Assess interest only on term deposits

Tax on interest on deposits will only apply to contracts concluded after 1 January 2013. Only deposits with an agreed interest rate will be assessed. Tax will be paid on deposits in banks in the EU, as well.

"Interest that will be assessed with tax will be only for those who have a contract with the bank for a certain period, for a certain amount that is blocked for this period and for a specific interest rate which has to be received for the time. This is the exact definition of the deposit only those accounts will be taxed, "declared the head of the budget committee in parliament Menda Stoyanova .

The government in the Parliament is convinced that tax rates should be implemented despite the strong reaction of the society and the opposition. According to the Finance Minister Simeon Diankov this is not a new tax, but enlarging the tax base of existing flat tax, which was led by the previous government.

"We are the only country in the EU without tax rates. All the other 26 EU countries have tax rates," said minister Diankov. According to him, this is because the tax laws must be fair in taxation on labor and capital. According to him in Bulgaria working people are taxed on all work types.

"There are some exceptions in the capital however. If you are rentier if you keep money in a bank, they work for you, make more money, it is not taxed. This has two problems - the first is social justice, " Diankov explained. "If you have deposit of 1,000 lev, the tax is not on deposit, but on the interest rates on the deposit. That means that you will pay 0.30 leva per month or about 4 leva per year. The tax is quite low for these levels," said the Finance Minister.

He explained that at this moment it is impossible setting a lower threshold for the tax payment. He said the tax will effect from 1 January 2013, so those who now have savings are not affected.

The Minister also stressed that the tax can not be avoided if the money are invested in foreign banks. "Bulgaria has agreements for double taxation with almost all the countries, so taxes on deposits will be paid from our citizens in Switzerland, England, Germany and others.

"It is needless to dramatize the issue of tax on interest on deposits, which is actually removal of an unjust preference in our financial system," commented Deputy Finance Minister Vladislav Goranov. He believes that the concerns of some people, especially the wealthy associated, with this tax are caused by levels of bank keeping the bank secrecy. "Some of them can not explain the origin of the money they have deposited in the bank. I want to reassure them that the information on deposits will not pass through the National Revenue Agency," said Goranov. The budget for next year is planning around 600 million lev for pension costs, money for education, health and culture.