Freelancers or register of office. Render an account costs

Freelancers or register of office. Render an account costs

   

 

   

Question:

I have read that the first consultation is free of charge in your office, but unfortunately I do not have the physical opportunity to come. I will ask my questions online, and I hope you will answer. It is a freelance profession / private enforcement agent.
1. Are the wage and social security costs of employees recognized as an expense, ie. do they enter the recognized 25% who are recognized for the profession?
2. Is the VAT due on invoices made for sales of services decreasing by the VAT which we have paid on different invoices from suppliers? Does the VAT due as a difference between the two amounts?
3. Is VAT on all invoices recognized as a reduction in the tax due? In particular, do you accept invoices for min. Water, coffee and more? office, footwear and so on. of the staff?
4. What statements are filled in monthly?
5. Is the insurance recognized (in this case not obligatory but voluntary / for a monthly expense and with what document is it certified - only a payment order or must the insurance policy)?
6. Is the membership fee recognized after having no invoice issued?

 

Answer:

Hello,

If you have decided that you will do this as a freelance practitioner, forget about what costs you will be recognized - you have 25% of the amount of all your earnings as recognized costs without having to submit any cost documents , no matter how much the costs themselves are. If you think that your costs will actually exceed by more than 25% of your earnings - then change the form for doing business and register EOOD. Then any documented cost related to the activity performed will be recognized and will reduce the taxable amount.

In the invoices you issue, you will only charge VAT if you have a VAT registration. The mandatory registration is in the case of exceeding the taxable turnover for the last 12 months of the amount of BGN 50 thousand. You are also subject to mandatory registration if you provide services to legal entities registered within the European Union with a place of performance in the European Union.

If you have an VAT registration, then you owe VAT to all taxable supplies you make (be it services or goods). Then you are entitled to a tax credit for paid VAT on invoices from your suppliers. Monthly, purchase logs, sales logs, and VAT returns are filed, reflecting the tax due, the tax credit you are entitled to deduct, and the tax you have to pay.

In principle, you are entitled to a tax credit for those invoices in which the goods, materials and services received are used to make taxable supplies. Invoices for mining water and coffee will only be recognized as a tax credit if you have a coin-operated coffee machine and coin-operated water cooler (they have built-in "cash registers") and count revenue from them (these revenues are subject to VAT) . If they are used free of charge at the office, then they are non-taxable and can not deduct the VAT paid on the purchase. If shoes and clothes are purchased as work or uniform clothing of staff, then you are entitled to a tax credit.

Monthly statements are filled in and filed under the VAT and the insurance declarations (figures 1 and 6)

It depends on what insurance is and what is the cost of the insurance premium. All insurances related to the performed activity are recognized as an expense. Personal insurance of up to BGN 60 per month (only if provided to each of the staff as a social expense) is recognized as tax expense.

But the payment order is a document proving payment by settlement. Paying as such is not a document proving an expense, such as an invoice, a policy.

As I said above, something that is documented has been recognized as an expense - if the company is to pay membership fees to a branch organization, then by virtue of the statutes of that organization and your company's membership in that organization, the document on the paid membership fee will be recognized as an inherent cost.

Once again, I want to turn your attention - all the things to prove costs are true if you choose to act as a PEA not as a free profession but through a company.

I hope we've been useful to you.

Greetings.