Parliament is in the process of approving a series of laws that will affect business practices and costs.
According to amendments to the Accounting Act, the second reading of which was approved by Parliament on December 14, enterprises must draft their annual financial statements by March 31 the following year.
A report by Bulgarian news agency BTA said that, under the amendments, small enterprises would draft abridged individual statements while sole traders only profit and loss accounts.
Small firms will be exempt from drafting an annual report on their operations and, dependent on certain conditions, the obligation to draft and present consolidated financial statements. They will not have to hold an independent financial audit of their annual financial statements.
Enterprises where annual financial statements are pending mandatory independent financial audit, will also be obliged to draft an annual report on the operation of the company.
Parliament decided to keep the taxable income ceiling unchanged at 1400 leva next year, rejecting a proposal for a 100 leva increase. The increase in the taxable threshold would have added more than 15 million leva to the treasury.
MPs voted to increase the maximum size of monthly unemployment benefits to 180 leva, rejecting a proposal for a 160 leva ceiling. Child benefits for stay-at-home mothers also will be 180 leva in 2007.
The social insurance ceiling will stay unchanged. Parliament rejected a last-minute proposal by the Labour and Social Policy Ministry to increase the social insurance ceiling during the second reading of the 2007 National Social Security Institute budget.
On December 13, Parliament gave its final approval to the revenue section of the National Health Insurance Fund (NHIF) budget for 2007, deciding that the health insurance contribution for 2007 is six per cent of contributory income.
On December 13, Parliament approved the second reading of amendments to the Excise Duties and Tax Law, Focus news agency said. The changes provide for Bulgaria to equalise the taxation of home made rakiya (Bulgarian grape brandy) with the EU law regulations in this respect. The tax will be 50 per cent higher than the standard excise on alcoholic beverages. The excise duties on home made rakiya are to: up to 30 l, 2.20 leva a litre and above 30 l, 4.40 leva a litre.
From 2007, the fuel excise duty will increase by 0.12 to 0.13 leva depending on the type of fuel. The law also introduces excise duties on coke, coal and electricity. For coke, the duty is 0.30 leva/GJ and for electricity for economy and administrative purposes, one lev a megawatt hour will be levied.
Bulgarian-language newspaper Banker reported on December 11 that an entirely new Value Added Tax (VAT) Act and Regulations for its application, to enter into effect as of January 1 2007, were approved by Parliament in view of Bulgaria's forthcoming EU membership.
The VAT rate remains 20 per cent and will be applicable to all realised goods and services on Bulgaria’s territory, excluding the tax-exempt ones. The mandatory threshold for VAT registration will stay unchanged at 50 000 leva after Bulgaria’s EU accession. Some of the existing provisions in the currentl VAT Act are also present in the newly adopted law. But new names have been introduced for many of the concepts, such as: place of delivery, tax event, internal delivery in the community and internal acquisition within the community.
VAT shall be charged on almost all goods and services that are bought and sold within the EU. However, a number of countries have accepted in addition to the standard VAT rate a reduced tax for more sensitive groups of commodities. This means that Bulgarian firms trading with EU companies should be aware of the procedures and rates in the other EU members. According to the EU legislation, the VAT rate cannot be lower than 15 per cent, and the reduced tax cannot be lower than five per cent. No VAT is charged on goods and services exported from the EU. VAT is calculated on imported commodities and services in order to equalise their value with that in the community. VAT is levied on goods imported from third countries into any EU member and from that moment on they become internal for the community and are VAT-exempt when moving within EU territory.
