New Taxes in Bulgaria

November 16, 2012 Taxation in Bulgaria

tax on gamblingSOFIA – Bulgarians will soon feel the burden of extra taxes, as bank deposits and gambling revenues are brought into the tax net.

On November 15th the parliament of Bulgaria approved several amendments to the national Value Added Tax Act, which, amongst other changes, allows the VAT to be levied on interest earned from bank deposits and on the revenues of gambling operators.

From January 1st 2013 banks in Bulgaria will be responsible for withholding the 10 percent tax on interest earned from fixed term deposits its clients, and will also be charged with he task of transferring the collections to tax authorities.

It is expected that the bank tax should raise approximately BGN 120 million in the first year alone.

Supporters of the new regulations claim that through the tax wealthy individuals to contribute more to the national tax take, while opponents of the measure suggest that it will have a disproportionate impact on low income earners and taxpayers saving for retirement.

The VAT on gambling, which was approved on the same day, will be applied at 15 percent on the turnovers of gambling businesses in the country, including online operators.

To ensure the effectiveness of the VAT on gambling revenues, next year the government will launch a new program to close down unlicensed gambling websites.

Prior to the approval of the VAT change on gambling, some members of parliament proposed that the tax rate should be lowered to 7 percent for online gambling operators, as this could encourage more international entrepreneurs to seek gambling license in Bulgaria, but, the proposal was eventually rejected due to strong opposition from the national gambling industry.

Photo by teddykiller