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Bulgaria/ 5.1 General legislation  

5.1.5 Tax laws

To encourage private persons and companies to sponsor the development of the arts and culture, a tax deduction is provided to resident and non-resident natural persons and legal entities. This amounts to up to 10% for donations for cultural purposes, as well as for conservation and restoration of historical and cultural monuments, or for grants. The rate of tax deduction was increased from 5% to 10% under amendments to the Corporate Income Tax Act adopted at the beginning of 2002.

Artists pay taxes under the Personal Income Tax Act, which allows them to deduct 50% of their expenses from taxable income received for the creation of works of art, science and culture, folk arts and crafts, and copyright royalties. Furthermore, taking into account the specificity of creative work, the legislation provides an opportunity for income averaging derived from creative work undertaken in the course of more than one year (e.g. the writing of a book), but not exceeding four years. Artists thus avoid the progressive annual income tax.

There is a unified rate of VAT of 20% for everything in Bulgaria - including cultural goods and services. According to an amendment of the VAT Act, under Article 42, the levy of VAT on the tickets for concerts, performances (excl. variety programmes, bars, clubs), museums, art galleries, zoos, botanic gardens, architectural and archaeological sites is cancelled as of 2005. The same Article stipulates VAT exemption on activities carried out by the Bulgarian National Radio, Bulgarian National Television and Bulgarian News Agency and for which these institutions receive a subsidy from the state.

There is a debate going on in the National Assembly on a bill proposing some tax concessions which would support Bulgarian culture. 

Chapter published: 20-01-2011

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