Individual - Taxes on personal income. The carryback of losses is not permitted. They are calculated on the gross income of each worker or employee. The percentage is distributed as follows: Mandatory state pension fund: 8.22% Additional mandatory pension insurance: 2.8% general illness and maternity fund: 2.1% Social Security in Bulgaria, All You Need To Know by Daniel Montiglio The state social insurance is carried out on the basis of the principles of obligation, solidarity, and equality of the insured persons. The maximum basis cap is maintained at BGN 3,000 up to 31 March 2022 and is increased to BGN 3,400 with effect from 1 April 2022 to 31 December 2022. Please refer to your advisors for specific advice. A 5% dividend withholding tax, plus a penalty of 20%, apply to hidden profit distribution amounts. The percentage is distributed as follows: The amount of the health insurance contribution is determined as a percentage of the income on which the contributions are due. The 2022 tax rate of VAT in Bulgaria remains 20% for all taxable supplies, unless explicitly indicated as zero-rated. ): 17,3 % of the gross salary; Pension insurance: 5 % of the gross salary; Health insurance: 8 % of the gross salary. The term " American employer " means a person who is . Here is a brief overview of 2022 tax rates and social security contributions in Bulgaria: The corporate tax rate remains at 10% in 2022. Immedis insights into global payroll technology trends, taxation, and inside Immediss culture. Bulgarian transfer pricing rules generally follow the OECD guidelines. The employer must recalculate the annual tax by January 31st of the following year. Illness). Insurance in a universal pension fund entitles you to receive a supplementary lifelong old-age pension, separate from the social security pension. Social securityis a system that guarantees financial protection against major life risks, work-related accidents and their consequences such as disease, unemployment, old-age and needs for nursing care to the employees. 1 of the Labor Code) up to 60 working days, used in 2021, will be considered as work experience. Law Firm Kancheff, Gicheva, Marnikas and Partners provides highly qualified legal services, legal and consultancy assistance on a wide range of cases. Experts from the National Social Security Institute and the Moldovan Office for Social Insurance discussed the digital future of the systems. Interest penalties apply for the late payment of tax, and administrative penalties apply in various circumstances. As of 1 January 2021, the contributory income's minimum monthly amount for self-insured persons is 650 BGN. In the case of transactions involving nonresidents, the burden of proof is shifted to the Bulgarian taxpayer to demonstrate the arms length nature of the transaction. Income from the sale of a residential apartment and a car, subject to the terms specified in law; Subsidies for children paid by the State; Grants given to Bulgarian students for studies in Bulgaria and abroad; Prizes from lotteries and games of change; Prizes given by the State for cultural works; A profit from the sale of assets received as an inheritance or a gift; Working clothes and uniforms supplied free of charge to an employee. The condition is to be insured with the General Illness and Maternity Fund for a period of at least 12 months. groups of basic economic activities for 2021 in accordance with The social security contributions are generally calculated as follows: The employer has to pay 60 % of the insurance contributions, the employee the remaining 40 %. Country and data compliance complexity covered. An increase in the monthly contribution basis cap is also provided. The amount, that individuals entitled to tax relief for children will deduct from the annual personal income tax base, shall be increased as follows: Amount that is deducted from the annual tax base. The tax period for VAT reporting is one month and coincides with the calendar month. VAT is levied on the sale of goods and the provision of services. Payroll reporting declarations Declaration 1 "Details of the insured person" and Declaration 6 "Social security and health insurance contributions, and personal income tax due under Art. Taxation in Bulgaria - Wikipedia p.3 from Social Security Procedure Code). . Broad-based changes to the Bulgarian Personal Income Tax Act Increase of the annual tax relief for The total amount of social security contributions is 32.70%-33.40% on the gross remuneration, with the employer contributing 18.92%-19.62%, depending on the insurable income. Fund Common Disease and Maternity rate is 3.5 %. The amount of the benefit is 90% of the fathers insurance income for the last 24 months. 160, para. Social security income for determining health insurance contributions, For persons on leave due to temporary work disability, pregnancy and childbirth and raising a small child. With the insurance in an occupational pension fund you receive the right to a term occupational pension for early retirement, received until the acquisition of the right to a pension for insurance length of service and age from Social Security. The insurer has to pay 60% and the insured person the remaining 40%. Immedis is passionate about creating a sustainable future. Bulgaria Social Security Changes for 2022 Orbitax Tax News & Alerts Taxes and payrolls: the peculiarities of the Bulgarian labour market Gains and losses on the disposal of shares listed on the Bulgarian and EU stock exchanges are exempt. To be entitled to maternity leave allowance it is necessary to have a minimum length of service at least 12 months prior to taking the maternity leave. Discover how EY insights and services are helping to reframe the future of your industry. Each parent can use up to 5 months of this leave with other parents consent. Income Tax. The contribution is at the expense of the employer. Transfer tax is imposed on the sale or exchange of immovable property and motor vehicles, at rates ranging from 0.1% to 3%, determined by the municipality. the cost of transport to work, which is at the expense of the employer. & Middle East (SEEME). Accounting, payroll and tax services expert. 2023 tax rates and social security contributions in Bulgaria EY is a global leader in assurance, consulting, strategy and transactions, and tax services. Previously this was 8 months of service. 73, Para. Privately Owned Vehicle (POV) Mileage Reimbursement Rates remember settings),Performance cookiesto measure the website's performance and improve your experience,Advertising/Targeting cookies, which are set by third parties with whom we execute advertising campaigns and allow us to provide you with advertisements relevant to you,Social media cookies, which allow you to share the content on this website on social media like Facebook and Twitter. How do you move long-term value creation from ambition to action? By using our website you agree to our use of cookies as set out in our Privacy Policy. GP 450. The employer and the insured person contribute every month to the amount determined by the Social Insurance Code. Contributions can be made by the employee at their own expense or the employer as a part of a social benefits package plan. Detailed analysis of the tax laws for 190+ countries. Basic social security (unemployment insurance etc. Universal pension funds: this type is mandatory for those born after 31.12.1959, who are insured in the state social insurance. Workplace pension. They must pay any outstanding tax due (the balance between the advance payments and the total due on the tax return) by the 30th of April of the year following the taxation period. . Annual tax returns must be completed and submitted during the period from the 1st day of March until the 30th day of June at the National Revenue Agency. Upon submission by March 31, 2021, individuals are entitled to a 5% discount on the tax due, but not more than BGN 500; The term for registration of employment agreements remains up to 3 calendar days from the date of their conclusion/ amendment. Wages Paid to U.S. Citizens and Resident Aliens Employed Abroad The tax on dividends and liquidation shares remains at 5% in 2023. A gift tax is levied at a rate ranging from 0.4% to 6.6% of the value of donated property, depending on the relationship between the donor and the donee. 15 Surprising Things Not To Do In Bulgaria For A Safe Trip, Get Moving To Bulgaria Your Free Exclusive eBook, The son of a Bulgarian Immigrant That Change the World. Reduced ability to work at 50% and above allows the taxable income to be reduced by BGN 7 920 (around EUR 4 049), Voluntary insurance contributions made by the individuals for up to a 10% reduction of the taxable income, Certain donations, up to 65% reduction of the taxable income basis, For young families that have taken a housing loan - the tax is reduced by the amount of interest paid on the first BGN 100 000 (around EUR 51 129) of the housing loan, BGN 6 000 (around EUR 3 068) - for one child, BGN 12 000 (around EUR 6 136) - for two children, BGN 18 000 (around EUR 9 204) - for three or more children, Disabled children (amounts valid for 2022) - BGN 12 000 (around EUR 6 136) for raising a child with 50% or above the degree of disability, Cashless payments no more than BGN 500 (around EUR 256), For improvements and/or repairs of real estate up to BGN 2 000 (around EUR 1 022), Food provided in kind to employees working in certain conditions, Food vouchers up to BGN 80 (around EUR 41) per month. Soletradersaresubjecttoa15%annual flattax. amendments, please contact Mr. Ioannis Kesisis, country manager of The same rules apply to self-employed persons. In cases where the remuneration for the month is accrued and paid after this term the submission takes place by the end of the month in which the remuneration has been accrued or paid, as well as until now. The maternity leave allowance is to be paid by the National Social Security Institute. Additional voluntary pension insurance, in which any individual over 16 can participate. An individual is resident if he/she has a permanent address in Bulgaria, resides in the country for more than 183 days in any 12-month period or is sent abroad by the state, state organizations or a Bulgarian enterprise; or if his/her center of vital interests is in Bulgaria. The funds are raised from health insurance contributions, transferred by and for all insured individuals, and spent on compensations in insurance cases (i.e. Orbitax Tax News and EY Tax Alerts from across the globe. New WhistleblowingActenters into force in Bulgaria, 2023 tax rates and social security contributions in Bulgaria, 2022 Law Firm "Kancheff, Gicheva, Marnikas and Partners" Web Design. East. It must be drawn up and signed in duplicate, one for each of the parties. A new tax relief is introduced for individuals who will be able to deduct from the total annual tax base the labor payments made during the year in connection with improvements and/or repairs of a real estate in the total amount of up to BGN 2,000 applied to income earned in 2021. The employer contributes 5,240.84 to 5,434.74 to social security and the employee 3,817.06.
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