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3. Local Taxation

Local taxes are charged by the municipalities. According to the latest developments in the applicable law, the Municipal Council determines the amount of the taxes within the range established by the law. Till the end of 2007, the rates and amounts of local taxes were provided for by the law. The main local taxes are:

 

3.1. Real Estate Tax

 

Taxable properties are built up land and non-built construction plots. No tax shall be levied on agricultural land tracts and forests, with the exception of developed land in respect of the actually developed surface area and the adjoining ground.

Taxable persons are the owners or holders of limited real rights over the taxable property.

The Municipal Council determines the amount of the tax within a range of 0.1 to 4.5 per mille of the assessed value of the property. A reduction of 50% of the tax is allowed, if the property is a main residence.

 

3.2. Transfer Taxes

 

Transfer tax shall be levied on any properties acquired by donation, as well as on real estates, limited real rights thereto, and motor vehicles. The tax shall be paid by the transferee of the property or by the transferor in case the transferee is abroad.

 

The tax rate is determined by the Municipal Council within 0,1 and 3 per cent of the assessed value of the transferred property.

 

Donation and disposal without consideration of any property are subject to tax at the following rates:

•          from 0.4 to 0.8 per cent: applicable to donations between siblings and the children of siblings;

•          from 3,3 to 6,6 per cent: applicable to donations between any persons.

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.

 

3.3. Vehicle Tax

 

Vehicle tax is payable by the owners of road means of transport, ships and airplanes registered in Bulgaria. The rate of the 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.

In addition to the above taxes, the municipalities collect also some service charges for performance or maintenance of public services such as: waste collection charge, tourist charge, charges for various administrative services.