Amendments to the Corporate Income Tax Act envisage a 5 percent tax on interest and copyrights income in certain cases
November 17, 2010
The amendment will apply to cases in which both of the following conditions are met: the person is a foreign entity from an EU member state and is operating a business in an EU member state. These changes were passed on second reading with amendments to the Corporate Income Tax Act. Taxpayers do not attach to their annual tax declaration evidence of the amount of taxes paid abroad, where incomes and profits originate in a country with which a treaty on avoidance of double taxation is in effect. When as a result of increased employment, an entity operating in a municipality, previously considered eligible for tax relief drops out of the preference list the entity keeps the same rate of corporate income taxes until 2013. The law contains detailed provisions with regards to businesses providing food vouchers to their workers. In order to have greater predictability and ensure revenue in the coffer, the total annual quota for food vouchers will be approved annually with the state budget for the respective year. The amendments envision significant increase in financial penalties for employers who provide vouchers above the stipulated individual quota, or offer vouchers without acquiring individual quota. The penalty in the first case is equal to the excess amount of the provided vouchers but not less than BGN 2000. For operators providing vouchers without having an individual quota, the penalty is equal to the face value of vouchers and still not less than BGN 2000.
Cigarettes longer than eight centimeters, without the filter, will be subject to double excise duty. This is stipulated with the amendments passed on second reading to the Excise Duty and Tax Warehouse Act. The excise duty for each cigarette longer than eight centimeters, without the filter and mouthpiece, but less than 11 cm will equal the one for two cigarettes. Currently this has applied to cigarettes longer than 9 cm up to 18 cm. The amendments increase also the price of plain tobacco, which will be taxed the same as fine cut tobacco. This will be done by expanding the definition of fine-cut tobacco - for such will now be considered tobacco, in which the tobacco particles have a cut width of less than 1.5 mm, currently being - less than 1 millimeter. In brief, the adopted change to the tobacco excise duty ups the price of tobacco from the present BGN 100 to BGN 130 per kilogram. The law prescribes the price to rise to BGN 152 per kilogram as of January 1, 2012. The excise duties on petrol, diesel and kerosene will be increased as well in order to reach the minimum EU levels. Thus the price of petrol will up from BGN 685 to BGN 710 per 1000 liters, while for diesel and kerosene - from BGN 600 to BGN 615.
Parliament approved an equal tax rate of 9 percent for group and individual hotel accommodations with amendments passed at second reading to the VAT Act. So far, the rate for individual accommodations was 20 percent, and for group 7 percent.
The proposal moved by Vanyo Sharkov and other members of the Blue Coalition for a tax rate of 9 per cent, instead of the present 20 %, on medicines and textbooks was rejected.