What are the conditions for transferring corporate tax to farmers and what investments are eligible?

Farmers can benefit from a waiver of up to 60% of the corporate tax on their tax profits from the activity of producing unprocessed plant and animal products. In order to benefit from this relief, they must meet certain conditions specified in the Corporate Income Tax Act (Corporate Income Tax Act). According to Article 189b, paragraph 2 of the CPA, the transferred tax must be invested in new buildings and new agricultural equipment necessary for carrying out the agricultural activity, and these assets must be acquired within the year following the year of use of the transfer. The investments must have been acquired under market conditions and the production activity must continue for at least three years after the year of divestment. Furthermore, the deferred tax must not exceed 65% of the present value of the assets and the present value of all assets may not exceed a threshold of the BGN equivalent of EUR 600,000.

Can farmers benefit from tax incentives for innovation and technological improvements on their farm?

Yes, farmers can benefit from tax incentives for innovation and technological improvements, which is part of the legislation's efforts to stimulate modernisation and efficiency gains in the agricultural sector. According to Art. 22h of the Personal Income Taxes Act (ZDDFL), individuals registered as farmers who receive subsidies or support from the European Agricultural Guarantee Fund and the European Rural Development Fund may reduce their annual tax base by the amount of the subsidy received to 100 BGN 000. These subsidies can be used for innovations and improvements in agricultural production, such as introducing new agricultural technologies, improving infrastructure and purchasing new equipment, which will contribute to increasing the productivity and sustainability of farms.

What is the minimum and maximum social security income for farmers in 2024?

The minimum insurance income for farmers in 2024 is BGN 933, and the maximum insurance income is BGN 3750. These values are determined in accordance with the amendments to the State Budget Act and the Social Security Code (CSR). The minimum social security income represents the minimum amount on which farmers must make insurance contributions, while the maximum social security income is the upper limit of the income on which insurance calculations can be made. These parameters are important for proper planning and management of farmers' insurance obligations.

Accounting services for farmers in Bulgaria.

The accounting and consulting firm offers quality accounting services, adapted especially for farmers, serving clients in Sofia, Burgas, Pomorie, Karnobat, Sunny Beach, Aytos, Nessebar, Sozopol, Primorsko and the whole of Bulgaria.

We often receive questions from our customers such as: “How is the accounting of a farmer individual?” and “What documents for sale should a farmer issue?”. These questions reflect the need to understand the basic principles and requirements for reporting and documentation in the sector.

Another important aspect that is often discussed is: “How is a book kept for the accounting of a farmer?”. Keeping proper and accurate documentation is key to successful farm management. In this regard, the accountability and interruption of the activity of a farmer are also among the main topics of interest to our customers.

Insurance is another frequently discussed topic. Many customers are interested in “What are the benefits of a farmer who also works under an employment contract?” and “How is the social security income of a farmer calculated in 2024?”. These issues are particularly important, as proper insurance guarantees financial stability and legal protection for producers.

The difference between farmer and farmer is also a frequently discussed issue that brings clarity and legal certainty to the different types of farming activities. Non-registered farmers also turn to us with questions such as: “What are the requirements for registration as a farmer?” and “How many acres are needed for registration?”.

About insurance in 2024, our customers often ask: “What is the insurance for retired farmers?” and “How are farmers' benefits calculated?”. It is important to highlight that social security income and seniority as a farmer have significant consequences on future pension and social security benefits.

These questions and many more are part of the daily work of Elan Consulting. We are here to provide the best accounting and consulting services for farmers, taking care of all aspects of their business — from registration and assurance to keeping records and documenting the activity. Whether you are a small farmer or a large farmer, we are at your disposal to help you navigate the complex world of agricultural accounting and achieve success in your activity.

We provide a full range of accounting services for farmers in Burgas, Sofia and the whole of Bulgaria, including assistance with requirements for farmers, preparation of annual activity report, as well as calculation of insurance. Our experience in accounting for farmers as individuals, including those who keep one-sided accounting, allows us to offer specialized solutions that meet the unique needs of each farm.

We understand the complexity of accounting in this sector and offer our expertise in farmer accounting, bookkeeping, as well as preparing and filing the necessary paperwork for farmer re-registration in 2024. In addition, our consultations also cover important topics such as the status of unregistered farmers and preparation of GFOs (annual financial statements) for farmers for 2024.

Our team of experts is here to support you every step of the way, ensuring compliance with existing regulatory requirements and helping you navigate successfully through the financial aspects of your business. With Elan Consulting, you have a reliable partner who understands the specifics of the agricultural business in Bulgaria and is committed to providing customized accounting solutions to meet your unique needs and support your long-term development.

How is the accounting of a farmer - an individual in Bulgaria?

Keeping accounting for an individual farmer in Bulgaria requires compliance with specific legal provisions and regulations that guarantee accuracy and compliance with legislation. It is important to note that farmers, whether registered or not, are required to keep accounts under the Accounting Act (HPA) and other relevant regulatory enactments.

Farmers must keep a journal of income and expenses, where all financial operations related to their activities are reflected. According to Art. 6, para. 1 of the ZH, they are obliged to draw up and keep accounting records and financial statements that faithfully and honestly reflect the financial situation and results of their activities. This includes regular accounting of all income from sales of agricultural products and services, as well as the costs of materials, labor and other related costs of the activity.

Securing farmers is another important aspect. According to Article 4, paragraph 3, item 2 of the Social Security Code (CSD), farmers are obliged to insure themselves for disability due to general illness, old age and death, as well as for general illness and maternity, unless they have chosen to insure themselves only for disability due to general illness, old age and death. Insurance contributions are calculated on the minimum insurance income determined by law, which for 2024 is specified in Article 6, paragraph 2 of the CSR.

In case of interruption of the activity of a farmer, it is necessary to submit a declaration under Art. 50 of the Personal Income Taxes Act (ZDDFL) to the National Revenue Agency (NRA). Also, upon resumption of activity, the manufacturer is obliged to notify the NRA and recover his insurance contributions, in accordance with Article 4, paragraph 3, item 2 of the CSO.

Sales documents are an essential part of a farmer's accounting. Sales of agricultural produce in many cases must be documented with invoices and receipts, complying with the requirements of the Value Added Tax Act (VAT). According to Art. 114, para. 1 of the ZVAT, the invoice must contain data about the seller and the buyer, the date of issue, an inventory of goods and services, the quantity and price.

Farmers who are not VAT registered are also required to issue documents for their sales. According to Article 112, paragraph 1 of the ZVAT, they must issue invoices or other documents containing the necessary information about the transactions carried out.

The insurance income of farmers is determined differently depending on whether they also work under an employment contract. According to Article 6, paragraph 1, item 2 of the CSR, they are obliged to insure themselves on the minimum social security income established for their activities, and in the presence of an employment contract, insurance contributions are calculated on the total income from both activities.

For retirees who continue to work as farmers, it is important to know that they are also subject to insurance. Art. 4, para. 3, item 2 of the KSO provides that pensioners who are engaged in agricultural activities must insure themselves for disability due to general illness, old age and death.

In order to register as a farmer, a person must meet certain requirements. According to the Regulation on the Registration of Farmers, they must own agricultural land or have a lease agreement on such land. The minimum size of agricultural land required for registration is specified in Art. 7, para. 1 of the Ordinance.

Farmers are also obliged to keep records of the products produced and the services rendered. Art. 8, para. 1 of the ZH stipulates that they must keep a book of income and expenses, which contains information about all financial transactions related to their activities.

In conclusion, keeping accounting for farmers individuals requires strict compliance with legal requirements and regulations. Each financial and accounting operation must be properly documented and reflected, following the instructions of the ZH, ZDDS, CSR and other relevant regulatory acts. This ensures transparency, accuracy and compliance with legislation, which is essential for the successful management of agricultural activity.

What documents for sale should a farmer issue?

The documents that a farmer must issue when selling his produce are mainly determined by several laws, including the Personal Income Tax Act (ZDDFL), the Value Added Tax Act (VAT), the Accounting Act (HSC), as well as other regulatory enactments. In order to be comprehensive and detailed, the basic documents necessary for the correct documentation of sales, as well as the relevant legal provisions, should be considered.

The farmer who makes sales is obliged to issue invoices for each sale, regardless of whether the counterparty is a natural or legal person. However, the law says that the issuance of an invoice for an individual is mandatory only if he has requested one. Invoices must comply with the requirements of Art. 114 of the ZVAT and contain:

The name and VAT identification number of the supplier and the consignee;
Description of goods and services;
The quantity of goods;
Unit price excluding tax, tax value and total amount including tax.

According to Art. 113 of the VAT Act, the farmer is obliged to issue an invoice no later than the fifteenth day of the month following the month in which the tax event occurred. This requirement is extremely important for the correct documentation of sales and reporting to the NRA.

When selling goods to individuals who are not tax registered, the manufacturer is obliged to issue cash receipts in accordance with Art. 118 of the ZVAT and Ordinance No. H-18 of the Ministry of Finance. Cash receipts are issued through a fiscal device and must reflect each retail sale made.

For sales carried out on commodity exchanges, commodity markets and manufacturers' markets, it is necessary to comply with the requirements of the Commodity Exchanges and Marketplaces Act (ZSBT). According to Art. 55 of the ZSBT, the transactions in the marketplaces and markets are carried out by traders registered under the terms and procedure of the Commercial Law or the Law on Cooperatives, or by individuals registered under the Law on Support of Farmers. In these transactions, it is mandatory to issue an invoice.

According to Art. 57 of the ZSBT, the seller at a commodity market and in the producer market is obliged to provide buyers with:

Description of the goods and documents on its quality characteristics;
the legally required documents accompanying the goods concerning their safety or a declaration by the manufacturer;
Documents on the origin and ownership of the goods;
Information about the selling price.

In addition, the farmer must keep regular accounting, according to the requirements of the Accounting Act (HPA). He is obliged to prepare annual financial statements, which include a balance sheet, a statement of income and expenses, and other financial documents, in accordance with Art. 29 of the Law of the Law.

According to Art. 9, para. 2 of the Personal Income Taxes Act (ZDDFL), income from the sale of agricultural produce is taxable. Farmers are required to file annual tax returnsuntil April 30 of the following yearin which to declare all income from sales, including income from agricultural production. If the farmer is registered as a legal entity, the deadline is June 30!

For farmers who hire workers, it is necessary to comply with the requirements of the Labor Code (TC) and the Social Security Act (SSO). They must issue employment contracts, wage slips and insure their workers according to the current insurance rates.

Farmers who sell their products on international markets must comply with the requirements of customs legislation and issue the necessary documents for export, including customs declarations and certificates of origin.

How is a book on the accounting of a farmer kept?

Keeping an accounting book for a farmer includes several key aspects that ensure correct and transparent accounting of financial operations and compliance with tax requirements. Initially, the farmer must determine the type of accounting system that he will use - simplified or double accounting. This decision depends on the size of the farm and the specific needs of the business.

Once the appropriate accounting system has been selected, one should start with the opening of an accounting book, which includes basic records such as a journal of income and expenses, a journal of depreciation of assets and other accompanying documents. It is important that each financial document is correctly classified and recorded in the appropriate register in order to avoid future problems when checking by the tax authorities.

One of the main tasks is keeping a journal of income and expenses. In this journal, all income from sales of agricultural products, as well as all expenses related to the production and management of the farm, are recorded. This includes costs for seeds, fertilizers, pesticides, fuels, worker salaries, and other operating expenses. It is important that these records are accurate and up to date.

Another important part of the accounting book is the asset depreciation journal. Farmers often use various machines and equipment that are subject to depreciation. In this journal, the value of assets, the date of acquisition and the depreciation rate are recorded. This helps to accurately calculate the value of assets over time and their residual life.

In addition, farmers must keep a log of stored goods and materials. This includes recording the quantity and value of goods available in the warehouse, as well as all movements of goods - receipts and expenses. This ensures precise control over stocks and prevents losses.

The annual financial statements are also an integral part of the farmer's accounting book. These include a balance sheet, a statement of income and expenses, as well as other accompanying financial documents. These reports provide an overview of the financial situation of the holding and are important for analyzing and planning future actions.

The ledger should also include all invoices, receipts and bank statements related to the farmer's activities. Each financial document must be kept for a certain period, according to legal requirements, in order to be available for possible verification.