The National Council for Tripartite Cooperation will discuss proposals for changes to tax laws laws for 2025 at an extraordinary meeting today at 11:00 a.m., the press service of the Council of Ministers announced.
BTA recalls that on September 18, the Ministry of Finance published for public discussion draft Laws on Amendments and Supplements to the Law on Corporate Income Taxation (CIT), the Law on Personal Income Taxes (PIT), the Law on Income Tax value added (VAT) and the Act on excise duties and tax warehouses (ZADS).
The proposed changes are mainly technical, related to the implementation of European directives and requirements of the Organization for Economic Cooperation and Development (OECD), as well as related to the need to specify the regulatory framework.
Among the proposals for changes in the ZKPO are for the continuation of the application of the tax relief, which represents a minimum aid through the concession of corporate tax in the cases of production activity in municipalities with unemployment higher than the average for the country. The new minimum aid will apply for the period from 1 January 2024 to 31 December 2030, including corporate tax for 2030, and the proposed provisions are in line with the European Regulation of 13 December 2023 relating to the implementation of the de minimis aid.
It is also proposed to clarify and/or supplement the texts related to the application of the regime for the taxation of multinational and large national groups of enterprises with an additional tax and with a national additional tax, which are in accordance with the administrative guidelines adopted by the OECD for the application of global minimum level of taxation.
The amendments to the Income Tax Act specify the provisions related to the right to use tax relief for children and tax relief for children with disabilities by a parent who has not been granted the exercise of parental rights in cases of divorce and in cases where there is no marriage between the parents. The provisions of the law are being updated with a view to synchronizing them with the current rules for submitting taxes to the National Revenue Agency.
Among the proposals for amendments to VAT are to create provisions for special regimes for small businesses - the domestic small business regime and the EU small business regime - to enable small businesses established in Member States different from the one in which VAT is due, to be able to benefit from the exemption from the obligation to charge VAT up to the registration threshold. It is proposed to introduce an obligation to provide data on the available fixed assets and material stocks by the persons registered under the law.
It is envisaged that the data will be provided from the current accounting records of the persons and will cover the amount of fixed assets available with a tax base upon acquisition, production or import equal to or greater than BGN 5,000, assessed at the acquisition price and the sum of the total amount of inventory on hand, assessed in accordance with the applicable accounting standards, and for persons that are not enterprises within the meaning of the Accounting Act, the applicable accounting standards are the national accounting standards.
The changes to the ZADS are due to the need to specify the regulatory framework and avoid opportunities for divergent tax interpretation. It is proposed to clearly define the concepts regarding liquids for electronic cigarettes, containing or not containing nicotine, in order to eliminate the practical difficulties, ambiguities and divergent interpretations that have arisen for the purposes of implementing the ZADS, related to the control of import, export, production, trade and any operations with liquids for e-cigarettes, explains the Ministry of Finance.
Provisions are being created to restrict taxable persons from restocking with tobacco products in the event of new excise rates coming into force. It is also proposed to introduce a mechanism to improve the interaction of the customs administration with the persons carrying out forwarding, logistics and transport activities in order to minimize the possibility of cross-border deliveries of concealed excise goods in Western European countries.
The Bulgarian Chamber of Commerce (BCC) expressed in their opinions of October 17 their principled support for the proposals for changes in the tax legislation. However, BSK categorically objects to the proposal for changes in VAT related to the introduction of an obligation to provide data on available fixed assets and material stocks.
According to the BSK, such a measure will lead to an increase in business costs, a need to change the organization of work processes due to the need for a continuous inventory of assets and turning reporting for tax purposes into the main business of enterprises. The provisions will have a clear negative impact on micro- and small enterprises, according to BSK.
KNSB commented at a forum on October 25 that the tax system should be structured in such a way as to reduce the trend of large income inequality that is observed in our country. The tax system is not only a source of revenue, but is the main mechanism for creating justice, said the president of the trade union Plamen Dimitrov.
The KNSB proposes the introduction of a tax-free minimum income for individuals equal to the amount of the minimum wage for the relevant year, an increase in the dividend tax rate to a minimum of 10 percent, the introduction of a tax on financial transactions and a digital tax, as well as of the "harmful foods" tax. Dimitrov also pointed out that the taxation of excess profits according to the current regulations of the European legislation is a proposal that is behind the KNSB.