Bulgarian Parliament approves deposit interest tax cut

Written by on November 5, 2013 in Business - No comments

Bulgaria’s MPs voted on November 5 to approve at second reading amendments to the country’s tax laws as part of the preparations to pass the 2014 Budget bill, including provisions to reduce the deposit interest tax by two percentage points to eight per cent.

Last year, as part of the Budget proceedings, Parliament passed a bill that imposed a 10 per cent tax on all revenue from deposit interest. Although the socialist party, which is part of the current ruling coalition in Parliament, campaigned on a promise to remove the tax, it later decided to keep the tax in place for the time being.

Instead of removing the tax altogether, the intention is to gradually phase out the tax by 2017, reducing it by two percentage points every year. The amendment bill passed with 93 votes in favour, 31 against and 23 abstentions.

Last week, the Constitutional Court ruled that taxation of income from bank deposits that had been paid in advance was constitutional, rejecting a challenge from the ombudsman’s office submitted in March 2013. The law says that the tax is due on all fixed-term deposits on which interest was due after the tax was introduced on January 1 2013, even if the interest had been paid in advance.

(Photo: Clive Leviev-Sawyer)

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