of the European Union or in another state party to the Agreement on the European Economic Area is reduced by BGN 2,000 for raising a child with 50 and with more than 50 per cent type and degree of disability, determined by an effective decision of a competent authority.

Conditions:

• as of December 31 of the tax year, the child is a resident of a member state of the European Union, or of another state party to the Agreement on the European Economic Area;

• as of January 1 of the tax year, the child has not reached the age of majority

·       as of December 31 of the tax year, the child is not placed in a social or integrated health and social service for residential care with full state support.

The tax relief is used by a person who, as of December 31 of the tax year, is:

1. a parent of a child with 50 and over 50 percent type and degree of disability, who is not deprived of parental rights, and provided that:

a) the child is not placed outside the family, and

b) no custody or guardianship has been established, or

2. guardian or custodian of a child with 50 and over 50 percent type and degree of disability - in cases of guardianship or guardianship, or

3. a member of the family of relatives or relatives of a child with 50 and over 50 per cent type and degree of disability - in cases where the child is placed for a period of not less than 6 months with relatives or relatives within the meaning of the Law on child protection, or

4. foster parent of a child with 50 and over 50 per cent type and degree of disability - in cases of long-term placement of the child to be raised in a foster family within the meaning of the Child Protection Act.

8. Tax relief for non-cash payments

Conditions:

1. the person acquired during the year income subject to taxation on the general annual tax base;

2. 100% of the cash income was received via bank transfer;

3. the non-cash payments made by the person amount to 80 or more than 80 percent of the total income

9. Tax relief for improvements and/or repairs to residential real estate

A natural person can receive tax relief for the payments made during the year for work in connection with improvements and/or repairs of one immovable residential property in a total amount of up to two thousand BGN, when the following conditions are simultaneously present:

1. the real residential property is on the territory of the Republic of Bulgaria;

2. the taxable person is the owner or co-owner of the real residential property;

3. the improvements and/or repairs were carried out by local persons of a member state of the European Union, or of another state party to the Agreement on the European Economic Area;

4. the real residential property is not included in the enterprise of a person who carries out economic activity as a trader within the meaning of the Commercial Law;

5. the taxable person has a document for the paid work in connection with the improvement and/or repair of the residential property,

6. the taxable person and the person who carried out the repair are not related persons