Taxes deducted at source in pursuance of the Corporate Income Taxation Act should be abolished, representatives of the Bulgarian business community insisted on June 22.
The demand was raised at a public discussion with Deputy Finance Minister Georgi Kadiev, organised by the Confederation of Employers and Industrialists in Bulgaria (CEIB). The CEIB was established in early June through a merger of the Bulgarian International Business Association (BIBA) and the Union of Employers in Bulgaria.
CEIB members generate two-thirds of Bulgarias GDP.
The aim of the forum on June 22 was to examine current procedures for the implementation of the agreements on the avoidance of double taxation which are causing problems for Bulgarian companies with operations overseas.
Bulgarian businesses argue that taxes at source - levied on dividends, interest, copyright and licensing royalties and remuneration from Bulgarian sources for technical services provided by foreign companies, are limiting the development of Bulgarias economy.
The response from Kadiev and other representatives of the Finance Ministry was that taxation at source could not be repealed. However, the rate could be lowered from 15 per cent to 10 per cent through amendments to the Corporate Income Taxation Act (dividend tax will remain at seven per cent).
The bill amending the Corporate Income Taxation Act will also limit the scope of technical service that will incur tax at source to the assembly and installation of tangible assets and to consulting services and marketing research rendered by non-native legal entities.
The new bill will extend the timeframe for the payment of tax under avoidance of double taxation agreements from one to three months.
