Continuing from New Tax Rates in Greece As From The Beginning of 2013 – Part I

The law decreases the number of tax categories from eight to three and imposes 42% rate of the incomes over 42 thousand Euro annually. Up to now incomes over 60 thousand euro annually were taxed with 40%, incomes over 100 thousand euro – with 45%. Employees and pensioners, who earn up to 25 thousand euro, will be taxed with 22%, these one between 25 and 42 thousand euro – with 32%. The tax Reform removes some tax exceptions and alleviation, but it provides tax credit from 2100 euro for incomes under 21 thousand euro annually.
Compared to Greece, Bulgaria has become a strategic tax optimization center in times of worldwide recession. The tax environment, rates and multiple incentives contribute greatly to international businesses of all kind to effectively and legally reduce their tax burden and respectively it empowers them to generate greater profit and improve their financial situation. The corporate income tax in Bulgaria is at the flat rate of 10% of the net income for the respective year /annual basis/. For a comparison the corporate tax burden in the rest of the European member states is dramatically heavier – in the UK it varies between 21-28%, in the Netherlands – 25%, in Italy – 31.4%, in Germany – varies between 14% and 17.5% etc.
Basically it can be generalized that there is no lower rate level of corporate tax within the EU than the one in Bulgaria which contrasts heavily with the average European rates starting at 15% and ending at a rate of 36%! Moreover there is a possibility of 100% off this tax in case the business is situated in a region of high level of unemployment.
In addition to the corporate tax, the personal income tax is also at the flat rate of 10% and also an important fact for employers is that the maximum monthly taxable base for the personal income tax is at the amount of 2200 BGN.
Regarding the dividend tax it is at the rate of 0% when dividend is being distributed between EU member residents.