REGISTRATION AND ACTIVITIES
The right of association is stipulated in Article 44 of the Constitution of the Republic of Bulgaria and is further regulated in the Non-Profit Legal Entities Act.
Non-profit legal entities can take two legal organizational forms - associations and foundations. All non-profit legal entities in Bulgaria are subject to registration in the centralized Non-Profit Legal Entities Registry kept by the Registry Agency of the Republic of Bulgaria.
Non-profit legal entities (NGOs) can freely determine their objectives and means of action, i.e., the specific activities through which they can attain their goals. The Constitution of the Republic of Bulgaria sets some limitations to the objectives of the NGOs. It stipulates that their activity shall not be contrary to the country's sovereignty and national integrity, or the unity of the nation, nor shall it incite racial, national, ethnic, or religious enmity or an encroachment on the rights and freedoms of citizens. Forbidden is also the establishment of clandestine or paramilitary structures or those which seek to attain their aims through violence.
All other objectives deriving from various spheres of public interest are in principle allowed even if they are not in accordance with the predominant public opinions and understanding, as long as these objectives are attained by legal activities.
The Non-Profit Legal Entities Act (NGOA) explicitly states that founders of a non-profit legal entity may be Bulgarian and foreign natural persons and legal entities regardless of whether the organization is an association or a foundation. Natural persons should be able-bodied who have come of age and are not under any legal guardianship. Legal entities should be established under the current legislation of the country in which they are registered.
Non-profit legal entities and those in the public benefit in particular enjoy tax benefits. They do not pay taxes on the income from non-profit activities. The latter includes donations, membership fees, project grants.
NGOs which develop business activity are taxed as business companies – with 10% corporate tax on their profit.
Donors to non-profit legal entities working in public benefit enjoy tax preferences. If they are natural persons, they can have up to 5% tax deduction of their annual income. If they are legal entities, they enjoy up to 10% tax deduction on their profit before taxation.
BOOK-KEEPING AND ACCOUNTABILITY
NGOs keep their own books. It is important to note that in the books non-profit and business activities are accounted separately. From the 1st of March until 30th of June each year all non-profit legal entities should submit a financial report or a declaration if didn’t have activities during the past year or had an income of less than 500 BGN to the National Statistical Institute. Does NGO which have business activities or other activities subject to taxation need to submit an income tax form to the National Revenue Agency from 1st of March until 30th of June each year. By September 30, all NGOs are obliged to submit their financial reports to the Non-Profit Legal Entities Registry and the NGOs in public benefit have to submit additionally an annual narrative report as well. NGOs are also obliged to provide monthly information to the National Social Security Institute (NSSI) about the remunerations they have offered and the due social benefits. All labour contracts are registered at the NSSI up to 3 days after the contract has been concluded. More information about the legal framework for NGOs, the laws related to the activity of those organizations, as well as current information about changes in legislation can be found on the webpage of the Bulgarian Center for Not-for-Profit Law.