1
Bulgaria
Bulgaria
Structure and development of tax revenues
Table BG.1: Revenue (% of GDP)
I. Indirect taxes
VAT
II. Direct taxes
Personal income
Corporate income
III. Social Contributions ( compulsory actual contributions)
Employers’
Households’
IV. Less: amounts assessed but unlikely to be collected
V. Total (I + II + III – IV)
VI. Social contributions (imputed + voluntary
contributions)
VII. Total (incl. Imputed + voluntary contributions (V+VI)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
15.9 16.4
17.0 16.4
17.3 14.9 14.8 14.2 15.2 15.2
9.6 10.1 10.6 10.0 10.6
8.7
9.0
8.4
9.4
9.2
5.8
4.9
5.1
7.9
6.5
5.7
5.2
4.9
5.0
5.3
3.0
2.7
2.5
3.1
2.8
2.9
2.9
2.8
2.9
2.9
2.4
1.6
1.8
4.0
2.8
2.3
1.8
1.7
1.7
1.9
10.0
9.5
8.2
7.9
7.6
7.5
6.9
6.9
7.0
7.6
7.6
6.8
5.6
5.4
4.7
4.5
4.4
4.4
4.1
4.6
2.4
2.7
2.6
2.5
2.9
3.0
2.5
2.5
2.9
3.0
:
:
:
:
:
:
:
:
:
:
31.7 30.8 30.3 32.2 31.4 28.1 27.0 26.1 27.2 28.1
0.0
0.1
0.0
–0.1
0.0
0.0
0.0
0.0
0.0
–0.1
31.7
30.8
30.3
32.2
31.4
28.1
27.0
26.1
27.2
28.1
Source: Eurostat (online data code: gov_10a_taxag)
Norway
Iceland
Lithuania
Romania
Latvia
Bulgaria
Ireland
Cyprus
Slovakia
Poland
Estonia
Spain
Malta
United Kingdom
Portugal
Greece
Czech Republic
Croatia
Slovenia
Netherlands
Germany
EU-28
Hungary
EA-19
Luxembourg
Austria
Italy
Sweden
Finland
France
Belgium
50
45
40
35
30
25
20
15
10
5
0
Denmark
Figure BG.1: Total receipts from taxes and compulsory social contributions, 2013 (% of GDP)
Source: Eurostat (online data code: gov_10a_taxag)
Figure BG.2: Tax revenues by main taxes, compared to EU-28, 2013 (% of GDP)
Value added type
taxes (VAT)
12
Social
contributions
Compulsory
households actual
social contributions
Indirect taxes
9
6
Other (mainly
indirect) taxes
3
0
Compulsory
employers actual
social contributions
Direct taxes
Source: Eurostat (online data code: gov_10a_taxag)
18
Taxes on individual or
household income
incl. holding gains
Taxes on the income
or profits of
corporations
EU-28
BG
Taxation trends in the European Union
Bulgaria
1
Latest tax reforms
Table BG.2: Latest tax reforms
Description of measure
Personal income tax
Tax deductions for up to three children. The annual taxable
income of one of the parents is reduced by BGN 200 for one child,
by BGN 400 for two children and by BGN 600 for three or more
children; by BGN 2 000 per child for children with disability.
Repeal of the tax relief for minimum wages.
Repeal of the tax exemption for income from interest from bank
accounts which willl be taxed at the rate of 8 %. Previously only
income from interest from term deposits was subject to taxation.
Corporate income tax
Exemption from withholding tax on the interest and royalty
payments made from a Bulgarian economic operator to
associated companies of another Member State.
Energy excises
Repeal of the exemption from excise duty on electricity used by
railroad transport.
Reduced excise duty rate for gas oil used in primary agricultural
production.
Tobacco excises
Increase of the excise duty on cigarettes from 2016.
Other types of tax
Repeal of the fee (in reality a tax) on the production of electricity
from wind and solar energy.
Employers’ social contributions
Increase of the minimum thresholds for the social security
contributions on average by 4.4 % compared to 2014. The
maximum monthly amount of the insurance income is increased
from BGN 2 400 to BGN 2 600.
Administrative, compliance related measures
Allowing the use of the ‘personal identification code’, in addition
to the existing paid e-signature, for accessing e-services provided
by the tax administration.
Clarifying national rules related to excise duties, aligning the
national legislation with EU law (including Court jurisprudence)
for excise duties and VAT.
Change
Date
Base decrease
In force from: 1.1.2015
Base increase
In force from: 1.1.2015
Base increase
In force from: 1.1.2015
Base decrease
In force from: 1.1.2015
Base increase
In force from: 1.1.2015
Rate decrease
In force from: 1.1.2014
Rate increase
In force from: 1.1.2015
Rate decrease
Legislation: 31.7.2014
Base increase
In force from: 1.1.2015
N/A
In force from: 1.1.2015
N/A
In force from: 1.1.2015
Source: DG Taxation and Customs Union. Further information on national tax reforms, including announcements of forthcoming measures, can be found in the tax
reforms database.
Taxation trends in the European Union
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1
Bulgaria
Main features of the tax system
Table BG.3: Individual taxation (PIT)
General
Base and jurisdiction
resident: worldwide income (subject to double-tax relief)
non-resident: domestic income
Taxation of couples and families
separate taxation
System and Applicable rates
Global / Labour income scheme
global income, also incl. awards & gifts
Basic allowance
–; LEI 200 per child (max. LEI 600)
Rate schedule
flat rate
10 %
Surtaxes
–
Regional and local surcharges
–
Top statutory PIT rate (including surcharges)
10 %
Owner-occupied dwelling
not included
Capital income
Income from renting movable property
included in global income
Income from renting immovable property
included in global income
Capital gains (immovable property)
included in global income
Capital gains (movable property)
included in global income (except if sold on EEA stock exchange)
Dividends
5 % final withholding tax
Interests on deposits and special savings accounts
8 % final withholding tax
Interests on corporate and government bonds
exempted
Other specific features and alternative regimes
Pension and other social security payments
exempted
Personal business income
‘sole traders’ (merchant activities): 15 % final withholding tax
Small business, not VAT registered
lump sum
Other tax provisions
Main tax credits & deductions
Professional expenses
no
Pension savings
yes, also to life insurance funds
Mortgage
yes (interest), in certain conditions (‘young maried couples’)
Others (not exhaustive)
BGN 7 920 per year (BGN 660 per month) deduction from taxable
income for persons with 50 % or more reduced capacity for work
Treatment of losses (business/self-employed income)
yes (deduction), in certain conditions (income from sale
or exchange of stocks, shares, compensatory instruments,
investment bonds, etc.)
Source: DG Taxation and Customs Union, on the basis of information provided by the national Ministries of Finance. For more detail, the TEDB database contains an
extensive inventory of the main taxes in force in the EU Member States, including their legal basis, assessment base, main exemptions, applicable rate(s), economic
and statistical classification.
20
Taxation trends in the European Union
Bulgaria
1
Table BG.4: VAT
Tax rates
Standard
Reduced rate(s)
20 %
9%
Table BG.5: Corporate taxation (CIT)
Tax rates
Nominal corporate income tax rate
Central government surcharge
Regional government surcharge
Local government surcharge
Top CIT statutory rate (incl. surcharges)
Special tax rate for SMEs (all-in rate)
Tax base
Anti-avoidance
Limits to interest deductions
Transfer pricing rules
Controlled foreign company (CFC)
Controlled foreign company (CFC) for passive income only
Allowance for Corporate Equity
10 %
10 %
no
worldwide income
yes (thin cap rule of 3:1 debt to equity)
yes, arm's length principle
no
no
no
Table BG.6: Social contributions
Base
Employers’ contributions
Total rate
of which:
Capped contributions
Employees’ contributions
Total rate
of which:
Capped contributions
employment income, income from business or self-employed
activities
18.10 %
pensions 9.9 %, healthcare 4.8 %, unemployment 0.6 %,
occupational disease/work accident 0.7 %, Illness/maternity leave
2.1 %
cap for all social security contributions (BGN 2 600 per month)
12.90 %
pensions 7.9 %, healthcare 3.2 %, unemployment 0.4 %, illness/
maternity leave 1.4 %
cap for all social security contributions (BGN 2 600 per month)
Table BG.7: Wealth and transaction taxes
Inheritance and gift tax
Real estate taxation
Recurrent real estate tax
Regional differentiation
Tax discount for primary dwelling
Real estate transfer tax
Net wealth tax
yes
yes
tax rate is set by each municipality within a range set by law
yes, 50 % reduction
yes
no
Source: DG Taxation and Customs Union, on the basis of information provided by the national Ministries of Finance. For more detail, the TEDB database contains an
extensive inventory of the main taxes in force in the EU Member States, including their legal basis, assessment base, main exemptions, applicable rate(s), economic
and statistical classification.
Taxation trends in the European Union
21