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As of January 1, 2021, several important changes in the taxation of personal income take effect. Tax lawyers caution that, with few exceptions, they will not apply to income earned in 2020.
From the beginning of the new year, merchants who are not required to issue a tax receipt must issue a paid income document. It must be in duplicate, one given to the income payer and the other kept by the individual.
A new tax relief will be available starting next year. Anyone who has done a home renovation can reduce the total annual tax base on labor payments made during the year by up to 2,000 BGN. However, the conditions are that the property is located in Bulgaria, the renovation is carried out by Bulgarian craftsmen or an EU company, to have Documents for the amounts paid. And the person who wants the tax relief must be the owner as an individual, not as a business.
To recognize the tax refund, the tax authorities will also check if the owner and teachers are not related parties. If the property is jointly owned, both or more joint owners can enjoy relief, but their total amount must not exceed BGN 2,000.
As of January 1, some changes in the deadlines for filing taxes come into effect. Sole proprietors and farmers must report and pay their income tax between March 1 and June 30 of the following year. The deadline for filing an annual return and paying taxes for non-merchants remains April 30.
The deadlines for submitting an annual tax return electronically, with a 5% discount on the additional tax, do not change, until March 31 of the following year. The amount of the discount is the same, up to BGN 500.
The increase in the amount of tax allowance for children in 2021 is as follows: BGN 4,500 for one child (instead of BGN 200), BGN 9,000 for two children (instead of BGN 400), BGN 13,500 for three and more children (instead of BGN 600) and BGN 9,000 for children with disabilities (instead of BGN 2,000). These amounts are deducted from the annual tax base and therefore the tax for parents caring for the children is reduced. The bonus will be valid when filing the annual income statement in 2022 by 2021. If the income of one of the parents is less than the amount of the discount, the aid will be distributed between the income of both parents.
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