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Yearly Archives: 2013

Tax planning in Bulgaria

Mina Boycheva 14/01/2013

All good company managers know that once the company is registered and the office is available, they have to look for a good accountant or an entire accounting company that will take care of the taxes. The accountants will be able to plan all corporate taxes of the company. These include the value added tax (VAT), the income tax, the tax impact on the business and the dividends tax. Actually, the accountants will play a vital role in the company’s life and in every financial move in Bulgaria that has to be done. That is why getting an experienced accountant or a professional accountant company that can offer comprehensive consultation on all taxes in the country and the changes they often go through is important. These accountants will be able to keep the tracks of the monthly expenses of the office, but will also provide the managers with tax information on the Bulgarian tax rates, the due dates for these taxes, as well as the so called process of tax planning. They will be able to support the company with information that concern the applicable VAT in Bulgaria and the VAT registration, and shall be able to represent the company before several national institutions or take care of the property tax.

All good company managers know that once the company is registered and the office is available, they have to look for a good accountant or an entire accounting company that will take care of the taxes. The accountants will be able to plan all corporate taxes of the company.

Currently Bulgaria offers good and acceptable income tax system, which is the lowest one within the tax rates of the European Union. This tax rate is 10 % for corporate tax and withholding tax rate for the non-residents. There is also 5 % tax rate on dividends and tax from shares. The VAT rate is 20 % and there are no plans for its reduction at the moment. There is a reduced rate of VAT that amounts to 9 % for the hotel accommodations and the tourism sector. The good accountant will be able to inform the managers of the company in advance, so that they can use the most profitable way of making business and handling the tax liabilities of the registered company in Bulgaria.

The stable politics that concern the taxes in Bulgaria and the new changes to the better that are expected in year 2013 are great news for the companies that are still hesitating whether to open offices in Sofia and other cities in Bulgaria.

The plans of the Finance Minister Simeon Dyankov include imposing of a 10 % tax on the income from the bank deposits and other taxes on the profit from the stock exchange in year 2013. These measures are taken by the government, as it aims to ensure an equal tax treatment over the income which actually underlines the idea of the flat rate. The plans of the Finance Minister do not include aligning of the tax rates with the rates that are implied in the other European Union countries. On the contrary, he put a stress that he plans to preserve the low taxation in Bulgaria. The stable politics that concern the taxes in Bulgaria and the new changes to the better that are expected in year 2013 are great news for the companies that are still hesitating whether to open offices in Sofia and other cities in Bulgaria.

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Getting the right office in Sofia

Mina Boycheva 10/01/2013

Once you have registered your company in Bulgaria and you are planning to open your own office in Sofia, you will face the challenge to get the right one for your needs. You can run a foreign company, an outsourcing company or another type of company, but definitely you will need a good office. The small companies and businesses, which do not know the Bulgarian market well, will most probably be afraid to proceed and open an office in Sofia straight away. Most probably they will start with securing a virtual office before they open an office in Sofia or another major city in the country. The services of the virtual offices are perfect for the aim of the small foreign companies to get an idea about the market, the current business situation, to arrange some meetings, even to make interviews with future employees. This is a great option for these companies that allows them to be flexible, to know the market and morals and ultimately to decide whether to step on the market or not.

The small companies and businesses, which do not know the Bulgarian market well, will most probably be afraid to proceed and open an office in Sofia straight away. Most probably they will start with securing a virtual office before they open an office in Sofia or another major city in the country.

Those companies that have already done their research and have decided to be presented on the Bulgarian market are trying to rent offices. The location and type of the offices are usually directly related to the activity of the newly registered company. These could be a large office of the “open space” type, set in a modern business building in the business zone of Sofia, but it can also be a representative office in the center. The options are varied according to the demand and the business needs. In the capital Sofia, there are many and varied options for renting an office or buying an office. The office rental prices are stable and significant changes are not expected. The managers of registered companies are able to choose between offices in the center of the capital along “Vitosha” Blvd., “Dondukov” Blvd. and “G.S. Rakovski” Street, next to all administrative and government buildings, as well as a number of bank offices. The offices in the center and those in the top neighborhood “Lozenets” are usually scattered in different buildings or gathered in several major business centers. The second most logical option to rent an office in the Business Park, which is located in the “Mladost” District next to the ring road. There are focused most of the offices of the large corporations in Bulgaria.

In the capital Sofia, there are many and varied options for renting an office or buying an office. The office rental prices are stable and significant changes are not expected.

Besides these major office locations in the capital were built many other business complexes along “Bulgaria” Blvd. and “Tsarigradsko Schousse” Blvd. near the big shopping center “The Mall”. In general, during the last years, the demand of the new companies in Bulgaria is for first-class offices with parking and other amenities. There are many companies that are already established on the Bulgarian market, which also looking for new offices. They are usually from branches which are not so much affected by the crisis, namely telecommunications and information technology, insurance and financial services sector, energy, pharmaceuticals, service centers and call centers. These companies come from office buildings with lower quality and level of service, and a worse location that the options available now.

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Sofia offices: good location and many facilities

Mina Boycheva 08/01/2013

You have already registered a company in Bulgaria and plan to start making business in Sofia before you expand and head towards the rest of the big cities in the country. However, finding the right office might not always be an easy task. It turns out however, that despite the crises, many new offices in Sofia are completed and opening soon with almost 80 or 90 per cent of them being already rented. In other words, despite the bad news and the financial situations, the office market in Sofia is doing just fine. This is so, as there are plenty of international companies registered in Bulgaria, which are looking for prestige office address. These companies are looking for the right infrastructure, but also for suitable atmosphere and for well-trained and highly motivated professionals.

Business class A buildings enjoy prime location and are about five in total in Sofia. The rental levels there vary from 11 to 15 Euro per sq.m.

The completed office buildings in Sofia, which are of the highest class are not that many, however. There are many offices of the lower class, but they do not meet the requirements of the big companies for one reason or another. Business class A buildings enjoy prime location and are about five in total in Sofia. The rental levels there vary from 11 to 15 Euro per sq.m. The rental levels of the buildings of the lower class are lower. Besides the location and the rental price, the companies are also interested in the monthly bills they are expected to pay for electricity, management and other costs. It is believed that the office environment is becoming quite important for the companies. That is why many companies express the desire to relocate, as they aim at improving the working conditions and to get a better business address. These companies are also looking for office buildings that have certain zones for extra activities of the employees like a fitness center, zones for socializing, etc. Managers are aware that they have to create a different working atmosphere and to encourage their employees to communicate more among each other and to work with pleasure.

The experts on the office market predict good future for the office sector in Sofia and the country in general. During the next year will be completed many quality office projects of class A, as well as new ones will be started.

According to the reports that cover the first half of year 2012, several of the big companies moved their headquarters to other office buildings. Among these financial institutions could be pointed out “Postbank”, “Alfa Bank” and ” Texim Bank”. During this period of the year have been completed around 80,000 sq.m of new and modern offices. According to the same reports, the offices with prestigious and convenient location in Sofia and high quality of the construction could be rented at 9 to 12 Euro per sq.m for the areas outside the city center and at 12 to 15 Euros per sq. m for the central part of the city. The experts on the office market predict good future for the office sector in Sofia and the country in general. During the next year will be completed many quality office projects of class A, as well as new ones will be started. They will wait for their new tenants – prosperous big companies that want to hire local professionals.

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The process of company tax management in Bulgaria

Mina Boycheva 06/01/2013

The process of tax planning and also tax management is quite complicated one and this is valid for Bulgaria as well. There are plenty of changes in the law on taxes and they have to be tracked down carefully by all people who decide to register a company in Bulgaria, pay company taxes here and operate one’s business. This is not easy, as with each new year that comes, the changes in the Bulgarian tax law are becoming more complex. The good point here is that in year 2013, there will be many positive changes as far as taxes are concerned. New directives will be adopted by the European Union, which will concern the process of invoicing. A new invoice will also be introduces, which will have less data and will simplify the accounting operations. In addition will be introduced the so called “Summary Invoice”, which will be issued once a month and will include several supplies made through that period. Certain changes to the better will also concern the online invoices. These changes in the tax system in Bulgaria will set the base for other changes to be made in the future, until the administration in Bulgaria and the tax system of the country make it quite attractive to the investors.

The process of tax planning and also tax management is quite complicated one and this is valid for Bulgaria as well. There are plenty of changes in the law on taxes and they have to be tracked down carefully by all people who decide to register a company in Bulgaria, pay company taxes here and operate one’s business.

All companies which are registered in Bulgaria and operate in the city of Sofia or other major cities in the country have to obey the Bulgarian Law, but also they have to keep up with the changes in the European Law, since Bulgaria is a member of the European Union. When taxes are concerned, we have tax management and tax planning, we have also tax forecasting, tax budgeting and VAT tax return, etc. As all managers of big companies know, just like the ones of the companies registered in Bulgaria, the process of tax management is really important part of the accounting of the company and its financial activity, its investments and profit. That is why it is quite a complicated process. The tax accounting services include tax documentation and tax rate modeling, tax account analysis and tax assistance, as well as income tax forecasting. Other useful services include tax compliance, which includes analysis of data, filling of documents and evaluation of the tax returns. Tax management for companies that are registered in Bulgaria could also include tax planning, where the aim is to reduce the tax liability, to control the risk from tax credits and increase the cash flow. Registered companies can also use the VAT tax services, which include VAT tax documentation preparation, VAT tax return and VAT bookkeeping. If they own a property like an office for example, or a car, companies should also have information on the immovable and movable property taxation. There are taxes on buying and selling of properties, there are local property taxes, etc. The good accounting offices can help the outsourcing and other companies in Bulgaria to use all credits and deductions available in order to minimize the tax liability that is due. Besides taxes, companies registered in Bulgaria should also pay national insurance that depends on the status of the people the company employs.

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