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Abstract
At the end of last year the Bulgarian Corporate Income Tax Act was enriched by several amendments one of which refers directly to hidden profit distribution. The change itself is in the definition for hidden distribution of profit. The new interpretation includes amounts not connected to the business activities or such that surpass the usual market levels not only for expenses accrued, but also for amounts paid or distributed, regardless the form, to shareholders, partners or persons related to them. Until now the hidden profit distribution was an issue related only to the accrued expenses. From this year this goes for all amounts accrued, paid or distributed in any form by the legal entity. There are still grey areas that are yet to be clarified. If the granting of a free of interest credit or an unlimited credit to the owner of the capital or if a granted prepayment that is not reported for some years, could these be treated as a hidden profit distribution after the amendments as of January 1 2010.