Online consultant in a Swiss company
Online consultant in a Swiss company
Question:
Hello!
If I work as an online chat consultant for a company based in Switzerland and I am self-employed, do I have to pay taxes and if so what is the procedure? What part of the salary should be paid in the form of tax?
Is it difficult to register as a freelancer, can I do it myself?
And how is the deregistration of a self-insured person, Bulstat and freelancer?
If I earn BGN 400 from the given company and do not manage to earn money that is at least as much as the minimum wage, does the amount I have to pay for insurance change?
Thanks in advance!
Answer:
Hello,
Any income received by you is subject to taxation. Naturally, there are some exceptions, but the income received from hard work or from an occupation does not fall into the exceptions.
You have several choices - to register as a self-employed person, to register a company (EOOD) in your name or not to register at all.
From a tax point of view, things look like this:
- in the case of self-employment, you declare the amount of income for the year. From the amount received in this way, you deduct 25% of legally recognized expenses and the insurances paid during the year, and you owe 10% tax on the amount received in this way.
- with an EOOD, you declare the amount of income and expenses related to your activity. If the income is more than the expenses, then you make a profit and this profit is taxed at 10%.
From an insurance point of view, the situation is as follows:
- if you are self-employed, you are insured monthly, and accordingly you must declare and pay insurance every month, and the minimum insurance income is currently BGN 710.00, which means minimum insurances of about BGN 200.00 per month. At the end of the year when an annual tax return is submitted, an adjustment is made. In this equalization, the realized income during the year is considered. If its amount exceeds the amount on which you were insured, you must add insurance on the difference. The amount on which insurance is paid on an annual basis cannot be higher than BGN 40,800.00 for 2022.
- with EOOD, the insurance contributions are paid again on the minimum insurance income for the year - BGN 710.00, the difference being that there is no annual equalization of the insurance contributions.
I.e. purely from a tax and insurance point of view, you will need to assess and make some kind of plan - what income you expect to receive and what expenses you would have. Only in this way would you be able to determine which form of activity is economically more profitable (ie you would pay less tax and insurance).
Apart from the differences from a tax and insurance point of view, there are also several purely functional differences:
- in order to register as a person exercising a free profession, it is mandatory to provide a diploma or some other certificate, which certifies your competence to provide the services you will perform, along with the set of documents (application and declaration). In our opinion, the procedure is not complicated - fill out an application and declaration according to a template and attach a copy of an identity card and a diploma/certificate.
The registration itself is carried out by the Bulstat Register within 24 hours, and there is also a state fee of BGN 10.00.
- the money you earn as a freelancer is actually your money and you can "spend" it whenever and on whatever you want. With an EOOD, the money the company makes stays with the company. If you want, as the owner, to have this money available, there are several options - to give yourself a salary, to give yourself a loan, or after the financial year is over and the company, if it has made a profit, you will be able to distribute the profit as dividend (but you will have to pay an additional 5% dividend tax on this amount).
- if you exercise your activity as a freelancer, you will not have the obligation to issue a receipt when receiving cash. For an EOOD, this exemption does not apply and if you receive cash, you will need to have a cash register previously purchased from which to issue cash receipts.
Keep in mind that registration as a self-employed person entails the following commitments to the NRA:
- when starting an activity, you must submit a declaration to the NRA for starting an activity and for starting insurance
- for the months in which you carried out activity and were covered by insurance, you must submit declarations to the National Revenue Agency for the due insurance contributions
- every three months you must submit a declaration for advance tax due (actually 10% tax for the first three quarters of the calendar year, is due in advance, and for each quarter the amount of tax is declared and paid accordingly)
- after the calendar year has ended, you must submit an annual tax return in which you balance the tax due with the tax paid in advance, as well as balance the insurances with the insurances paid in advance during the year.
"Deregistration" of a self-heating person is done by submitting a declaration to the National Revenue Agency for suspension of activity and insurance.
- To register an EOOD, the procedure is a little longer and more complicated. To begin with, a set of documents is prepared (constitutional act, minutes of the founding meeting, management contract, several declarations and a sample signature). Some of the documents are notarized. After that, you need to find a fundraising account in a bank of your choice, to which you can deposit the initial capital. The minimum is BGN 2.00. The import note for the paid-in capital, together with the other prepared documents, is submitted to the Commercial Register, no later than 7 calendar days from the date of the founding act, and the registration takes place within 7 working days . The state fee is 110.00 BGN. The notary fee is 6.00 BGN, and the bank fee depends on the bank you choose, it varies from 10.00 - 60.00 BGN.
And with a low income, you again pay insurances calculated on the minimum insurance income. The 10% tax is also due regardless of the amount of income.
If you do not make any registration, the law equates you to a Sole Trader (ET) and accordingly taxes you as an ET would. The tax due at the end of the year is 15% on the realized profit, insurances calculated on the basis of the minimum insurance income are paid again and at the end of the year an annual equalization is made (analogous as in the case of self-employment), adding insurances up to the amount of the realized profit. We hope we have been helpful!
Greetings!
