The Bulgarian government adopted more clear rules for the taxation on the private use of company equipment by employees. Employers commonly provide equipment for their employees to use for business purposes (such as cars, mobile phones, and notebooks) and, from time to time, employees use the equipment for private use – triggering additional tax liability. According to a new regulation, promulgated in the State Gazette in April 2017, if the employer pays the annual 10% income tax on the private use, employees will owe no additional social security contributions or income tax related to the private use.
The obligation for social security contributions on the private use of company equipment was previously unclear. The new rules will decrease staff expenses for companies and documentation burdens for tax authorities.
The new treatment entered into force on 7 April 2017 and companies can apply it with immediate effect for the next taxation periods.
We will keep you updated on any developments in this regard. Should you need further information, please do not hesitate to contact us.