Source: https://www.ruskov-law.eu/bulgaria/article/tax-copyright-license.html
Timestamp: 2019-04-19 09:16:49+00:00

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Tanya Pavlova is a tax advisor with over 20 years of professional experience. She advises and supervises in German our clients in Bulgaria.
According to Art.3 Paragraph 1 of the Copyright and Related Rights Act (CRRA), any literary, artistic and scientific work resulting from creative endeavour and expressed by any mode and in any tangible form shall be the subject matter of copyright, the law expressly presupposes creative endeavor, i.e. it is not a result from employment-contract obligations.
Periodicals, encyclopaedia, collections, anthologies, bibliographies, databases and other similar subject matter including two or more works or products.
“Author’s and licence remuneration" shall denote payments of any type received for: the use or the right to use of any copyright regarding a work of literature, art or science, including films, records of radio or TV broadcast or software; the use or the right to the use of any patent, integrated circuit topology, trade mark, industrial design or useful model, plan, secret formula or process; the use or the right to the use of any industrial, commercial or scientific equipment or information regarding any industrial, commercial or scientific experiment. The payments for the acquisition of the right to use a software in which only a copy of the respective programme is incorporated, shall not be considered as author’s and licence remuneration in those cases where the rights of copying, reproducing, distributing, modifying, publishing and other forms of commercial use, are not granted.
"Industrial, commercial or research equipment" shall be all movable items, including vehicles, facilities, production facilities, facilities for providing services, etc., which the enterprise uses within its business activity.
According to Art.43 Paragraph 1 of ITNPA a person who has obtained income from business activity referred to in Art. 29 shall be liable for an advance tax on the difference between the taxable income and the contributions which the liable person is obliged to make at his/her own expense for the months of the quarter in which the taxable income was acquired, and in case the person is not self-insured – the difference between the taxable income and the deducted mandatory insurance contributions.
Generally according to Art.43 Paragraph 4 of ITNPA where payer of the income of business activity is an establishment or a self-insured person within the meaning of the Social Insurance Code, the tax amount shall be determined and the tax shall be withheld by the payer of the income upon its payment. An exception of this rule is included in Paragraph 5 which says that Paragraph 4 shall not apply, when the person acquiring the income is a self-insured person in the sense of the Code of Social Insurance and has declared the said circumstance in a written declaration before the payer of the income.
Here again we will emphasize that the income from the transfer of the right to use copyright works is not income from employment, but is acquired as a result of the transfer of the right to use the work as a subject of protection under the Bulgarian Copyright and Related Rights Act and for this reason it is excluded from the calculation of the income-related contribution base according to Art. 9 Paragraph of Code of Social Insurance (CSI).
In addition there are several possibilities for conducting creative activities by employment contract or by gainful employment, which is not based on any employment contract.
The CRRA explicitly regulates these cases under Art. 12, 41, 42, and 81. The social insurance in Bulgaria is executed on the basis of Art. 4, Para. 1 it. 1 of the Code of Social Insurance during an occupation resulting from an employment contract.
People, who, without having an employment obligation (with or without a written employment contract), carry out a professional activity at their own risk and expense, such as for example, the creators of science, art, education, journalists and others mentioned as an example in the Ordinance on Social Insurance of the self-insured persons and of Bulgarian citizens employed abroad and seamen, are subject to registration in the BULSTAT Register and the issuance of an identification number, thus becoming obliged to social insurance under Art. 4, Paragraph 3 item 1 of the CSI.
People, who have not signed an employment contract and are not self-employed, therefore are not subject to registration in the BULSTAT Register, are obliged to insure themselves according to Art. 4 Paragraph 3 item 5 or Art. 4, Paragraph 2 of the CSI in accordance with the remuneration which they obtain for the commission.
With regard to producers of sound recording studios and radio and television organizations as owners of related rights under Article 72 CRRA, there are some special regulations. In most cases these are legal entities. The possibility of pursuing their activity as sole traders is reflected in their income which might represent remuneration, which must be taken into account for the income-related contribution base under Art. 9 (1) CSI, provided that it has been acquired as a result of their employment.
Here we will also mention the case in which the foreigner earns an income from copyrights and licenses through a certain establishment in Bulgaria. This is subject to the final tax. The gross remuneration forms the basis of taxation and the tax rate is 10 %. The registration of the tax is to be carried out quarterly with a declaration according to Art. 55 paragraph 1 ITNPA and Art. 201 paragraph 1 of the Corporate Income Taxation Act, which has to be submitted in the competent directorate of the National Revenue Agency, where the payer of the income is registered. The deadline for submitting the tax declaration expires at the end of the month following the quarter in which the income is calculated.

References: Art.3
 Art.43
 Art. 29
 Art.43
 Art. 9
 Art. 12
 Art. 4
 Art. 4
 Art. 4
 Art. 4
 Art. 9
 Art. 55
 Art. 201