A BUSY week of fiscal legislation preceded this week's adoption of the budget for next year.
Changes to Local Taxes and Fees Act (LTFA), Patents Act (PA), Income of Natural Persons's Income Act (INPIA) and Corporate Taxes Act (CTA) were among the laws approved.
On Thursday, Parliament passed one of the major amendments providing that revenue from fees on tourist accommodation would be credited to the budgetary accounts of municipal governments rather than the municipal funds for tourism development.
Parliament rejected the provision that fees should not exceed one lev in daily proceeds a person. MPs also removed a provision which provided for a 50 per cent discount on such fees for minors below 18 years of age and retired people.
Municipal councils will also be in charge of determining the size of licence fees charged on street stalls, property development, and overhaul of buildings.
Local authorities will charge initial as well as annual business licence fees. Their size will be fixed by municipal councils. Such fees will be charged on trade in tobacco products, storage and wholesale and retail trade in products derived from grapes, spirit, distillates and liquor, and liquor sales at public catering and entertainment facilities.
A person who declares false data resulting in reduction of or exemption from fees will be fined between 50 and 200 leva; pecuniary punishments for juristic persons and sole traders will range between 100 and 500 leva.
Owners of real estate agencies will pay much less in patent taxes, in terms of changes to the INPIA. Parliament voted to decrease advance instalments on the income of freelancers from 20 per cent to 15.
Starting next year, the holdings dealing with sale and purchase, exchange and rent of real estate in Sofia will pay an annual tax of 3500 leva, down from 6600 this year. For Varna, Bourgas and Plovdiv, the patent will be reduced to 2500 leva, again from 6600 leva.
Starting in 2003, hotels with more than 20 beds will not be subject to patent taxes. The same is valid for retail traders with shops of higher than 100 sq m net trade space, wholesale traders, construction and restaurants with over 100 seats. The additional tax of five leva a square meter is waived. It was introduced early this year to define realistically the volume of activity of crafts people.
The patents of cosmeticians will be reduced significantly and will be almost equal to that of hairdressers.
Also last week, MPs passed on second reading changes to the Corporate Income Tax Act (CITA). One of the major changes provided that a tax return on corporate income tax tax until March 31 of the subsequent year would carry a default payment of 2000 leva. For a second-time violation, MPs agreed to double the amount.
The amendments will enter into force on January 1, 2003, excluding a set of provisions, according to which expenses for employee food vouchers of up to 40 leva a person per month will be exempt from flat tax. The latter provisions will become effective at the beginning of 2004.
On Friday, Parliament ruled that municipalities would exempt from taxes companies operating in high unemployment regions, if unemployment exceeds the national average by more than 50 per cent. The list of municipalities applying corporate income tax incentives will be subject to annual approval by the Finance Minister.
Further, the depreciation rate for motor vehicles was raised from 20 to 25 per cent, and a provision recognising accelerated depreciation of motor vehicles was repealed. The depreciation rate for computer software and hardware was set at 50 per cent.
Firms where at least 80 per cent of the employees working under employment contracts are registered as permanent residents of an incentive-applying municipality will also be exempt from taxes. Another requirement in this context is that investors should not incur overdue liquid tax liabilities or a social security debt, including interest thereon.
A corporate income tax break will be allowed when the money entered as reserve funds has been invested in fixed assets necessary for carrying out production activity, or spent on remuneration to employees until the end of the year following the year for which the tax break is provided. A corporate income tax break will be granted for five consecutive tax years.
Such an incentive may also be used in the event of a subsequent rise in employment, leading to a lower unemployment rate, which rules the removal of the respective area from the list of incentive-applying municipalities.
Monthly advance payments for corporate income tax will be enforced at a 23.5 per cent tax rate, not at the 15 per cent rate applicable until now.
Changes to Local Taxes and Fees Act (LTFA), Patents Act (PA), Income of Natural Persons's Income Act (INPIA) and Corporate Taxes Act (CTA) were among the laws approved.
On Thursday, Parliament passed one of the major amendments providing that revenue from fees on tourist accommodation would be credited to the budgetary accounts of municipal governments rather than the municipal funds for tourism development.
Parliament rejected the provision that fees should not exceed one lev in daily proceeds a person. MPs also removed a provision which provided for a 50 per cent discount on such fees for minors below 18 years of age and retired people.
Municipal councils will also be in charge of determining the size of licence fees charged on street stalls, property development, and overhaul of buildings.
Local authorities will charge initial as well as annual business licence fees. Their size will be fixed by municipal councils. Such fees will be charged on trade in tobacco products, storage and wholesale and retail trade in products derived from grapes, spirit, distillates and liquor, and liquor sales at public catering and entertainment facilities.
A person who declares false data resulting in reduction of or exemption from fees will be fined between 50 and 200 leva; pecuniary punishments for juristic persons and sole traders will range between 100 and 500 leva.
Owners of real estate agencies will pay much less in patent taxes, in terms of changes to the INPIA. Parliament voted to decrease advance instalments on the income of freelancers from 20 per cent to 15.
Starting next year, the holdings dealing with sale and purchase, exchange and rent of real estate in Sofia will pay an annual tax of 3500 leva, down from 6600 this year. For Varna, Bourgas and Plovdiv, the patent will be reduced to 2500 leva, again from 6600 leva.
Starting in 2003, hotels with more than 20 beds will not be subject to patent taxes. The same is valid for retail traders with shops of higher than 100 sq m net trade space, wholesale traders, construction and restaurants with over 100 seats. The additional tax of five leva a square meter is waived. It was introduced early this year to define realistically the volume of activity of crafts people.
The patents of cosmeticians will be reduced significantly and will be almost equal to that of hairdressers.
Also last week, MPs passed on second reading changes to the Corporate Income Tax Act (CITA). One of the major changes provided that a tax return on corporate income tax tax until March 31 of the subsequent year would carry a default payment of 2000 leva. For a second-time violation, MPs agreed to double the amount.
The amendments will enter into force on January 1, 2003, excluding a set of provisions, according to which expenses for employee food vouchers of up to 40 leva a person per month will be exempt from flat tax. The latter provisions will become effective at the beginning of 2004.
On Friday, Parliament ruled that municipalities would exempt from taxes companies operating in high unemployment regions, if unemployment exceeds the national average by more than 50 per cent. The list of municipalities applying corporate income tax incentives will be subject to annual approval by the Finance Minister.
Further, the depreciation rate for motor vehicles was raised from 20 to 25 per cent, and a provision recognising accelerated depreciation of motor vehicles was repealed. The depreciation rate for computer software and hardware was set at 50 per cent.
Firms where at least 80 per cent of the employees working under employment contracts are registered as permanent residents of an incentive-applying municipality will also be exempt from taxes. Another requirement in this context is that investors should not incur overdue liquid tax liabilities or a social security debt, including interest thereon.
A corporate income tax break will be allowed when the money entered as reserve funds has been invested in fixed assets necessary for carrying out production activity, or spent on remuneration to employees until the end of the year following the year for which the tax break is provided. A corporate income tax break will be granted for five consecutive tax years.
Such an incentive may also be used in the event of a subsequent rise in employment, leading to a lower unemployment rate, which rules the removal of the respective area from the list of incentive-applying municipalities.
Monthly advance payments for corporate income tax will be enforced at a 23.5 per cent tax rate, not at the 15 per cent rate applicable until now.
