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New Deposit Tax Comes into Effect in Bulgaria

A new and controversial 10% levy on people's interest earned from bank deposits comes into force in Bulgaria from January 1, 2013.

Bulgarians will be obliged to include the income on bank deposits in their tax declarations a year later – in 2014 – after the taxation process is streamlined.

The so-called term-less deposits, saving accounts, child savings and current accounts will not be taxed.

The banks will be responsible for declaring the tax while only those who file written declarations with the National Revenue Agency, NRA, will be mandated to file declarations on tax from deposits. Taxation on interest earned from deposits will be done at the time it is paid, even if the account was opened in 2013.

The tax was proposed by Finance Minister, Simeon Djankov and slammed by the opposition, who voiced concerns that the new tax will affect mainly people with small savings and retirees.

Economists and the central bank have also opposed the government's decision to introduce a 10% tax on bank deposit income, saying this would dent people's savings and shake the bank system foundations due to capital outflow.

The government says the new tax aims to raise BGN 120 M and force richer people to pay taxes on the income they earn from bank deposits.

Banks in Bulgaria continue to record steady growth in savings, a trend which has been gaining momentum throughout last year, but breakdowns show that the increase is due to mainly companies and only slim percent of the private savers.

Good job I've almost spent my deposit savings then. [You must be registered and logged in to see this image.]

dont understand this. what will happen to those who have their pensions paid into bulgaria, is that a bank deposit :shocked1:do they have to declare this on their nil tax return. ::

starlite wrote:

dont understand this. what will happen to those who have their pensions paid into bulgaria, is that a bank deposit :shocked1:do they have to declare this on their nil tax return. ::

I think this nil tax return is a joke any way

starlite wrote:

dont understand this. what will happen to those who have their pensions paid into bulgaria, is that a bank deposit :shocked1:do they have to declare this on their nil tax return. ::

No, the pensions are usually paid to a payment account and the tax is supposed to be on deposit accounts.
Also, it is not necessary to submit a tax return as an individual if you hven't got any other incomes. Actually, only if you have got incomes different than pensions, employment contracts, dividends and similar, only then you should submit a tax return. Banks will charge your deposit account automatically (but I think it's not a big deal, anyway there is a tax on deposits in UK too and almost everywhere in EU, it's just 10% on the interest, not on the deposit itself) and they will not declare it to the NRA. Keep in mind that we are talking about individuals and not about the entities. So it doesn't matter if you have got incomes or not your company should submit an annual tax return which includes:
1. Declaration to NRA (National revenue agency)
2. Declaration or report to NSI (National statistics institute)
3. To prepare and submit an annual financial report (balance sheet, gross incomes report, cash flow report etc....) to the Commercial register.
This can be done by your accountant. If you haven't got one check this out [url:7pw45v96]http:
//www.
smetki.
com/english/niltaxreturn.
htm[/url:7pw45v96]