Данък върху разходите в случаи с международен елемент
Tax on expenses in cases with an international element

Summary/Abstract: Taxation of expenses is not a common model for collecting budget revenues, as the objects of taxation are usually income or property. However, this specific tax allows state and local authorities to collect tax from companies even if they report losses rather than profits. This article examines the effects of direct proportional taxation of expenses, which was introduced in the Republic of Bulgaria about 30 years ago but has not been amended in line with recent changes in international and European law. The main question in the paper is whether such changes are necessary and, if so, what they should be. Through a comparative legal analysis, the national framework is discussed in relation to the Global Anti-base Erosion Rules (Pillar Two) of the Organization for Economic Co-operation and Development and the conventions for the avoidance of double taxation concluded by the Republic of Bulgaria. Although the article makes proposals for improving the legal framework, overall the study shows that the expenditure tax can effectively interact with different sets of rules.

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