Carrying out of activity by an individual - taxes

Carrying out of activity by an individual - taxes

 

 

Question:

Hello.
I started working as a freelancer at Upwork earlier this year. I didn't know there were automatic payments and I didn't need the money urgently. I decided to just accumulate funds there and at the right time to withdraw them. But they sent me a bank transfer because the date came. At that, I worried and consulted with a known accountant and they told me that it would be no problem at all to write them down in my annual tax return and pay them when I pay my car, apartment and so on.
In this situation, I calmed down and then received 2 more translations.
As the end of the year was approaching, I decided to study the matter and came across a great variety of information, ranging from being able to declare because it was not a super large amount and would not pay attention, and from the new year to register for free profession or make a company. As a reason, they gave me an example with the fact that when I came from a brigade in the states I transferred over 15 thousand BGN and I did not declare and there was no problem. However, I do not trust because I was paying taxes in the United States and out of the country at the time. The other extreme is that I will necessarily pay a big fine since I didn't register before I started working.

Now I wonder how to proceed with the funds already received.

Thank you in advance for the information!

 

Answer:

Hello,

According to the Bulgarian legislation, if you receive income, you owe tax. Failure to declare income and, accordingly, failure to pay the tax due would result in fines.

Ideally, things in your case should generally sit like this. Register as a freelancer (a so-called freelancer). You begin insurance as a self-insured person, as a result of which the required social security contributions are declared and paid every month. By April 30, a personal income statement for the previous year is filed, declaring the income received during the previous year, deducting expenses (in your case 25%) and paying the amount of 10% income tax. The same declaration also makes an annual reconciliation of the declared and paid insurance, calculating the basis on which the insurance was paid during the year, comparing it with the actual income received, and if necessary, supplementing the difference.

Since you have already earned income for an activity that you are pursuing but have not registered as a freelancer, things are a little different. The NRAs allow you to declare your income by discounting, on the one hand, that you will not be fined for not registering as a "freelancer", but on the other hand, will not give you the 25% statutory relief costs. You will also have to pay 15% income tax and have to pay the insurance on the basis of the income received during the year of purchase (up to the amount of the maximum insurance threshold for that year). We would not advise you not to declare your income and therefore not pay taxes and insurance, because in the determination of these circumstances by the NRA, this will, on the one hand, lead to the payment of the debt, together with statutory interest, and the payment of additional sanctions. . Yes, there is also an option where the NRA does not find that you have not declared income, but our practice shows that these cases are getting smaller and smaller due to the fact that the NRA authorities are making more comprehensive checks , both to the individuals themselves and to the "channels" most commonly caught by unregulated trading activities. We will not be surprised if they also receive relevant information from Upwork on the persons registered by Bulgaria, as well as those from major sites such as Facebook, Amazon and others.

We hope we have been helpful.

Greetings!