(i) General Introduction to the Country Chapter
Bulgaria is not an OECD Member Country. Nevertheless, it may be considered relevant for sportsmen and sportswomen, and particularly with regard to football and basketball players. Bulgaria has very recently joined the European Union on 1 January 2007 and this fact is expected to foster the current trend for Bulgarian football clubs to lure football players from different EU Member States to play in the local football championship. Generally, the accession is likely to affect favorably the overall influx of sportsmen in Bulgaria.
So far, many players having nationality of an EU Member State have played and/or are still playing for Bulgarian first league football clubs. One of the most noteworthy example is the French and former Inter Milan player Benoa Koe who played one season for CSKA Sofia. His compatriot Jan-Philip Caillet has played for Litex Lovetch and another Frenchman Sedric Bardon is still playing for Levski, Sofia. Currently, the Dutchman Thijs Sluijter is playing for Litex Lovetch. All those examples concern players, who chose Bulgarian top clubs instead of the real existing alternative staying before them for playing in their home countries’ first league clubs of average and low class or in any lower division club.
In addition, numerous not so impressive players from the U.K., Germany, Italy and Czech Republic, very good players from some of the new Member States which acceded the EU in 2004 such as Slovenia, Slovakia, and Hungary as well as players from all over the world – Serbia, Croatia, Bosna and Herzegovina, Romania, Brazil, Argentina, Columbia, Venezuela and many African countries have chosen from time to time, including the time of writing this country chapter, the Bulgarian football championship as a desired forum for pursuing their football careers. Further, some basketball players from USA are present in the Bulgarian professional basketball leagues (men’s and women’s).
Therefore, the issue of tax treatment of sportsmen and sportswomen in Bulgaria might be of major significance for many athletes, for whom Bulgaria could turn out to be quite attractive and profitable option for the development of their sport careers and this country chapter is intended to provide them guidelines for their potential income’s taxation in Bulgaria.
Taxation of sportsmen and sportswomen in Bulgaria might be further relevant for potential foreign investors in Bulgarian sport. Athletes are the most precious assets of every sport club and for this reason investors have to know clearly what regime covers the player’s activities and they have to be able to predict the costs associated therewith as well as understand how these costs are reflected in the financial statements of the clubs.
On 4 December 2006 one of the most popular Bulgarian football clubs CSKA Sofia was acquired by the multinational company Global Steel Corporation having 3 plants in Europe and around USD 200 mln. direct investments in the Bulgarian metal and steel industry. This has been the first investment of a truly global company in Bulgarian sport and similar investments may be reasonably expected in the near future.
A potential investment in Bulgarian sport should not be perceived as a profit-driven undertaking especially considering the quite minor, if any, return from such an investment. However, investment in sport may be quite beneficial for businesses which are already established in Bulgaria but further need social recognition and social legitimacy in order for their owners to run those businesses in a friendly and fruitful environment. Attachment to a sport club is a paramount hallmark of large social groups. Sport as a whole is socially and culturally very sensitive area. Therefore, the proper exploitation of the image of sport could make for the better acceptance of foreign investors by the general public in Bulgaria. Moreover, the brand of any business would receive quite a value in result of its association with already well known and prestigious brand of a sport club. This would further save time, which otherwise would be necessary for the promotion of a totally new and unfamiliar brand.
The ambition of this country chapter is also to serve as a guideline for those foreign investors who might consider sport as an appropriate instrument for promotion of their business interests in Bulgaria regardless whether concerning sport, in particular, or other fields and industries.
For more details, please refer to the Original Issue