The main types of local taxes and fees in Bulgaria include the tax on real estate, the tax on vehicles and the household waste fee (waste-collection fee). These taxes and fees are regulated by the Local Taxes and Fees Act (ЗМДТ) and are payable by the owners or users of properties and vehicles within the territory of the country.

Tax on real estate

The tax on real estate covers buildings and land plots within regulated areas on the territory of Bulgaria, with an exception applying to agricultural land, which is not taxed unless part of it has been built upon.

Who owes the tax?

The amounts are due from the owners of the properties, but where a right of use in rem has been established, the obligation passes to the user. In the case of co-ownership, each owner pays the tax in proportion to their share.

How is the tax rate determined?

The amount of the tax varies between 0.1 and 4.5 per thousand of the tax assessment of the property and is determined by the municipal administration according to the location of the property.

Tax return

For newly constructed buildings or structures that are not subject to being put into operation, the owner must notify the municipality within two months of completion, by filing a tax return for the levying of the annual tax.

Tax assessment and basis for taxation

Properties are taxed on the basis of their tax assessment, determined by the municipal administration according to the type, location, area, construction and condition of the property. For enterprises, the tax assessment is the higher of the book value and the municipal tax assessment. The tax is due even if the property is not used.

Exemptions and reductions

There are certain categories of property that are exempt from paying this tax, such as properties of state and municipal institutions, certain buildings of cultural value, and others. For a main dwelling, the tax is reduced by 50%.

Payment deadlines

The tax is paid in two instalments: the first by 30 June and the second by 31 October. A discount of 5% is available on prepayment by 30 April.

Household waste fee (waste-collection fee)

The household waste fee is intended to cover the costs of collecting, transporting and disposing of household waste, as well as maintaining the cleanliness of public areas.

Determining the amount

The fee is set annually by the municipal administrations and covers every settlement. According to the law, the quantity of waste should be the basis for the fee, but in practice this is rarely possible and the amount is usually calculated on the basis of the tax assessment of the property.

Example: For the properties of citizens and the residential properties of enterprises located within the territory of Sofia Municipality, the fee for 2019 is 1.6 per thousand of the tax assessment of the relevant property.

Payment deadlines

The fee is paid in four equal parts, with deadlines of: 30 April, 30 June, 30 September and 30 November.

Exemptions from the fee

No fee for waste collection and waste transport is charged if:

  • The service is not provided by the municipality.
  • The property is not used throughout the year and the owner has filed a declaration to that effect with the relevant municipality by the end of the previous year.
Tax on vehicles

This tax is due for all vehicles registered for movement on the road network in Bulgaria, and is determined according to the type of vehicle and the power of the engine.

Who owes the tax?

The tax is an obligation of the owners of the vehicles, while for electric cars, motorcycles and mopeds there is an exemption from tax.

Components of the tax for passenger cars

The tax on cars with a technically permissible mass of up to 3.5 t consists of:

  • A property component, determined by the power of the engine and adjusted according to the age of the vehicle.
  • An environmental component, determined according to the environmental category of the car and calculated by the municipal council.
Exemptions and reductions

For buses, goods vehicles and articulated tractor units with "Euro 4" emission standards, the tax is reduced by 20%, and for "Euro 5", "Euro 6" and "EEV" — by 50%.

Payment deadlines

The amounts due are paid in two equal parts — by 30 June and by 31 October of the relevant year. A 5% discount is available on prepayment of the entire annual amount by 30 April.

Additional requirements

Upon transfer of ownership of the vehicle, the tax must have been paid for the whole year by the previous owner. Regular payment of the tax is a necessary condition for passing the periodic technical inspection of the car.

The local taxes and fees thus established are intended to secure funds for maintaining local infrastructure and services, ensuring order and the sustainable development of the municipalities.

If you require further information, please contact us on tel.: 0887550706 or by e-mail: [email protected]