New provisions in the CITA and LTFA

New provisions in the CITA and LTFA

KPMG's Tax News outline and highlight legislative changes and trends in the area of tax.


Related content

The seventh issue of Tax News for 2016 presents a summary of the most significant changes in the Corporate Income tax Act and the Local Taxes and Fees Act.

Corporate Income Tax Act 

Electronic submission of tax returns

The amendments introduce mandatory electronic submission of all tax returns under the Corporate Income Tax Act (CITA). No tax returns due for submission after 31 December 2017 will be accepted on paper by the revenue authorities.

The existing possibility for a discount in the case of electronic submission of an annual corporate income tax return is revoked. FY 2016 is the last tax period for which tax liable persons can take advantage of the discount from the corporate income tax due.

New rules for correction of errors

When an accounting or other error related to the previous year is established after the submission of the annual corporate income tax (CIT) return for that year and after the expiration of the deadline for its submission (31 March), the tax liable persons can correct the error by a single filing of a new CIT return by 30 September of the current year. In the cases of accounting and other errors relating to the previous year and established after that date as well as when relating to other prior periods, the tax liable persons will apply the current rules for correction by submitting a written notification to the revenue authorities.

An additional provision is introduced in the CITA under which the new rules for correction of errors will be applicable when adjusting events are accounted for within the meaning of the applicable accounting standards.

The new rules for correction of errors are applicable for accounting and other errors identified in 2017 and in the case of accounting for adjusting events within the meaning of the applicable accounting standards which relate to 2016. In this case, tax liable persons can correct the tax result and CIT liability for 2016 by filing once a new annual CIT return by 30 September 2017.

Other amendments to the CITA

Newly-incorporated tax liable persons can declare their choice whether to tax the expenses in-kind related to corporate assets used for business and personal purposes with a one-off tax on expenses under the CITA or as income of individuals under the Personal Income Tax Act (PITA). The choice for the year of incorporation will be performed with the annual CIT return submitted for the same year.

Effective 1 January 2017, an annual activity report is not to be submitted by tax liable persons who did not perform business activities within the meaning of the Accountancy Act during the same tax period.

Local Taxes and Fees Act  

As of 1 January 2017, in the cases of concession for extraction, the tax liable person for real estate tax is considered to be the owner of the immovable property, except when a right to use the property is established in favor of the concessionaire. For the other types of concession, the real estate tax remains due by the concessionaire.

The implementation of the new methodology for calculation of the garbage fee is postponed by another year. The new base for calculation will become effective as of 2018.

The municipal authorities will have to determine the tax valuation of immovable property items within 5 days (instead of the current deadline of 14 days) after the submission of the standard claim form. 

© 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.