Bulgaria introduces new temporary obligation for solidarity contribution

Changes regarding the food vouchers were adopted in the Corporate Income Tax (CIT) Act at the end of 2022. 

The new provisions are promulgated through the Act for Implementation of Provisions of the State Budget of the Republic of Bulgaria for 2022[1] and include the following expected changes:

• The non-taxable amount of food vouchers for one person on a monthly basis, which was introduced as a temporary measure in 2022, is extended up to three months. An amendment in CIT Act will adopt this threshold with the entry into force of the State Budget Act of Republic of Bulgaria for 2023, however such Act is not yet introduced. Thus, for a certain period, the applicable threshold may turn out to be the previous one (80 BGN / month).
• In the same manner (until the adoption of the State Budget Act of Republic of Bulgaria for 2023, but no longer than three months) the possibility for using the food vouchers for food and payment for electricity and heat used for household needs, gas and water, for activities carried out by cultural organizations under the Protection and Promotion of Culture Act, as well to the screening of films under the Film Industry Act and for tourist services under the Tourism Act, remains.
  

The food vouchers are convenient incentive tool from both the employee and employer perspective. The temporary nature of the extension, as well as the uncertainty regarding the entry into force of a new budget, could, however, create tax risks, which requires monitoring of developments as well as planning.

We will notify you further of any subsequent changes.

[1] Act for Implementation of provisions of the State Budget Act of Republic of Bulgaria for 2022, Public Social Insurance Budget Act for 2022 and the National Health Insurance Fund Budget Act for 2022.