Are there social security/social insurance taxes1 in Bulgaria? If so, what are the rates for employers and employees?
Generally, the employment income subject to social security and health insurance levies coincides with the taxable employment income: the employee’s gross monthly salary which includes basic remuneration, any additional employment-related remuneration that may be provided, say, for hazardous working conditions, for length of service, for night, and overtime work, and so on. However, a distinction should be made here: there is a maximum insurable threshold above which the income is not subject to such charges. For year 2015, this maximum amounts to BGN2,600 per month or BGN31,200 per year.
Furthermore, the burden of the insurance charges is split between the employer and the employee in a ratio of 55 percent to 45 percent for pension fund purposes and 60 percent to 40 percent for all other funds. The sample calculations as set out in the table below indicate the exact split per insurance fund.
|Type of insurance||Paid by employer||Paid by employee||Total|
|General illness and maternity||2.1%||1.4%||3.5%|
|Guaranteed receivables of employees fund||0.0%||0.0%||0.0%|
|Health insurance fund||4.8%||3.2%||8.0%|
* For individuals born after 31 December 1959, 5 percent of the total 17.80 percent for Pension Fund are accumulated in Additional Mandatory Pension Fund.
** Social security contributions payable by the employer include payments for Employment Accidents calculated at a rate depending on the economic activity, which falls within the range 0.4 percent to1.1 percent. For the purposes of the calculation the applicable rate is 0.5 percent regarding the classification Other Business Services.
*** Please note that the contribution payable only by the employer to the Guaranteed Receivables of Employees fund is currently suspended.
All employees who work under standard employment contracts (including expatriates) must pay social security contributions in Bulgaria unless they are exempt under a bilateral treaty or the EU Regulation on social security.
Minimum monthly levels of income for insurance purposes were introduced as of 1 January 2003 for various business activities and professional groups. Freelancers, sole traders, and partners in companies may choose their monthly social security basis and make contributions based on income that ranges between the minimum (BGN420) and maximum (BGN2,600) monthly levels. They are subject to mandatory social security coverage for the risks of old-age and death, and optionally for general illness and maternity. The final annual social security liabilities of these individuals are determined on the basis of their actual annual taxable income but not higher than the annual maximum insurable income.
Health insurance contributions of 8 percent of employment income are mandated for all Bulgarian individuals and foreign nationals residing in Bulgaria on a permanent basis split between employer and employee.
Please note that individuals who render independent professional services are required to fully cover their health insurance contributions.
There are no wealth taxes in Bulgaria.
Inheritance tax is levied on property situated within the country or abroad, inherited by will or by law by Bulgarian citizens, as well as the property of foreign citizens within the territory of the country. The tax rate is determined depending on the relationship of the beneficiary to the donor.
Gift tax is due for free transactions. The rate of the tax varies depending on the locality; lower rates are provided for donations between relatives.
The Bulgarian legislation levies real estate tax on all property situated in the buildable region of populated areas. The tax varies depending on the locality and is determined by the Council of each locality separately.
Supplies of goods and services are generally subject to a value-added tax (VAT) based on the type of goods or nature of services. Value-added tax is charged by VAT registered persons. In view of this, the following types of supplies may exist.
No unemployment taxes are levied in Bulgaria.
Are there additional taxes in Bulgaria that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
Another local tax levied at municipality level is the fee for collection of waste.
1Information in this section is summarized by KPMG Bulgaria OOD, the Bulgarian member firm of KPMG International, based on the Bulgarian Compulsory Social Security Code (the Code).
© 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.