REPUBLIC OF BULGARIA NATIONAL ASSEMBLY. Local Taxes And Fees Act. Promulgated, Izv., No. 104/

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1 REPUBLIC OF BULGARIA NATIONAL ASSEMBLY Local Taxes And Fees Act Promulgated, Izv., No. 104/ Correction, No. 10/1952, Amended, Izv., Nos. 12 & 104/1954; 91/1957; 13/1958; 57 & 89/1959; 21 & 91/1960; State Gazette No. 85/1963; 1 & 52/1965; 53/1973; 87/1974; 21/1975; 102/1977; 88/1978; 36/1979; 99/1981; 55/1984; 73/1987; 33 & 97/1988; 21 & 30/1990; 82/1991; 59/1993; 40 & 87/1995; 14, 20, 37 & 40/1996 I. GENERAL 1. (As amended - SG, No. 36/1979) Municipal councils and municipalities which prepare budgets, shall collect the following taxes: a) real property tax; b) inheritance tax; c) (deleted - SG, No. 99/1981). 2. (As amended - SG, No. 36/1979) Municipal councils and municipalities which have a budget shall collect fees for their services in the following cases: a) on receipt of property as donation and against compensation; b) (as amended - Izv., No. 104/1954) for technical services rendered; c) for a right to use of transportation vehicles; d) for use of quarry materials; e) for use of markets and market places; f) for use of water and sewerage systems and household waste disposal; g) (as amended - Izv., No. 21/1960) fees for use of summer resorts, kindergartens, child care centers, open-air day care, hostels, etc.; h) (repealed - SG, No. 85/1963); i) (as amended - Izv., No. 12/1954) veterinary services;

2 j) (as amended - Izv., No. 12/1954) certification and administrative services; k) (new - Izv., No. 13/1958) holidays or resort treatment at resorts of national and local importance. 3. Fees shall be simple and pro rata and shall be payable in revenue stamps "municipal councils" or in cash. (Para (2) - repealed, SG, No. 33/1988). 4. Fees collected pursuant to this Act shall be fixed in Tariffs by the Council of Ministers. (New - SG, No. 82/1991) Municipal councils, inclusive of Sofia Metropolitan Municipal council, shall determine specific amounts of fees for the use of their properties within the limits established by a Tariff of the Council of Ministers. (New - Izv., No. 12/1954, former para (2), SG, No. 82/1991) Fees for undertakings transferred from the national budget to the budgets of municipal councils, and vice versa, shall be collected in the amounts set in the Tariffs for central government and local fees, respectively, and shall be paid in as revenue to the respective budget which provides the funds for their maintenance. 4a. (New - SG, No. 85/1963) It shall be hereby assigned to the Council of Ministers to determine, upon proposal by the Minister of Economy and Planning, the ways for collection of taxes and fees due pursuant to this Act. II. REAL PROPERTY TAX 5. Tax shall be levied on buildings, yard lots and parcels. Tax shall be levied on up to two (2) decares for yard lots located outside the regulation plan of settlements. This restriction shall not apply to state and cooperative enterprises. (New - SG, No. 85/1963) Yard lots and parcels located in villa zones shall be taxed regardless of the size of their area. 6. (As amended - SG, Nos. 40 & 87/1995) The following shall be exempt from taxes: a) (as amended - SG, No. 82/1991) buildings (other than housing) of establishments and enterprises funded by the general budget, as well as those of the Bulgarian National Bank, the State Insurance Institute and the State Savings Bank, provided they are not leased out; b) (as amended - SG, No. 85/1963) buildings (other than housing) of state agricultural farms, cooperative agricultural farms, as well as built-

3 up and vacant lots and parcels included in their lands, except those leased out; c) (as amended - Izv., No. 12/1954 and No. 82/1991) buildings of political parties, public, political, professional, cultural, educational and sport organizations, except those leased out, or those for the use of which fees are charged; d) buildings which are property of foreign countries where diplomatic missions and consulates are situated, on a reciprocal basis; e) buildings used as temples; f) (as amended - SG, No. 37/1996) farm buildings of persons involved in agricultural production; g) buildings (other than housing) used directly by the Ministry of Transportation and Communications for the operational needs of railway, air and water transportation; h) parks, sport grounds, play grounds and the like, for public use; i) service buildings for construction of new buildings and facilities, up to the completion and commissioning of the latter. Together with the tax exempt buildings, except those under (f) and (i), their respective lots shall also be tax exempt; j) (new - Izv., No. 12/1954, as amended, SG, No. 85/1963) parcels and parts of yard lots and parcels, granted for personal use as field properties to members of agricultural cooperatives and to workers in state agricultural farms, provided they are cultivated by them, as well as private yard lots and parcels cultivated by agricultural cooperatives; k) (new - SG, No. 53/1973) newly-built housing facilities in cities and other settlements specified by the Council of Ministers, for a period of five (5) years after their final completion. l) (new - SG, No. 87/1995) Buildings, yards, lots owned by the Bulgarian Red Cross where they have not been provided to another person for use. (new - para (2) - SG, No. 97/1988, amended - SG 40/1995) Buildings, yard lots and parcels, located in resort settlements, shall not be tax exempt under para (1)(a), (b) and (c), with the exception of those used and managed by health, educational and social establishments supported from the government budget. (para (3) - repealed, SG, No. 37/1996)

4 7. Newly built buildings, for the part completed or used, shall be taxed as of the month following the completion or the start of use thereof, and newly built plant structures shall be taxed as of the date of commissioning. In the case of transfer of property title, the new owner shall be obliged to pay tax as of the month following the month of the transfer. (As amended - SG, No. 36/1979) Owners of newly built or acquired properties shall advise in writing within two weeks the municipal council, or the mayoralty, respectively, which keep the property registers. 8. In the case of partial or complete destruction, demolition or collapse of buildings, and of their transformation from taxable into tax exempt, the tax shall be terminated as of the month following the occurrence of the change, and amounts collected in excess of the amounts due shall be refunded to the taxpayer. 9. Taxes due shall be assessed on the basis of an appraisal of buildings, builtup and vacant lots and parcels as follows: a) (as amended - Izv. No. 12/1954) buildings or parts thereof used for housing purposes, as well as yard lots and parcels designated for construction of housing facilities, if they belong to state, cooperative and public enterprises, establishments and organizations - 2 o/oo of the appraisal value; b) other buildings, yard lots and parcels - 4 o/oo of the appraisal value; c) (new - SG, No. 102/1977) villa buildings, yard lots and parcels on which they are built - 6 o/oo. For villas used throughout the year for housing purposes, as well as for houses in villages used as villas, the tax shall be assessed pursuant to para (1)(b). (New - SG, No. 82/1991) For properties with tax appraisal in after 1 February 1991 prices, tax shall be due at 50 percent of the amount assessed pursuant to paras 1 and 2. 9a. (New - SG, No. 53/1973, amended - SG, No. 37/1996) Where the housing owned by an individual or by members of one family exceeds 120 sq.m gross built-up area, the owners who are members of one family shall pay an additional real property tax at the following rates: a) for housings in Sofia and in district cities and cities with population of over : for the area from 120 to 150 sq.m Leva/sq.m; for the area from 150 to 200 sq.m Leva/sq.m; for the area over 200 sq.m Leva/sq.m;

5 b) for housings in other cities and villages declared national resorts: for the area from 120 to 150 sq.m Leva/sq.m; for the area from 150 to 200 sq.m Leva/sq.m; for the area over 200 sq.m Leva/sq.m; 9b. (New - SG, No. 53/1973; as amended No. 36/1979, No. 37/1996) Where the villa owned by an individual or by members of one family is a onestoreyed building with built-up area over 60 sq.m, the area exceeding 60 sq.m shall be taxed with an additional real property tax; where the villa is a twostoreyed building of which one is considered half-storey and the built-up area is over 60 sq.m, the area exceeding 60 sq.m on each storey shall be taxed; where the villa is a two- or more full-storeyed building and the gross built-up area is over 60 sq.m, tax shall be levied on the area exceeding 60 sq.m, where the area on the second floor up to 60 sq.m shall be taxed at half rate. Additional real property tax shall be paid at the following rates: a) for villas in the resort districts of Sofia and in municipalities and mayoralties within the city of Sofia, in their villa zones and the respective lands belonging to the settlement, as well as for villas on the Black Sea coast and in national resorts: for the area from 60 to 120 sq.m Leva/sq.m; for the area from 120 to 150 sq.m Leva/sq.m; for the area from 150 to 200 sq.m Leva/sq.m; for the area over 200 sq.m Leva/sq.m; b) for villas in other settlements, their villa zones and the lands belonging to the settlement: for the area from 60 to 120 sq.m Leva/sq.m; for the area from 120 to 150 sq.m Leva/sq.m; for the area from 150 to 200 sq.m Leva/sq.m; for the area over 200 sq.m Leva/sq.m; c) buildings used as villa properties in villages which the Council of Ministers, pursuant to Article 5, para (2) of the Citizens Property Act, has not excluded as places for health and resort purposes, as well as in the lands belonging to the settlement: for the area from 60 to 120 sq.m Leva/sq.m;

6 for the area from 120 to 150 sq.m Leva/sq.m; for the area from 150 to 200 sq.m Leva/sq.m; for the area over 200 sq.m Leva/sq.m; 9c. (New - SG, No. 53/1973, as amended Nos. 21 & 23/1990, ) No. tax under Articles 9a and 9b shall be levied on: (a) and (b) - repealed - SG, No. 21/1990); c) buildings in border municipalities which are tax exempt under Article 9; d) frame-built housing facilities, regardless of their location. No tax pursuant to Article 9a shall be levied on residential buildings in villages and urban type settlements. No tax pursuant to Article 9b shall be levied on villas, used by owners and members of their families for housing purposes, provided they do not own other housing or villa in this country. Where the villa has gross built-up area of over 120 sq.m, real property tax shall be paid on it pursuant to Article 9a. (Para (4) - repealed, SG, No. 21/1990). The area under Articles 9a and 9b shall not include: 1. attic and cellar space; 2. farm, auxiliary and temporary structures located on the same parcel. (As amended - SG, No. 36/1979) Additional tax pursuant to Articles 9a and 9b shall be assessed on the basis of the statement filed by the owner of the property pursuant to Article 7, para (2). Measurement of surface area of properties shall be done where necessary by the Architecture and Public Works departments and offices with the municipal councils or mayoralties having such offices. 10. Tax shall be paid by enterprises, establishments, organizations and individuals who are the owners of taxable properties, regardless of whether the latter are being used or not. 11. Buildings, yard lots and parcels which have not been taxed, shall be taxed as of the beginning of the tax period, or as of the time when they have become taxable, if they are newly acquired. 12. Tax on buildings, yard lots and parcels of enterprises, establishments and organizations, shall be assessed by the respective enterprises, establishments and organizations.

7 Tax calculation shall be done on the initial balance value of buildings, yard lots and parcels, without deduction of depreciations, on the basis of accountancy data as of 1 January of the current year; where such a value is not available, tax assessment shall be carried out on the basis of a value assessed by a financial authority. 12a. (New - SG, No. 37/1996) The tax value of buildings, yard lots and parcels, or of parts thereof, owned by individuals shall be assessed under tax norm rate specified in Annex 1. Buildings are appraised in cubic meters, and yard lots and parcels are appraised in square meters, according to their category. 13. (As amended - SG, No. 82/1991, No. 37/1996) Tax on buildings, yard lots and parcels of natural and legal persons shall be assessed by the head of the tax office or bureau where the respective statement in writing has been filed, within a term specified by the Minister of Finance. 14. (As amended - SG, No. 82/1991) Enterprises, establishments and organizations shall submit annually, but not later than 1 February of the respective year, a separate bill for the tax due on each property for the year to the tax office or bureau of the region where the property is located. For newly built buildings commissioned in the course of the year such bills shall be filed within the month of commissioning of the buildings. Tax offices or bureaus check the bills and may request additional data, and may also compare filed bills with the accountancy books, layout plans and other documents. 15. (As amended - SG, No. 52/1965) Real property tax shall be paid in four equal parts within the following terms: up to 31 March, up to 30 June, up to 30 September and up to 30 November of the year for which the tax is assessed. Taxes assessed for previous years, as well as those for the current year assessed after expiry of some of the deadlines, shall be paid within the subsequent terms before the end of the year. (Para (2) shall become para (3) - SG, No. 52/1965) Those who have paid in advance for the entire year within the first term shall be entitled to a 5 percent discount. 16. In the case of failure to file tax bills and additional data thereto, failure to file statements in the due term, as well as for presenting untrue information, chief (senior) accountants and directors of enterprises, establishments and organizations shall be penalized personally with a fine of up to 200 Leva. (As amended - SG, No. 36/1979) Fines shall be imposed by the heads of territorial tax authorities of the respective region where the properties are located. 17. Should they fail to file statement within the specified terms, natural and legal persons shall be penalized with a fine of up to 100 Leva.

8 The same penalty shall apply to persons who fail to declare in writing within the specified terms, the completion or acquisition of properties taxable with real property tax. 17a. (New - SG, No. 82/1991) Establishment of violations, issuance, appeal and execution of penalty orders under Articles 16 and 17 shall be effected pursuant to the procedure established by the Administrative Violations and Penalties Act (Repealed - SG, No. 20/1996) III. INHERITANCE TAX 22. Tax shall be collected for properties (real estate, movable properties, rights, receivables, rents, securities, valuables, etc.) transferred as inheritance by law or by will. (As amended - SG, No. 1/1965) Tax shall be collected from Bulgarian citizens for properties in this country, as well as from foreign nationals only for properties in this country. (New - SG, No. 1/1965) Bulgarian citizens shall not be levied with inheritance tax for properties abroad. This provision shall also apply to taxes due on inheritances, established prior to the release hereof. 23. (As amended - SG, No. 82/1991, No. 37/1996) Properties acquired as inheritance shall be appraised as follows: chattels - as per their actual price at the time of establishment of the inheritance; motor vehicles - as per their insurance value; rights - upon the execution thereof; real properties - as per current tax value assessed as per tax norm rates determined in accordance with Annex 2. Land and properties for business purposes, stock and shares in commercial companies and cooperatives acquired as inheritance, shall be appraised at 30 percent of their actual value. 24. (As amended - SG, No. 37/1996) Proved obligations shall be deducted from the assets of the inheritance. Also receivables forfeited to the state as a result of refusal of heirs to assume possession, duly certified, shall be deducted therefrom. Funeral expenses up to 5000 Leva shall also be deducted. 25. (As amended - SG, No. 84/1963 and No. 36/1979) Upon establishment of inheritance the heirs and the legatees shall be obliged to file within six months statement to the municipal council or the mayoralty at the last registered address of the legator where the respective registers are kept, and should the legator has resided abroad - at the location of most of his properties in this country. The statement should list the inherited estate per type, location and appraisal.

9 For properties of persons declared missing on statement of death, the term for submission of statement shall be six months following the taking of possession of properties. For persons living abroad the term for submission of statement shall be six months. 26. The following shall be tax exempt: a) (As amended - SG, No. 85/1963 and No. 88/1978) ordinary household chattels; farm equipment of heirs who have lived together with the legator, who have taken care of him or who have participated in cultivation of the property; dowry of girls; art objects, libraries and the like; pensions, the pension of the testator for the month of death; securities and government bonds and bills; properties of persons who have perished in the fight against fascism and in defense of the power of the people, as well as properties of persons who have perished or died of wounds sustained during the war; customary presents from acquired inheritance up to 80 Leva, as well as life insurances and saving deposits up to the amount of 2000 Leva for each inheritance share inherited by spouses and heirs of linea recta of the first degree; b) inheritance share up to 4000 Leva for spouses and heirs of linea recta, and for the others - up to 800 Leva; c) where the legator has been taxed with inheritance tax on acquired real property not earlier than three years prior to his death, the heirs shall pay tax on such property on half the price thereof; d) (As amended - SG, No. 85/1963) the inheritance share of each heir - for receivables of the legator for equipment and additional contribution to agricultural cooperatives and for properties contributed by the heir and grouped in land blocks of agricultural cooperatives, as well as properties forfeited to the state due to refusal of the heir to assume possession within the term of submission of the declaration; e) (New - SG, No. 82/1991, amended - SG, No. 87/1995) properties inherited by the state, municipalities, the Bulgarian Red Cross, Bulgarian cultural, research, educational and social institutes maintained with funds from the budget, foundations, budget educational establishments and funds for support of victims of natural calamities and for restoration of monuments of historical and cultural importance. 27. The tax shall be assessed as per the following Table: up to 8000 Lv. 2% a) for inheritance share by law or by will acquired by spouses, of direct descending or ascending line:

10 up to Lv. 160 Lv. + 3 % for amounts over 8000 Lv. up to Lv. 400 Lv. + 4 % for amounts over Lv. up to Lv. 720 Lv. + 6 % for amounts over Lv. up to Lv Lv % for amounts over Lv. up to Lv Lv % for amounts over Lv. up to Lv Lv % for amounts over Lv. up to Lv Lv % for amounts over Lv. over Lv Lv % for amounts over Lv. b) for inheritance share by law or by will from relatives of the lateral branch of the family the tax shall be raised by 20 percent; c) for inheritance acquired by will from other persons the tax shall be raised by 50 percent. 28. (As amended - SG, No. 82/1991, No. 20/1996) Taxes shall be assessed for each heir or legatee separately by ruling of the tax authority, which may be appealed in the procedure established in Article of the Tax Procedure Act. 29. The tax shall be paid voluntarily within two months following the delivery of notification about determination of tax as per the ruling, thereafter it shall be collected with the interest due. 30. In case of obvious and factual errors the heirs may request from the head of the territorial tax authority to reconsider the ruling, within one year following its entry into force and provided it has not been appealed before the court. 31. For properties not declared in compliance with Article 25 the heirs and legatees shall be obliged to pay the tax due with the interest due and shall be penalized by fine of up to 300 Leva by an order, which may be appealed pursuant to Article Inheritances established prior to the entry into force of this Act shall be taxed pursuant to the earlier Act in force. Pending cases with the Supreme Court and with district courts shall be considered and adjudged thereby. Rulings not appealed prior to the entry into force of this Act shall be appealed pursuant to Article 28. IV. MILITARY TAX (Repealed - SG, No. 99/1981) V. FEES FOR RECEIPT OF PROPERTY AS DONATION AND AGAINST COMPENSATION

11 41. (As amended - SG, No. 87/1995) Fees shall be paid by organizations and natural and legal persons for transfer of ownership on properties (real estate, movable properties, rights, receivables, securities, valuables, etc.) as donation and against compensation for real properties, cattle, as well as for establishment of other corporeal rights on real property. For deals with the participation of state enterprises, fees shall be paid by the other party to the deal; for deals between two state establishments and for donations to the state no fees shall be paid. For deals with the participation of the Bulgarian Red Cross, fees shall be paid by the other party to the contract, while for donations in favor of the Bulgarian Red Cross fees shall not be paid. 41a. (New - SG, No. 85/1963) Exempt from donation fee shall be: a) customary gifts of value up to 80 Leva; b) installments to deposits with the State Savings Bank and other donations in favor of spouses and relatives of direct descending line of amount up to 500 Leva per person per year. Where a person receives several donations within one year from one and the same grantor, the fee shall be determined by adding up all donations. Fees for donations in favor of spouses and relatives of direct descending line shall be paid at a 25 percent discount. 41b. (New - SG, No. 53/1974, para (1), as amended - SG, No. 87/1974) No fees shall be collected with reference to and for the issuance of title deeds for transfer of ownership and for establishment of building rights on real property, both built-up and vacant, where new industrial, group or cooperative housing construction is to be done, for title deeds for ownership of housing in buildings built by housing construction cooperatives or under the procedure for group housing construction or building of additional storeys or extensions to buildings upon the division thereof, for documents for ownership in case of sale to citizens of housing built for that purpose by municipal councils, as well as for sale and exchange of housing pursuant to the Regulation for sale and exchange of state-owned housing in cities and settlements pursuant to Article 6, para (1)(l). Where the building has not been built within two years following the transfer of ownership or the establishment of right to build, fees not collected shall become due and shall be collected in compliance with the procedure for collection of state receivables. 42. Fees shall be pro rata and shall be assessed as follows: a) for donations - on the market price;

12 b) in all other cases: 1. for real properties: in the case of sale or establishment of easement or superficies - on the agreed or assessed price and where the assessed prices is lower than the market price - on the latter, and in case of exchange - on the value of the more expensive real property. 2. for cattle, in the case of sale - on the agreed price, and in the case of exchange - on the difference in prices. (New - SG, No. 53/1973, as amended - SG, No. 21/1975, No. 21/1990, No. 37/1996) For transfer of properties between relatives of linea recta, between brothers and sisters, and, for donations, also to nephews, fees shall be determined for built-up properties on the basis of tax values assessed under the tax norm rates established in Annex 2, and for vacant properties - on half thereof. (New - SG, No. 53/1973, as amended - SG, No. 21/1975) Where the transfer is effected to minors or majors relatives of direct descending line, fees under the preceding paragraph shall be collected at half rate. (New - SG, No. 87/1974, repealed, SG, No. 82/1991) (New - SG, No. 87/1974, repealed, SG, No. 82/1991) 43. (As amended - SG, No. 36/1979) Fees shall be collected by an authority of the tax administration prior to the preparation and certification of the document verifying the execution of the deal, and shall be paid in as revenue to the respective municipal council or mayoralty which has a budget, in the region where the real estate subject of the deal is located, and for cattle - in the region where the deal has been executed. 44. (As amended - SG, No. 36/1979) All private contracts under Article 41 with and without Notary Public certification shall be filed within one month following their conclusion for registration at the municipal council, mayoralty respectively, where the property books are kept. 45. Should part of the price be concealed, the fee on the concealed portion shall be paid jointly by the parties and the latter shall be fined up to the double amount of the fee. (Para (2) replaced by new paras SG, No. 85/1963) In such case the fee shall be assessed and the fine imposed by separate orders of the head of the territorial tax authority. (Para (3), as amended - SG, No. 82/1991) Fees shall be appealed pursuant to the procedure established by the Administrative Violations and Penalties Act.

13 For obvious and factual errors made in the course of determination of the donation fees, the persons concerned may request the head of the territorial tax authority to reconsider the resolution within one year following its entry into force. VI. FEES FOR TECHNICAL SERVICES (As amended - Izv., No. 104/1954) 46. (As amended - Izv., No. 104/1954) Fees shall be collected from users of technical services. 47. Technical services shall include issuance of sketch maps and plan copies, certificates, building permits, approval of plans, granting construction line permits, production of surveys, etc. (Para (2) - repealed - Izv., No. 104/1954) 48. (As amended - SG, No. 82/1991, SG, No. 87/1995) Exempt from fees for technical services shall be establishments at full funding from the government budget and the Bulgarian Red Cross. The Council of Ministers may exempt from payment of technical services fees for the cession of building rights for buildings for industrial purposes. 49. (Para (1) - repealed - Izv., No. 104/1954): a) (Repealed - Izv., No. 104/1954); b) (Repealed - Izv., No. 104/1954). Private water and sewerage branch deviations made by the municipal council on account of owners of properties, shall be paid within a period of three years. 50. (Repealed - Izv., No. 104/1954) 51. Fees paid for technical services provided shall be neither refunded, nor set off from taxes and fees. VII. FEES FOR RIGHT OF USE OF TRANSPORTATION VEHICLES 52. (As amended - SG, No. 85/1963 and No. 53/1973) Fees shall be paid by owners of cars, motor carts, motorcycles, scooters, motor and other boats, ships and aircraft. 53. Exempt from fees shall be transportation vehicles of:

14 a) (as amended - SG, No. 82/1991) Government establishments, military units and the Ministry of Interior which do not carry out business activities. b) diplomatic missions and consulates on terms of reciprocity; c) special transportation vehicles used by disabled persons for personal service; d) (New - SG, No. 87/1995) the Bulgarian Red Cross when they are used for the purposes of the organization. d) (Repealed - SG, No. 83/1963) 54. (As amended - SG, No. 33/1988) Fees shall be assessed annually and shall be paid by 31 March of the respective year, at latest. (Para (2), as amended - SG, No. 73/1987) For transportation vehicles acquired in the course of the year, fees shall be paid within one month at the amount of one twelfth of the annual fee due, for each month from the time of acquisition to the end of the year. (Para (3) - new - SG, No. 33/1988) In the case of transfer of ownership on motor transportation vehicles, the new owner shall not pay fees under paras (1) and (2), provided the previous owner has paid them for the period up to the end of the calendar year. (Para (4) - new - SG, No. 33/1988) Where a motor vehicle has been suspended from operation and later on the suspension has been removed, fees shall be paid pursuant to para (2). (Para (5), former (3) - SG, No. 33/1988) For destroyed transportation vehicles, paid in fees shall not be refunded. 55. (As amended - SG, No. 36/1979) Fees shall be collected by tax authorities and shall be paid in as revenue to the respective municipal council or mayoralty which has a budget, at the residence of the owner of the transportation vehicle. VIII. FEES FOR USE OF QUARRY MATERIALS 56. (As amended - SG, No. 85/1963) Fees shall be paid by users of quarry materials: all types of solid rock, clay, sandstone, limestone, sand, gravel, stones and the like. 57. Exempt from fees shall be: a) (as amended - Izv, No. 12/1954, SG, No. 85/1963, No. 36/1979) sand, argillo-aranaceous materials for manufacture of bricks, roof tiles and ridge tiles, gravel and stones, used by the local population for their

15 own needs for construction and utility purposes and in agricultural cooperatives, by permission of the municipal council or the mayoralty having a budget; b) (as amended - SG, No. 36/1979) materials designated and used for construction and purposes, directly provided and paid by departments funded by the general budget and by permission of the respective authority, as well as by the respective municipal council or mayoralty having a budget, which own the quarry; c) materials excavated by mining enterprises themselves within the territory of mines or in adjacent places, needed to build, maintain, support and fill pits and surface lands; d) materials designated for road, railway and port construction; e) (as amended - SG, No. 5/1963) materials utilized in the construction of reservoir dams, irrigation canals and other hydro melioration structures. 58. Fee rates shall be determined separately for each type of material per cubic meter, on the gross output which shall be established as follows: a) on the basis of manufacture registers kept as mandatory by each quarry; b) on the basis of quantities determined by temporary or one-time permits for excavation of quarry materials. (As amended - SG, No. 36/1979) In the first case, fees shall be paid monthly; in the second case - in advance as revenue to the respective municipal council or mayoralty having a budget in the area of mining of quarry materials. 59. (As amended - SG, No. 82/1991) Persons who violate the provisions of this chapter shall be fined up to 300 Leva by an order of the head of the territorial tax authority of the region where the violation has occurred. Establishment of violations, issuance, appeal and execution of penalty orders shall be done pursuant to the procedure established by the Administrative Violations and Penalties Act. IX. FEES FOR USE OF MARKETS AND MARKET PLACES 60. Fees shall be paid by: a) Enterprises, organizations, agricultural cooperatives and natural persons who sell at markets and market places produce from their agricultural farms;

16 b) craftsmen who sell articles manufactured by them, who have a permission to trade; c) organizers of panorama shows, shooting galleries etc.; d) citizens selling various articles. 61. Fees shall be determined per day, month and quarter, and shall be calculated depending on the way of trading (pedlars, street vendors) or per sq.m. occupied area. 62. Fees shall be collected by tax offices or bureaus and paid prior to use of markets, market places, squares, etc. Where a location is taken on lease for a long period of time, the payment term shall be established in an agreement. X. FEES FOR USE OF WATER AND SEWERAGE SYSTEMS AND HOUSEHOLD WASTE DISPOSAL 63. Fees shall be paid by enterprises, establishments, organizations and natural and legal persons for use of water and sewerage systems and for waste disposal. 64. Exempt from fees for waste disposal, where such fees are collected on the basis of the tax value of the property, shall be: a) establishments and enterprises funded by the general budget; b) (New - SG, No. 87/1995) the Bulgarian Red Cross; c) buildings used as temples; d) neighborhoods where the municipal councils have not arranged services for garbage removal. (Para (2) - new, SG, No. 97/1988) The provision of para (1)(a) shall not apply to buildings, yard lots and parcels located in resort settlements. 65. Fees shall be determined for each settlement and for each service separately as per calculation account, comprising the following amounts to be collected: a) maintenance costs for installations and facilities, inclusive of personal expenses; b) interests and payments on loans; c) depreciations.

17 66. (As amended - SG, No. 37/1996) Fees shall be paid by users of services and shall be calculated per cubic meter as follows: a) for use of water and sewerage systems, for use of water as measured by water meters, and where water meters are missing - under a subscription system; b) for waste disposal - on the basis of quantities of garbage measured by special devices, and where such devices are not available - on the basis of the tax value of the real properties established under the norms in Annex 1, and in the latter case fees shall be collected from owners of properties together with the real property tax. (New - SG, No. 2/1965) Fees for use of water and sewerage systems by the population, as well as fees for waste disposal shall be paid within the following terms: up to 31 March, up to 30 June, up to 30 September and up to 30 November of the year fro which they are due. (New - SG, No. 52/1965) The procedure and manner of fee assessment and collection, as well as the terms for payment of fees by enterprises, establishments and organizations shall be determined by the Minister of Economy and Planning. (New - SG, No. 52/1965) The above-mentioned fees assessed for previous years, as well as those due for the current year, when established after expiry of some of the terms, shall be paid within the subsequent terms before the end of the year. (Para (2) shall become para (5) - SG, No. 52/1965) Tenants in leased premises shall be obliged to pay lessors the respective portion of fees for waste disposal and use of water and sewerage systems, unless otherwise agreed. 67. (Repealed - SG, No. 85/1963) XI. FEES FOR USE OF SUMMER RESORTS, KINDERGARTENS, CHILD CARE CENTERS, OPEN-AIR DAY CARE, HOSTELS, ETC. 68. (As amended - Izv., No. 21/1960) Fees shall be paid by: a) pupils from the age of 7 to the age of 18, camping at camps for pioneers and secondary school pupils; b) (as amended - SG, No. 53/1973) parents whose children are in day, weekly and seasonal kindergartens. 69. (Para (1) as amended - Izv., No. 57/1959 and No. 21/1960) Exempt from fees under Article 68 (a) shall be: a) disabled persons from World War II and the Resistance with disability of over 50 percent and their children, widows and orphans

18 from World War II and the Resistance, inclusive of children of parents who have died in air bombings, blind persons and their children; b) third and subsequent children of parents with many children. Such parents shall pay fees for the first child at half rate, and for the second - at one quarter of the rate. No exemption from fees and no discounts shall apply to pupils who are put back a year, with the exception of those who are put back a year due to illness. 69a. (New - Izv., No. 89/1956, repealed, Izv., No. 21/1960) 70. (As amended - Izv., No. 21/1960) Rates of fees shall be determined per shift or per month. 71. (As amended - SG, No. 36/1976) Fees shall be collected by schools, organizers of camps, kindergartens or hostels, and shall be paid in as revenue to the budget of the municipal council or mayoralty having a budget from which the funding thereof is provided. Should the maintenance be on account of a state enterprise, fees shall be paid in as revenue to the respective enterprise. XII. FEES FOR GUARDING FIELD PROPERTIES 72. (Repealed - SG, No. 85/1963) 73. (Para (1) repealed - SG, No. 85/1963) (Para (2) repealed - Izv., No. 12/1954) 74. (Repealed - SG, No. 85/1963) XIII. FEES FOR VETERINARY SERVICES 75. (As amended - Izv., No. 12/1954) Fees shall be paid: For veterinary services, inclusive of the value of materials used, by: a) stock-fattening, auxiliary and other farms with business accounts, with the exception of those under the Ministry of Agriculture and Food Industry. b) for certification, expert analyses, tests of animals and materials upon request of the parties concerned, for issuance of transportation work tickets and use of cattle markets. 76. (As amended - Izv., No. 12/1954) Exempt from fees shall be: a) establishments funded by the national general budget;

19 b) (as amended - Izv., No. 91/1960) agricultural cooperatives, state agricultural farms, breeding farms and hippodromes with the Ministry of Agriculture and Food Industry, members of agricultural cooperatives and sole proprietors: for hospital treatment in veterinary establishments, inclusive of the value of materials used, cost for stay and food for ill animals; for laboratory, X-ray and other diagnostic tests, inclusive of agents used and other auxiliary materials; for clinical examinations, manipulations and surgery, with exception of castration and treatment of pet dogs, performed in veterinary hospitals and clinics, less the value of treatment, dressing and other materials, as of 1 January 1961; c) all other cases of control of contagious, parasitic and breed diseases, inclusive of materials used for planned and mass actions. 77. (Repealed - Izv., No. 12/1954, renewed - Izv., No. 91/1960) The ways and terms for payment of fees for veterinary service and the value of materials shall be established by a joint Regulation of the Minister of Economy and Planning and the Minister of Agriculture and Food Industry. 78. (As amended - SG, No. 85/1963, SG, No. 82/1991) Persons who violate the provisions of this chapter shall be fined up to 300 Leva by ruling of the head of the territorial tax authority in the region where the violation has occurred. Establishment of violations, issuance, appeal and execution of penalty orders shall be done pursuant to the procedure established by the Administrative Violations and Penalties Act. XIV. FEES FOR CERTIFICATION, SERVICES OF ADMINISTRATIVE NATURE AND FOR HOLIDAYS OR RESORT TREATMENT AT RESORTS (As amended - Izv., No. 12/1954 and No. 13/1958) 79. Fees shall be paid by natural and legal persons for: a) (as amended - Izv., No. 12/1954) certification by Notary Public of signatures, contracts, powers of attorney, etc. and for occupancy procedures for settlement by housing commissions in case of housing needs; b) issuance of certificates, letter-certificatories, permits and licenses; posting and positioning of notifications and advertisements; placement of monuments and tombs, and other services of administrative nature; c) (new - Izv., No. 13/1958) holidays or resort treatment at resorts. (As amended - SG, No. 36/1979) With municipal councils or mayoralties having a budget, on the territory of which resorts of national and local importance have been set up, a Public Works and

20 Landscaping of Resort Places Fund shall be established and monies for the fund shall be raised from: 1. (As amended - Izv., No. 57/1959) Fees paid by trade union organizations, establishments and public or cooperative organizations for each used voucher or other similar document for holidays or resort treatment, as well as by natural persons who visit resorts for the same purpose. In special cases, upon decision of the Council of Ministers, some organizations and private persons may be exempt from payment of such fees. 2. Quarterly charges at the rate of 20 percent of the gross revenue from operation of mineral baths, beaches and mudtreatment establishments. Fees shall be paid against special revenue stamps printed by the Ministry of Economy and Planning. The manner for collection and spending of Fund monies, as well as the type and denomination of revenue stamps, shall be regulated by Rules issued by the Minister of Economy and Planning, the Minister of People's Health and Social Welfare, in coordination with the Central Council of the Trade Unions. 80. (As amended - Izv., No. 12/1954) Exempt from fees shall be: a) petitions, applications, appeals, etc., filed to and through the care of municipal councils; b) certificates not mentioned in local fees tariffs; c) papers for official needs of establishments; d) papers related to the labor activity of the workforce, on cases of guardianship, for social assistance, protection of minors' interests and for child allowances; e) notifications and advertisements of establishments and enterprises funded by the national budget, and posters of political parties and public and political organizations when holding mass actions. f) (New - SG, No. 87/1995) the Bulgarian Red Cross. 81. Fees shall be paid prior to rendering of service and shall be collected by the financial authorities under municipal councils. 81a. (Repealed - SG, No. 59/1993) XV. INTERESTS ON DELAY 82. (Para (1) repealed - Izv., No. 91/1957)

21 (New - Izv., No. 12/1954) Interests on fees for use of water and sewerage systems and for waste disposal shall be collected starting one month after the determination of the amounts of fees due. XVI. TRANSITIONAL PROVISIONS 83. Appraisal values pursuant to Article 12 of the grandfathered Regulation- Act on Real Property Tax shall be in force during 1951 as well. Incomplete taxations shall be completed pursuant to grandfathered provisions in force for such taxations, in compliance with the procedure of the present Act. Appraisals of real properties with no roof for 1950, on the basis of which taxation is effected pursuant to the Act on properties acquired without consideration, shall be valid for 1951 as well. (New - SG, No. 53/1973) Additional tax pursuant to Articles 9a and 9b shall be due as of 1 January This Act shall enter into force as of 1 January 1952 and shall repeal Article 1, (b) and (c), Articles 5 through 10, 16 and 17 of the Revenues and Expenses of Municipal Councils Act; Articles 47 through 50 of the Compulsory Military Service Act; Article 6 (b) of the Decree on Mines and Mineral Resources; Articles 30 and 31 of the Rules for implementation thereof, and the Regulation in the State Gazette No. 77/1949; Article 22 of the Rents Act; Article 11 of the Decree on People's Courts of Justice; the Regulation-Act on school fees for people's high schools and secondary schools subordinate to the Ministry of People's Education; Article 22 of the People's Education Act, 7 of the Decree on amendment of the same Act, as well as all acts contrary to the present Act. 85. The Minister of Economy and Planning shall issue instructions for the enforcement of this Act. The execution of this Act shall be hereby assigned to the Minister of Economy and Planning. TRANSITIONAL AND CONCLUSIVE PROVISIONS (SG, No. 82/1991) 39. Farm lands received as inheritance pursuant to the Ownership and Use of Farm Lands Act, shall not be taxed with inheritance tax. 40. Paragraphs 2, 3, 4 and 5 shall enter into force as from 1 January 1991, and paragraphs 13, 15 and 16 shall apply to inheritances established as of the date of entry into force of this Act.

22 41. Articles 37, 38, 39 and 40 of the General Income Tax Act shall be hereby repealed. 42. The procedure for appeal and revision of taxes under Articles 18, 19, 20 and 21 of the Local Taxes and Fees Act shall apply to appeal and revision pursuant to the General Income Tax Act. TRANSITIONAL AND CONCLUSIVE PROVISIONS Promulgated SG No. 37/ Throughout this Act, "municipal people s council" and "people s council" is replaced with "municipal council" 11. In Article 2, para (3) of the State Fees Act (Promulgated, Izv., No. 104/ 1951, amended, No. 89/1059, No. 21/1960, SG, No. 53/1973, No. 87/1974, No. 21/1975, No. 21/1990, No. 55/1991, No. 100/1992, No. 69/1995, No. 87/1995), after the words "tax value", the words "for levying tax on inheritances" are added. 12. In Article 55, para (1) (b) of the Code of Civil Procedure (promulgated, Izv., No. 12/1952, amended, No. 92/1952, No. 89/1953, No. 90/1955, No. 90/1956, No. 90/1958, Nos. 50, 90 & 99/1961, SG, No. 1/1963, No. 23/1968, No. 27/1973, No. 89/1976, No. 36/1979, No. 28/1983, No. 41/1985, No. 27/1986, No. 55/1987, No. 60/1988, Nos. 31 & 38/ 1989, No. 31/1990, No. 62/1991, No. 55/1992, Nos. 61 & 93/1993, No. 87/1995, Nos. 12 & 26/1996), after the words "tax value", the words "for levying tax on inheritances" are added. 13. (As amended - SG, No. 40/1996) (1) Individuals pay the real property tax and the waste disposal fee for 1996 in four equal installments within the following terms: up to 31 May, up to 30 June, up to 30 September, and up to 30 November. (2) Individuals who have prepaid, prior to 31 May, the real property tax and the waste disposal fee for the whole of 1996, are entitled to a 5 percent reduction in the amount payable. 14. Norm rates under Annex 1 come into force as of 1 January, NORMS FOR TAX APPRAISAL OF REAL PROPERTIES FOR THE PURPOSES OF LEVYING REAL PROPERTY TAX AND ASSESSMENT OF WASTE DISPOSAL FEE I. Tax Appraisal of Buildings Article 1 Annex 1

23 The base value of one cubic meter of building for urban settlements with a population exceeding 20000, by type of structure: 1. for a shed with or without surrounding walls, Leva 2. for frame-structure buildings, Leva 3. for semi-solid buildings with clay solution, Leva 4. for semi-solid buildings with lime solution, Leva 5. for solid buildings without reinforced concrete elements, or from pre-fabricated ethernite and other panels (bungalow type), Leva 6. for solid buildings with partial use of reinforced concrete elements, Leva 7. for solid buildings with reinforced concrete structures, Leva 8. for solid buildings with reinforced concrete frames, Leva Article 2 The base value of one cubic meter of building for urban settlements with a population up to 20000, by type of structure: 1. for a shed with or without surrounding walls, Leva 2. for frame-structure buildings, Leva 3. for semi-solid buildings with clay solution, Leva 4. for semi-solid buildings with lime solution, Leva 5. for solid buildings without reinforced concrete elements, or from pre-fabricated ethernite and other panels (bungalow type), Leva 6. for solid buildings with partial use of reinforced concrete elements, Leva 7. for solid buildings with reinforced concrete structures, Leva 8. for solid buildings with reinforced concrete frames, Leva Article 3 The volume of the building is calculated by multiplying the built-up area by the height of the building measured from the floor of the basement, and in the absence of the latter, from the average elevation of the terrain, to the upper part of the main perch, the eaves, respectively, plus the volume of the attic space.

24 Article 4 (1) The tax value of buildings is reduced by the average annual wear and tear, according to the type of structure: 1. for frame-structure buildings, by 1.0 %; 2. for semi-solid buildings, by 0.8 %; 3. for solid buildings without reinforced concrete elements, by 0.7 %; 4. for solid buildings with partial use of reinforced concrete elements, by 0.6 %; 5. for solid buildings with reinforced concrete structures, by 0.5 %. (2) Wear and tear depreciation cannot exceed 50 % of the value of the building appraised under subpara 3, 4, and 5. Article 5 (1) The tax value is increased, depending on the location of buildings, in accordance with the functional type of the urban settlement, as follows: 1. from functional type zero(sofia), 5.0 times; 2. from functional type one, 4.5 times; 3. from functional type two, 3.25 times; 4. from functional type three, 2.5 times; 5. from functional type four and five, 2.0 times; 6. from functional type six, seven and eight, 1.5 times. (2) The functional type of the settlement is established through the Unified Classifier of Urban Places in the Republic of Bulgaria. Article 6 (1) The tax value of buildings or parts thereof which are not used for housing purposes is increased 5 times. (2) The above paragraph does not apply to the following buildings and parts thereof used for personal needs and in accordance with their purposes: a) agricultural and other auxiliary buildings and structures (stables, barns, haylofts, etc.) on tracts zoned for housing development;

25 b) garages; c) villa buildings; d) studios for creative, scientific or artistic activity. II. Tax Appraisal of Parcels, Yard Lots and Built-up Lots Article 7 The tax value of one square meter, depending on the urban settlement and development zone, is: 1. For Sofia: a) first development zone, Leva b) second development zone, Leva c) third development zone, Leva d) fourth development zone, Leva e) fifth development zone, Leva f) outside construction boundaries, Leva. 2. For Bourgas, Varna, Gabrovo, Pleven, Plovdiv, Rousse and Stara Zagora: a) first development zone, Leva b) second development zone, Leva c) third development zone, Leva d) for the rest of the development zones and outside construction boundaries, Leva. 3. For Assenovgrad, Blagoevgrad, Veliko Turnovo, Vidin, Vratsa, Gorna Oriahovitsa, Dimitrovgrad, Dobrich, Doupnitsa, Kazanluk, Kyustendil, Lovech, Lom, Pazardzhik, Pernik, Silistra, Sliven, Haskovo, Shoumen and Yambol: a) first development zone, Leva b) second development zone, Leva c) third development zone, Leva