Taxes, Belgium, Bulgaria

Forensi

Hi,

I live and work(IT) in Brussels for nearly 3 years and I'm planning to start running my own business(nothing unusual so far). What i'm concerned about is the "tax massacre" that is held in Belgium. Saving from taxes nowadays is an efficient way of cutting expenses so I began a research on tax situation over Europe.

After 3 sleepless nights of endless clicking, I come up with the idea that Bulgaria's tax legal framework is really welcoming one for foreign business enterprises. Therefore, I intend to have my business in Belgium but pay taxes in Bulgaria as a local entity.

Do you evaluate the idea as reasonable?
And is there anybody who's done or is currently doing something similar?
I'm waiting for feedback.

Sarah_1

Hi There,

my name is Sarah and I opened small business in Belgium 1 year ago. I was also pretty confused with the high rate taxes in Belgium, so i decided to transfer administratively my business in a country with low corporate profit taxes. For EU these were Cypress and Bulgaria. I choose Bulgaria as the accounting expenses are cheaper than in Cypress. I got in touch with Bulgarico (bulgarico.com) and they did all the details for me. Last year i paid pretty much half of the taxes i used to pay before, so for me it worked and hopefully will work the same way.

What i understood is that Bulgarian government is not raising the taxes for the next 5 years, so that is a pretty good forecast for the moment.

If you have any questions please go ahead and ask me

My choice was pretty successful i suggest you do the same thing.
:j
Best,

Sarah

Forensi

Hi Sarah,

I wish to clarify certain details. Is company registration in Bulgaria a time consuming process? What time exactly does it take? Should I open a bank account in advance or Bulgarian bank is required?

Well that's all so far.

Best

ruslana

Hi,
I would like to join your discussion. I want to open my company in a country with low taxes. I made my own research and find out that Cyprus meets my requirements, but I also read that Bulgaria is cheaper. Can you tell me more about the taxes in Bulgaria, please?

BillTrac

Well b****r off to Bulgaria then and leave us poor sods in the uk alone....

or at least learn to write/speak in UK English

chrismac1

Taxes are lower there, but there are lots of pitfalls. It's still largely based on the Soviet system, but with an overlay of anti-moneylandering because 10 or so years back it was Godfather territory.

I set up a consortium there in 2003 to run a £10m project. You should get good local legal advice, and someone who can translate from bulgarian - Cyrillic text - into English.

You'll have a Permanent Establishment there and will need to tell the authorities. From 03 to 06 when my project ended, there was a requirement to run 2 separate bank accounts just for VAT. There were a lot of differences between Buglarian company and tax law and "Western style" tax law which applied to the UK and French members of the project consortium.

So I strongly recommend biting the bullet with good advice on the setup so you don't learn these differences the hard way!

Sarah_1

Hi, this is Sarah again,

@ Ruslana

As I mentioned above the idea with the tax savings in either Bulgaria or Cypress is quite a good one. Try talking to your lawyer and then call some of the local provider of these services (better be a reliable company, for instance you can try the ones, with whom I made business - bulgariCo)

@Chrismac 1 - I do not agree that the system is based on the soviet one - their tax policy is totally influenced by the EU one - not only that, but the BG government is obliged to follow the EU directives.

chrismac1

Sarah,

In how many other EU countries are you required to maintain 2 separate bank accounts purely for VAT?

I can only speak for the UK, France, Italy, Germany, Eire, Luxembourg, Czech Republic, Spain and Portugal - but it's not a requirement in any of those. However, things may have changed dramatically in the past 3 years when my direct involvement in Bulgaria ended.

Plus all our project staff there had to have Power of Attorneys and a certified Apostille provided by either the London or Paris Foreign Office depending on which country they came from - just in order to sign cheques. I don't remember any of that last time we ran contracts in the other countries mentioned above.

Sarah_1

Hi again,

the 2 separate bank accounts policy for VAT is no longer in existence. It used to be like that. Anyonenyou ask will confirm on that.

That is why i am saying that Bulgaria is now quite a good destination for this service

Forensi

Hi,

@Chrismac

In terms of VAT accounts, there is no such requirement since 2007. At least that's what I was told by my local advisors of Bulgarico. You need only one account. So it's high time to update your info Chris, the Soviet union falls apart long time ago. (just kiddin', no offense.);)

As to my business intentions in Bulgaria,yet I can't say anything in particular. The company registration process is on and I'm waiting. I'll share more when everything is complete.

Regards

chrismac1

That's good, forensi, because it was bloomin' hard making sure the right amounts were in the right accounts!