On 27 November 2018, amendments to the Personal Income Tax Act were published in the State Gazette. Below is a summary of the main changes.
New tax rules for awards
The monetary and non-momentary awards which are not provided by the employer will be subject to a one-off tax due by the payer. Currently, such income should be reported by the recipient in his/her annual personal income tax return.
In addition, awards with an amount of up to BGN 100 (currently BGN 30) will be exempt from Personal Income Tax.
One-off tax for subsidies and State aid
Subject to a one-off tax will be the gross amounts received from individuals (not registered as farmers) in the form of State aid, subsidies or other support from the European Agricultural Guarantee Fund, the European Agricultural Fund for Rural Development or amounts from the national budget.
Extended mandatory electronic submission of documents to tax authorities
It will be mandatory to submit electronically the following documents to the National Revenue Agency:
- all declarations and reports of self-insured persons;
- the annual report for income paid to individuals under article 73, paragraph 1 of the Personal Income Tax Act; and
- information on the income paid by employers to residents of other EU Member States.
New administrative simplifications
The following administrative simplifications will be introduced:
- abolishment of the requirement for providing a declaration by the spouse that he/she will not apply for tax relief for young families, children (including children with disabilities);
- regarding tax relief for children (including those with disabilities), it will be allowed that the relief can be used by both parents (currently only one parent may use it);
- it is provided that traders that did not perform economic activities (as per the Accountancy Act) during a tax year will be exempt from the requirement to submit annual activity reports.
The above amendments will be effective from 1 January 2019. In addition, as of 1 January 2020 the abolishment of the requirement for employers to provide paper notes on income paid, taxes and social/health securities withheld from their employees unless they request such documents, is envisaged. The information which is included in these notices will be submitted by employers to the National Revenue Agency.