Bulgaria Parliament Mulls 2% Tax on Insurance Premiums

Bulgaria Parliament Mulls 2% Tax on Insurance Premiums

Bulgaria's parliament will debate on Wednesday a bill, which provides for the introduction of a 2% tax on insurance premiums and was moved by the government earlier this year in a bid to boost revenues to the budget.

The parliamentary economic commission approved in the middle of June the bill, which is scheduled to come into effect on September 1 and is expected to hike insurance policies prices by at least 2%.

Members of the right and left-wing opposition have slammed the proposal, saying that the poor collection of revenues should not be a reason for the introduction of a new tax, which does not guarantee the flow of more revenues into the budget and will burden the clients, not the business.

The newly proposed tax on insurance policies will not alter the existing legal arrangements with respect to the taxing of the profit of the insurers.

The 2% will be paid on collected premiums, while life insurance policies and cargo insurance policies are exempt from it, when the starting and final point are outside Bulgaria. In the case of deferred payments, the tax will be paid only on sums that have already been collected. The companies will not owe a tax on premiums that they have reinsured.

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