Bulgaria Starts Taxing Income that Has So Far Been Non-Taxable

Bulgarian Parliament in session, Sofia, November 24, 2023 (BTA Photo)

Sofia,

24.11.2023 16:18

(BTA)

Parliament adopted Friday on first reading amendments to the Income Taxes on Natural Persons Act that make taxable income which has so far been non-taxable. That is done by broadening the definition for remuneration which, according to the bill reasoning, will deter tax evasion by paying part of remunerations in the form of non-taxable income.

The MPs also voted to make non-taxable the proceeds from the sale of movables to persons authorized to dispose, recycle or transport waste, and raise to BGN 1,200 from the current BGN 100 the threshold for cash payments in trades for scrap metal.

The amendments introduce a unified approach to the taxation of income from immovable property from sources inside Bulgaria accruing to non-resident natural persons. They also set in place a 10% deductibility for the profit realized on the sale or exchange of financial assets, including virtual and crypto currencies.

The definition of employment relationships is revised so as to avert the simulation of employment relationships in the form of civil-law contracts by equalizing the ratio in which employees and employers share social security contributions under both employment and civil-law contracts.

An alternative income tax would be introduced on the income from gathering wild mushrooms and fruits, including truffles but excluding herbs.

Gambling operators will be required to report to the National Revenue Agency the cash and in-kind wins exceeding BGN 5,000.

The Socialists called the revisions "ill-advised" and "hard to enforce". They believe that the broadening of the definition of employment relationships is "most controversial".

GERB-USD accused the government of pursuing a vendetta against the tourist sector, especially the restaurant business.

/MR/