In the end of 2014 Bulgarian Parliament passed the amendments for 2015 to the tax and social security laws. The main amendments are as follows:
- Personal Income Tax – extending the scope of the tax rate on the interest on bank accounts – levy 8% tax on interests on all types of bank accounts, not only deposit ones.
- Corporate Income Tax – income from interest and royalty payments made from local to EU entities when the payer and the recipient of the income are related parties will be exempted from withholding tax. Hitherto the withholding tax rate was 5% and this amendment fully implements Directive 2003/49/EC on the common system of taxation applicable to interest and royalty payments into the Bulgarian legislation.
- VAT – new rules for suppliers of telecommunication, broadcasting and electronic services rendered to EU non-taxable persons were introduced from 1 January 2015 – these services will be subject to VAT in the country where the customer is established, not as far in the country where the supplier is established.
- Excise duties – the excise duty rates on cigarettes will be increased gradually during the period 2016-2018 in order to reach the minimum required level as per the EU legislation of EUR 90 per 1,000 cigarettes. In addition, the order for appeal of the decisions of the customs authorities for determination of excise duties was changed – from 1 January 2015 these decisions will be appealed under the procedure of the Tax and Social Security Procedure Code, not as far under the procedure of the Administrative Procedure Code.
- Local taxes and fees – taxpayers will be able to file and submit electronically all kinds of tax returns under the Local Taxes and Fees Act. Furthermore an exemption from the obligation for submission of a tax return has been introduced in cases of free of charge acquisition of property which itself is exempt from taxation (by virtue of the law; between direct relatives or spouses, etc.).
- Tax and Social Security Procedure Code – a new possibility has been introduced for taxpayers allowing them to file and submit tax and social security returns online by using a personal identification code (PIC), instead of the current possibility – only with qualified electronic signature.
- Social security – the amendments in this field are mainly in the following areas:
- The minimum and maximum thresholds are increased – respectively from BGN 340 to BGN 360 and from BGN 2,400 to BGN 2,600.
- The percentage of the contributions to various social security funds remains unchanged.
- The age threshold for retirement also remains unchanged – 60 years and 8 months for women and 63 years and 8 months for men. However, the required work experience necessary for retirement has been increased with four months, i.e. 35 years for the women and 38 years for the men.
- Another change is related to the calculation of the maternity compensation which will now be done based on the insurance income for 24 months backwards, not as far on the insurance income for 18 months backwards.