The taxation of a local entity or a foreign entity which constitutes a permanent establishment is as follows. Such expenses include repairs, maintenance, renovation and similar costs and interest on loans used for the acquisition of the property. Depreciation Land itself is not depreciable, although any immovable property affixed thereto is, provided that it is used for the business activities of the company and is booked as a fixed asset. As such, it is non-depreciable and is subject to annual revaluation to the market value. Losses cannot be offset against profits from previous years.
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.