Branch of a Bulgarian company in the United States. Accounting
Branch of a Bulgarian company
in the United States. Accounting 
Question:
A Bulgarian company registered its US division with a separate American EIN. Between the Bulgarian company and the American will move assets - goods; DMA materials. How should the American Enterprise accounting be registered? - The Bulgarian company buys a car from the United States with a US registration - will I have to declare it under Art. 54 ZMDT ???
Answer:
Hello,
As far as you know from your question, your company has opened a US branch with its own EIN. The same will carry out business activity in the United States. For the answer to your first question, we will refer to the opinion of the TD of NRA - Pazardjik from 2012 concerning the conduct of business activities of a branch of a company in "third countries" (outside the EU), which states:
"In the meaning of Article 3, paragraph 1 of the Corporate Income Taxation Act (CITA), a resident legal person is a person constituted under Bulgarian law and registered in a Bulgarian register, regardless of the fact that it can create a place of business activity of Article 3 (2) of CITA, local legal persons are taxed under this law on their profits and income from all sources in the Republic of Bulgaria and abroad, that is to say, local legal entities are taxed according to the corporate law for their worldwide when the localthe financial summary of this activity is included in the accounting financial result of the company referred to in Article 18 of the CITA which is subject to transformation under the second part of the law for the purpose of determining the tax financial result of the enterprise as a whole.
The above means that the expenses incurred in connection with the company's place of business in countries outside the European Union that have participated in the formation of the company's total accounting financial result will be taxable under the terms and conditions of the CITA.
Under the Agreement for the avoidance of double taxation of income and capital between Bulgaria and South, the profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein, If the enterprise carries on business in this way, the profits of the enterprise may be taxed in the other State but only a part of it that is attributable to that place of business . If it is a separate and separate undertaking performing the same or similar activities under the same or similar conditions and operating wholly independently of the enterprise in which it is a permanent establishment.
The requirements of the Bulgarian legislation on the taxation of a place of business registered by Bulgarian legal entities outside the territory of the country are contained in Part I "General Provisions", Chapter III "International Taxation" of CITA. With the entry into force of the provisions that are different from the provisions of the CITA, the provisions of the relevant international agreement shall apply (Article 13 of CITA).
The realization, reliance and taxation of the Bulgarian company's place of business will be in accordance with the requirements of the relevant foreign legislation and the envisaged in the above-mentioned DTC. Nevertheless, all revenues and expenses realized through the permanent establishment should be involved in the formation of the total financial result of the activities carried out in accordance with and in accordance with the requirements of the existing accounting, tax legislation in the country and in compliance with the requirements of the relevant DTC.
In the case of tax deductions and taxes levied in the foreign state, subject to the provisions of the relevant DTC, the envisaged methods for the abolition of double taxation apply, in particular the case of a progressive release method. The application of the methods for exemption from double taxation shall be realized by filling and submitting the annual tax return under Art. 92 of the Corporate Income Tax Act with its appendix No 3, which includes the tax financial result of the activity of the place of business and the following taxation.
When documenting the movement of funds, revenues, expenses, assets between the company and the permanent establishment, the provisions of Art. 10 of the CITA and the provisions of relevant legislation in the foreign state. Given that the two parts of the enterprise are not separate legal entities, the name and type of the documents issued between them are not legally regulated. They can be individualized by name - protocol, reference, internal notice, etc., as a mandatory condition to reflect the business operation correctly and to meet the requirements of Art. 7, para. 2 of the Accountancy Act (ZAc).
You should keep in mind that documents created for the purpose of reporting business activity at the place of business which are drawn up in the relevant foreign language when they enter the company should be accompanied by a translation into Bulgarian of the content of the business transactions reflected therein on the basis of Art. 3, para. 2 of the ZSc. All business operations reflecting expenditure, revenue accounting, acquisition of assets and other business activities in the foreign country should be documented by primary accounting documents within the meaning of Art. 10 of the CITA. "
On the second question, can I answer the following:
- You will have to declare the purchased car in Bulgaria if he / she "enters" in Bulgaria and registers with the Traffic Police. Once the car is not in Bulgaria, it will not declare and pay for it local taxes and fees. If it is used in the US to operate the branch of the company, it will be subject to local taxes and fees (if any) under local US legislation.
We will be happy if we were useful to you. If you have additional questions, do not hesitate to ask.
Success of your business in Bulgaria and your US branch.
Greetings.
