For 2010, the corporate tax in Bulgaria is 10%. Tax deducted at source in respect of foreign entities is subject to Double Taxation Prevention Treaties. Annual tax reports should be reported by 31 March.

The rate of the tax is 10 % nevertheless of the amount of the taxable income. An individual in Bulgaria is liable for tax on his income as an employee as well as on income as a self-employeed person. An employer is obligated to deduct the income tax payable to all the employees and to contribute in in the National Revenue Agency

VAT is 20% in general case. There is a VAT at the rate of 0% for a group of supplies and non-taxable supplies also. The taxable persons are entitled to VAT credit under the rules of the law.

Taxable with royalty shall be companies with annual turnover for the previous year less than 50 000 BGN. Commercial activities under royalty are specified by Law. If the company has been registered under VAT Law it is not obliged with Royalty Tax

The legal durations of keeping documents are as following: 1. Payroll sheets – 50 years; 2. Accounting ledgers and financial statements – 10 years; 3. other documents – 5 years; 4. documents for tax audits – 5 years as at the end of the legal prescription of the respective tax payment at a full rate.

The customary method of depriciation in Bulgaria for tax purposes is the straight line method. An asset that costs less than 700 BGN is should not be defined as a fixed asset but the companies have the right to choice depreciation limits under 700 BGN accoriding the internal rules.

The government institution responsible for the collection of the social-security contributions in Bulgaria is The National Social Security Institute.

The tax year in Bulgaria is the year ending on 31 December. Annual tax reports for the companies should be reported by 31 March