site.btaBCCI: Bulgaria No Longer Has EU's Lowest Corporate Tax

BCCI: Bulgaria No Longer Has EU's Lowest Corporate Tax

Sofia, February 17 (BTA) - As of 2017 Bulgaria no longer has the lowest corporate tax in the EU due to the intense competition in the area of tax legislation, said the Bulgarian Chamber of Commerce and Industry (BCCI) on Friday.

Implementing planned changes in 2017, Hungary stripped Bulgaria of one of its main attractions for investors. The tax burden for companies in Hungary will be reduced from 19 per cent for big businesses and 10 per cent for small and medium sized businesses and replaced by a 9 per cent flat rate.

In 2017 Hungary reported a considerable increase in the minimum working wage by 17.5 per cent, from 350 euro to 412 euro, based on an agreement between the government and the social partners, the BCCI said. In addition, Hungary decreased social insurance contributions paid by employers y 5 percentage points. The BCCI pointed out that a sensible government doesn't talk about only increasing wages but decisions are taken on other elements that will ensure balance between the interests of the state, the employers and the workers.

According to the employer organization as a result of this Bulgaria has slipped in a number of international rankings: on economic freedom from 55 in 2015 to 60 in 2016, on prosperity from 51 in 20015 to 57 in 2016, and on doing business from 38 in 2016 to 39 in 2017, despite its good macroeconomic indicators.

Some countries, thanks to mutual concessions on the part of the government and the social partners, agree more attractive conditions for investors, both domestic and foreign, the BCCI said, adding that in Bulgaria, due to "playing games with the trade unions," the minimum working wage is increased administratively instead of adopting a mechanism for its calculation. The increase of the minimum wage should be coupled with lowering taxes or social security contributions owed by investors in order to achieve a positive effect, the BCCI said.