Bulgaria/March 2013
Some new amendments in the Corporate Income Tax Law in Bulgaria have been approved by the Bulgarian National Assembly, and entered into force on January 1 2013.
One of the most significant amendments concerns the advance payments for corporate income tax, such as: The method of calculation; the range of tax obliged entities; the criteria for assignment of the base on monthly or three months basis; the declaration and payment of the advance payments.
The amendments related to the method of calculation of the advanced payments prescribes that the base for the calculation will be the forecast tax profit that the entities expect to realise in the current tax year. The tax result from the previous year will not be a factor as it used to be until 2012. In this way the correction coefficient, regulated in previous years had been dropped off. If the final corporate income tax obligation increases by 20% from the amount of the paid advances during the year, a penalty interest in accordance with the Law on Tax Interest is applicable for the period from April 16 until December 31. In addition, all entities have the right to submit a Declaration for increase/decrease of the advanced payments.
The exemption for the corporate income tax advance payment remains for the new established entities, as it was, but also stays for companies that had less than BGN 300,000 net income in the previous year (it was BGN 200,000 till now).
According to the amendments to the criteria for determination of the type of the advanced payments, on monthly or three months basis: If the net incomes of the entity are at the range of BGN 300,000- BGN 3 million, the payments should be executed on three months basis; for higher than BGN 3 million, companies are obliged to proceed with monthly advanced payments.
Regarding the declaration, the amendments say that the declaration of the advanced payments should be done along with the submission of the annual tax form for the previous year. The payments should be done as follow: For three months payments-not later than 15th of the month following the quarter that they are related for. There is no advance payment for the last quarter of the year. For entities that are obliged to pay on a monthly basis the term for the first three months is 15th April and respectively for the other months 15th of the following month.
The aim of the amendments is to facilitate the whole process of calculation, accrual and execution of the advanced payments for the companies, as well as to increase the collection of this tax.
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