Legislation and incentives
Philanthropy in Bulgaria is encouraged by the state through tax alleviations. The legislature provides relief both to physical and to legal persons - donors. Levels of tax relief for businesses, donors, however, are divided into three groups, according to the recipients of the donations. The law on corporate income tax provides for 10% tax deduction for donations to benefit the non-profit organizations, registered in public benefit, welfare, hospitals, schools, etc. 15% is a tax benefit for donations made to the cultural institutions and supporting the Bulgarian culture, according to the law of patronage, if the donor has registered in advance at the Ministry of culture as a patron. The last group are tax deductions are at a rate of 50%, if the donations are made in favour of 3 Governmental Funds - "Center for treatment of children", Fund for reproductive health and Fund "Transplants". The values are calculated as the percent of profit before taxation.
Individuals /physical entities/ receive a 5% tax deduction, if they have made donation in favour of legal entities, registered in public benefit, welfare organizations, hospitals, schools, etc.
Donations, however, are subject to VAT, including SMS messages sent in support of philanthropic fundraising campaigns which are taxed with 20% VAT