Bulgaria has passed the amendments to the draft Budget Act 2023, which aim to protect wages and social security benefits. The government plans to reduce spending to combat inflation and strengthen the economy, but will not raise taxes. The key tax measures relate to corporate taxation.
Modifications to the Corporate Income Tax Act (CIT Act) and the Tax and Social Security Procedures Code (TSSPC) encompass a range of measures. These changes encompass the introduction of electronic food vouchers alongside the existing paper format, the stipulation that dividend disbursements must be conducted solely through bank transfers, and the expansion of administrative responsibilities concerning the transportation of high-fiscal-risk commodities.
- Electronic Food Vouchers: Employers now have the option to provide electronic food vouchers valued at BGN 200 (approximately EUR 100) per employee per month. These expenses can be exempt from taxation, subject to specific conditions. Additionally, the legislation permits issuers of food vouchers to continue offering paper vouchers until 30 June, 2024. During the period from January 1 to 30 June, 2024, employers are required to provide employees with either paper vouchers according to Article 209 of the CIT Act or electronic food vouchers under Article 209a of the CIT Act for a given month.
- Dividend Payments: In terms of dividend payments, dividends equal to or surpassing BGN 1,000 (around EUR 500) must now be disbursed exclusively through transfers or deposits into designated payment accounts. This requirement is also applicable to employers with 100 or more employees, with certain exceptions for short-term seasonal agricultural laborers. This measure is designed to curb tax evasion, particularly since the previous regulations allowed cash dividend payments, which were sometimes exploited for tax-avoidance purposes. These rules will be enforceable from 1 September 2023.
- Administrative Obligations for High-Fiscal-Risk Goods Transport: Furthermore, significant adjustments have been made regarding the introduction of various new administrative obligations concerning the transportation of high-fiscal-risk goods. It is explicitly specified that a duty to pre-declare data related to the carriage of such goods applies to various entities, including acquirers/transferors engaged in triangular transactions, final consignees/first suppliers within chains of successive goods supplies, suppliers/sellers, and importers. Examples of high-fiscal-risk goods encompass a variety of food and energy products. According to the TSSPC, the list of goods deemed to carry high fiscal risk is determined through an order issued by the Minister of Finance, based on a well-justified proposal from the executive director of the National Revenue Agency. This order and the associated list are made publicly available on the Ministry of Finance and National Revenue Agency websites.
