Capital gains Capital gains are treated as ordinary income subject to corporate income tax. The transfer is, however, subject to notary and municipal fees. The notary fees are paid on the higher of the market price or the book value of the property at varying rates, with the maximum being BGN 3, 500. Local taxes and rates The owner of a building or a plot is obliged to pay a real property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base.
Arable land is exempt from local taxes.
In addition to the real property tax, owners also pay waste-collection fees. Debt Under currency control regulations, a registration with the Bulgarian national Bank is required for loans granted by non-residents to Bulgarian entities. Where the debt financing exceeds the equity financing, deductibility of interest is subject to limitation, which is determined by a particular formula. If the interest costs exceed the allowable limit, the excess is non-deductible. The interest costs not deducted in a given year can be deducted in the subsequent tax period.