Last reviewed 15 Jul 2024
Loans may be provided to parent company by subsidiary, and vice versa. There are no legislative restrictions.
The use of subordinate debt is allowed.
Allowable deduction, with 10 % withholding tax deductible on interest payments if finance provided by a foreign person, except as relevant DTA otherwise provides Allowable in full, if finance provided by Bulgarian resident.
No special provisions
An interest surplus (excess of tax-deductible interest expense over taxable interest income of a financial year), is only deductible to the extent of 30% of the tax EBITDA. An allowance of EUR 3 million is applicable.
Shares can be subject to compulsory sale if shareholders do not comply with the provisions of commercial law. Compulsory sale requires a judicial decision.
Gains on the disposal of shares in stock exchange listed companies in EEA countries by legal persons are not liable to tax. Gains on the disposal of unlisted shares are taxable.
Capital gains on the sale of shares in limited liability companies are taxable.
As for public limited companies.
With effect from 1 January 2007, mergers, demergers, transfers of assets and the exchange of shares involving Bulgarian companies and companies in other EU member states are tax neutral for corporate income tax. Exception for tax loss carry forward and non-deductible interest resulting from thin-capitalization adjustment.
The sale of businesses is possible. The component parts of a business are tangible and intangible assets, liabilities and employees.
Valuation of assets at market value and recognition of goodwill if required
Non-tax deductible
Mergers by way of acquisition, amalgamation or creation of a new company, demergers
Valuation of fixed assets to fair market value is required in case of merger by acquisition. In general, an authorized independent valuer must be appointed for the valuation of fixed assets.
The difference between fair value and book value is recorded as goodwill.
Non-tax deductible.
Revaluation of assets is not recognized for tax purposes. Revaluation can be tax deducted in the year of disposal of the assets.
In general, the contribution of assets is allowed (services cannot be contributed).
Non-tax deductible.
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Opening Hours:
Mo-Th: 08:00 – 17:00
Fr: 08:00 – 14:00
Opening Hours:
Mo-Th: 08:00 – 17:00
Fr: 08:00 – 14:00
Opening Hours:
Mo-Th: 08:00 – 17:00
Fr: 08:00 – 14:00
