The text of the original article
Depreciable assets: tax regime for Bulgarian companies (CITA)
For the purpose of determining annual tax depreciation, depreciable assets are divided into the following categories:
Category, type of asset, ATAR (%): I solid buildings, including investment property, installations, transmission equipment, electricity and communication lines, 4%; II machinery, production equipment and devices, 30%; III vehicles excluding cars; road and runway surfaces, 10%; IV computers, peripheral computer equipment (see definition below), software and the right to use software, mobile phones, 50%; V cars, 25%; VI tax-recognised tangible and intangible assets whose useful life is limited by contractual relationships or a legal obligation, 100 / years of legal restriction, not exceeding 33.333%; VII all other depreciable assets, 15%. Tax-recognised tangible fixed assets are amounts qualifying as depreciable fixed assets under NFRSSME whose value equals or exceeds the lower of:
the materiality threshold for fixed assets specified in the taxpayer’s accounting policy; BGN 700. Tax-recognised intangible assets are:
acquired non-financial resources that: a) have no physical substance; b) provide benefits for a period exceeding 12 months; c) have a limited useful life; d) have a value equal to or greater than the lower of: aa) the materiality threshold for intangible assets set in the taxpayer's accounting policy; bb) 700 lev; amounts accrued through commercial transactions that result in greater economic benefit from leased fixed assets or fixed assets intended for use; these amounts do not constitute a tangible fixed asset for tax purposes. Accounting expenses incurred in connection with the acquisition of a tax intangible fixed asset before it comes into existence are not recognised for tax purposes in the accounting year and are included in determining the asset's tax depreciable value. Where circumstances arise in the following year establishing that the taxpayer will not acquire the tax intangible fixed asset, the expenses not recognised under the first sentence are recognised for tax purposes in the year those circumstances arise, subject to CITA requirements.
Please note that acquiring an asset under a lease classified as a finance lease under accounting rules is not a basis for assigning that asset to category VI (Article 55(5) of the CITA). Such assets are assigned to the appropriate categories according to their characteristics and uses.
Under Article 55(2) of the CITA, annual tax depreciation rates are determined once a year and may not exceed the limits specified in column 3 of the table above.
Under Article 55(3), the annual tax depreciation rate for category II assets may not exceed 50% where all of the following conditions are met: 1. the assets form part of an initial investment (see definition below); 2. the assets are new and were not used before their acquisition.
Under Article 55(6), in force from 1 January 2009, point 1 of paragraph 3, requiring assets to form part of an initial investment, does not apply where assets were acquired under paragraph 3 in connection with an investment made to improve energy efficiency, under voluntary agreements concluded pursuant to Chapter Five, Section II of the Energy Efficiency Act.