Employment income tax is payable by individuals, who receive income from committing activities as a sole trader. According to law there are two cases:
1) For individuals resident and ordinarily resident in Bulgaria – tax is due on total remuneration received in and outside of Bulgaria
2) For individuals not resident in Bulgaria – tax is due on total remuneration received for duties performed in Bulgaria
To a sole trader is valid the principle of “accounting” for determining the total annual income – it is formed by the income relating to that year regardless when paid.
Income from employment is the only type of income, which is assessed not only on an annual base but also on a monthly tax base. The monthly tax base is defined as the taxable income accrued for the month is reduced by the deducted by the employer contributions required to be borne by the individual under the Social Security Code and the Health Insurance Act or any similar compulsory insurance abroad.
There are two tax rates. The monthly tax base after the reduction of its tax relief shall be multiplied by tax rate of 10 percent and for the income obtained as a seafarer – tax rate is 1 percent.
The obligation for the determination, withholding and payment of income tax on income from employment rests entirely with the employer.
The advance tax on income from employment shall be paid to the state budget on account of the territorial directorate of the National Revenue Agency as follows:
• until the 10th of the month following the month in which the tax was withheld;
• end of the month following the month in which partial payments are made.
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