Bulgarian Tax Rates for Corporations: The Status Quo
In 2023, the corporate tax rate in Bulgaria remains at a steady 10%. The tax on dividends and liquidation shares also holds its ground at 5%. Companies are mandated to submit their annual tax returns, along with their activity reports, to the National Revenue Agency by the 30th of June of the ensuing year. For corporations that have not engaged in any activities during the tax year, the submission of these annual documents is not required.
Bulgarian Tax Rates for Individuals: What’s New and What’s Not
Starting January 1, 2023, the minimum monthly wage in Bulgaria is fixed at 780 BGN, equivalent to 399 €. The corresponding minimum hourly wage is 4.72 BGN, approximately 2.41 €, based on a standard 40-hour workweek. The income tax rate for individual taxpayers in Bulgaria continues to be 10%. Employers are tasked with withholding a monthly advance tax at this rate, calculated on the monthly tax base. This tax base is the taxable income for the respective month, less any mandatory contributions. The advance tax must be submitted by the 25th day of the month that follows.
Value-Added Tax (VAT) in Bulgaria: The Unchanged Scenario
In 2023, the standard VAT rate in Bulgaria remains unaltered at 20%. A reduced rate of 9% is applicable to specific categories of goods and services, such as tourist accommodation, selected book types, and certain restaurant services, excluding alcoholic beverages. Companies are required to submit their VAT returns and accounting registers to the National Revenue Agency by the 14th day of the subsequent month.
Social Security Contributions in Bulgaria: The 2023 Framework
For 2023, the social security contributions in Bulgaria remain consistent. The rates are delineated as follows:
- Pensions Fund: 19.8% for employees born before January 1, 1960, and 14.8% for those born thereafter.
- Common Disease and Maternity Fund: 3.5%
- Unemployment Fund: 1%
- Health Insurance Fund: 8%
Additionally, employers are obligated to make contributions to the Industrial Accidents and Occupational Diseases Fund, which ranges from 0.4% to 1.1%, contingent on the industry.
Mandatory Supplementary Pension: A Focus on the Younger Demographic
For those born after December 31, 1959, a compulsory supplementary pension contribution to a universal pension fund is required at a rate of 5%.
Income Limits for 2023: The Bulgarian Parameters
The maximum monthly contributory income for 2023 is set at 3,400 BGN, approximately 1,738.39 €. For self-insured persons, the minimum monthly contributory income is 710 BGN, roughly 363 €.
Final Thoughts: Mastering the 2023 Bulgarian Tax Rates and Social Security Contributions
Navigating the 2023 Bulgarian tax rates and social security contributions is essential for both corporations and individuals. With the rates largely unchanged, the emphasis is on compliance and effective financial planning. Equip yourself with this knowledge to optimize your tax strategy and secure your financial well-being in Bulgaria.
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