Taxation of income derived from the letting of immovable property
Income from renting real estate is required to be declared in the annual tax return for personal income tax. The law allows landlords to reduce their taxable income by 10%, without requiring documents or evidence that the costs are actually incurred. 1. Taxation of the income of natural persons transferring property to other natural persons. Landlords submit an annual income tax return (Form 2001) by 30 April of the year following the year of rental income. Natural persons renting property to other individuals must make advance payments for rental income. The contributions are quarterly and are transferred to the NRA’s account at the permanent address of the landlord. Contributions are determined by multiplying the amount of rental income received in the corresponding quarter, reduced by 10%, by a tax rate of 10 per cent. The term for the advance payments for rental income is until the end of April – for the first quarter, until the end of July – for the second and for the end of October – for the third quarter of the year. For the fourth quarter advance payments are not due. 2. Taxation of the income of natural persons renting property to enterprises and self-insured persons Landlords submit an annual income tax return (Form 2001) by 30 April of the year following the year of rental income. They are not required to file tax returns because they are deducted and paid by the payer of the income. With the recent changes in tax legislation from the beginning of 2013, individuals who rent out property to businesses and self-insured individuals will only be issued one service note and not every payment of the rent as it was until the end of 2012 Ie, the landlord will only apply to the annual tax return a single business note for earned rental income paid by an enterprise or self-insured person. Natural persons renting property to enterprises and / or self-employed persons shall not make advance payments for the tax on rental income. The due installments for the relevant quarters are made by their tenants. The tax on the annual tax return is paid by the landlords to the NRA’s account by 30 April of the year following the year of receipt of rental income. Source:НАП – http://www.nap.bg
In addition to an annual income tax return, landlords – natural persons renting property to other natural persons, must also submit quarterly returns for tax returns (Model Form 4001). The deadline for submitting these declarations is until the end of April – for the first quarter, until the end of July – for the second and for the end of October – for the third quarter of the year. For the fourth quarter, an advance tax return is not filed, no advance tax is paid.
The tax for supplementing the annual tax return shall be paid to the NRA’s account by 30 April of the year following the year of receipt of rental income.