by Ulrika Lomas, Tax-News.com, Brussels
04 December 2012
Bulgaria's Minister of Finance Simeon Djankov has suggested that the country's low flat tax rate will need to be maintained for the next ten to fifteen years.Djankov, who is also Deputy Prime Minister, made the comment in an online statement. He repeated his opposition to tax harmonization with other European states, and explained that the low tax rate was needed so that Bulgaria could "catch up."
Bulgaria's 10% flat rate tax policy was introduced in 2007 and applies to both personal and corporate income. Alongside Cyprus's 10% rate of corporate tax, Bulgaria's income tax is the lowest in the EU.
The flat tax was broadened in October 2012 to include bank deposit income. At that time, Djankov ruled out the idea of deposits and savings being relocated abroad, arguing that most tax rates in the EU are significantly higher, and he reaffirmed the principle that "there should be an equal treatment of income, which is the idea behind the flat rate."
Defending the plans, Djankov said: "The taxation of deposit interest earnings is not a new type of taxation but an abolition of unjust preference."
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