National Insurance Contributions in BG

We don't like them but we gotta pay them! How does it work in Bulgaria?

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MikeL
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National Insurance Contributions in BG

Postby MikeL » Sat Sep 29, 2007 8:02 pm

Ok I am bit slow but I have done extensive searches of the forum for information on National Insurnce and Healthcare and I am still a bit confused. If I move to Bulgaria full time and start an official business (i.e small hotel or large B&B) do I pay National Insurance, how is the NI contribution calculated and what does provide in terms of health cover?
Also if you run a business and do pay NI contributions do you still need private medical cover or a top up medical insurance policy?

Also not sure which Section of the forum this goes in, is it business or Health? Will try Health to start with.

I already recieve a full Military Pension and the Boss recieves a pension as well so we do not pay top up NI contributions to the UK.

Regards, Mike L

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Postby scot47 » Sat Sep 29, 2007 8:08 pm

In BG it is NOI. You pay this if you are in work or have an active company. Payment should entitle you to Health Treatment in Bulgaria. This is not always free. Some things are provided free, There is a charge for other items. Those who are 'economically inactive' can pay a monthly contribution. Those who get a State Retirement pension from another EU State can get free health treatment after proving their entitlement.

It is also possible to get private health treatment. Some people take out private health insurance in addition.

The system is different from the UK National Insurance system.

There are many posts on this and you will find them if you do a search. Try the 'Medical and Health' threads.

In all of these you may neeed guidance especially if your Bulgarian is not very good.
Last edited by scot47 on Sat May 24, 2008 7:15 pm, edited 1 time in total.

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Postby MikeL » Sat Sep 29, 2007 10:25 pm

Thanks Scott,

I have spent the evening searching and reading through the topis in the Health & Medical sections of the forum and unfortunatly I cannot find any information regarding how NOI payments are calculated. Neither can I find anything which actualy tates what is and what is not covered by NOI payments. The only statement I can find regarding NOI is “The annual costs of paying for your NOI are not very high at all.” Which does not really tell me anything as it is a subjective statement and depends on the writers opinion of “not very high”. What I am trying to find out is exactly how the NOI payments are calculated for a business or individual (or do both pay?), is it a percentage of income or profit or what?

My wife and I both receive pensions but we are not of retirement age and so would not be entitrled to an E121. We do have a French top up policy but this is only valid in France and only whist we pay into the French Farmers Health scheme. The second we sell the farm, all insurance and medical cover with them is finished.

What I am trying to do is to create a spreadsheet to calculate approximate annual expenditure we could expect and then access the viability of our business plan.

Also, is there anywhere that I can find out or can anyone advise what the NOI actualy covers (i.e what is free and what is not)?

Rgds, Mike L

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Postby Adolf » Sat Sep 29, 2007 11:39 pm

Hi, MikeL, this might help a bit. It is from the website of Studio Legale Sutti, who have quite a lot of interesting stuff about BG law on their site.
http://www.mondaq.com/article.asp?articleid=33899
There is a BG government site in English I found once which had quite a lot of the rules about NOI, including those for the self employed, but I doubt if I could find it again very easily. As you will see from this article (I have only copied certain bits) the percentages for employers/employees are not small at all. Fortunately there appears to be a ceiling. Most people seem to use an accountant. Hope this is of some use.


...............

2 Social Security and Health Insurance of Employees under Bulgarian Law

2.1 General Notes

Social security relations in Bulgaria are governed by the provisions of the Code on Social Security2 (hereinafter referred to as the "CSS").

The existence of an employment relationship creates an obligation of the employer to make social security payments to any or all of the following funds: (i) the State and Private Pension Security Funds; (ii) the Labour Accident and Occupational Disease Fund; (iii) the General Disease and Maternity Leave Fund; and (iv) the Unemployment Benefit Fund. In addition, under the CSS employees born after 31 December 1959 must also pay the socalled "additional obligatory social security contributions". It should be mentioned that the level of social security contributions is not affected by the nature of the labour duties, terms of payment of the remuneration or source of financing. Further, the Law on Health Security3 (hereinafter referred to as the "LHS") provides for an obligation for the employer to pay health security contributions for any and all of its employees.

The amounts due as social and health security contributions are determined as a percentage of the total "social security income" of the individual4.

2.2 Basic Social Security Contributions

The monthly social security contribution rate for employees working normal hours, i.e. eight hours a day, five days a week, is 36.7% of their gross monthly remuneration. Specific portions of this total contribution go to the different social security funds listed in 1.5(i). Currently, the payment levy for contributions to the State Pension Fund, the Private Pension Funds, the Maternity Leave and General Disease Fund and the Unemployment Benefit Fund is distributed between the employer and the employee: 75% is borne by the employer and 25% by the employee. The distribution of the payment levy will change gradually during the following years as follows: (i) in the year 2005 70% for the account of the employer and 30% for the account of the employee; (ii) in the year 2006 65% for the account of the employer and 35% for the account of the employee; (iii) in the year 2007 60% for the account of the employer and 40% for the account of the employee; (iv) in the year 2008 55% for the account of the employer and 45% for the account of the employee and (v) in the year 2009 it will be distributed evenly between the employer and employee, at a ratio of 50 to 50 percent. Contributions to the Labour Accident and Occupational Disease Fund are entirely for the account of the employer.

2.3 Additional Social Security Contributions

The obligatory additional social security was introduced with regard to all individuals born after 31 December 1959, provided that they are secured under the rules of state social security. This type of security is designed to procure the socalled "additional pension for retirement" for the aforementioned individuals.5

The payment levy is distributed between the employer and the employee in the same way as the one for basic social security contributions.

2.4 Health Insurance Contributions

Health insurance contributions are payable to the National Health Security Fund by all Bulgarian citizens who are not, at the same time, citizens of other countries, or who are also citizens of other countries but permanently reside on the territory of the Republic of Bulgaria.

The health security contributions amount to 6% of the employee's social security income. The levy for payment of health security contributions is distributed and will change in the same way as the one for social security contributions.

.........................

4 The total "social security income" of the individual comprises the gross monthly wage of the employee plus any and all other income from labour and other activities less certain items (such as transportation, daily and hotel expenses incurred in relation with business trips, etc.). In any event however, social and health security payments shall be calculated on the basis of a minimum amount of social and health security income as determined by the Law on the Budget of the State Social Security Fund, which varies depending on the economic activity performed by the employer and the position of the employee. Bulgarian law also introduces a maximum amount of the social and health security income, which for the year 2004 is fixed to BGN 1,200 (one thousand two hundred) per month. If the income exceeds the specified amount, no social security or health contributions are due for the excess.

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Postby Adolf » Sat Sep 29, 2007 11:49 pm

Try this. They've even got the European Regulations up there as well now.

http://www.nap.bg/ospage?id=535&lang=en

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national insurance payments

Postby goldfinger » Sun Sep 30, 2007 9:17 pm

There is no need to worry. You need an accountant who will pay your insurance for you. If your business is not trading you just have to pay about 60Bg levs which covers health etc. Accountants may charge you another 15 levs. You do this every month. There are articles on the internet about this.

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Postby MikeL » Mon Oct 01, 2007 7:05 am

Hi Adolf,

Thanks very much for both postings very useful and that is the type of information I am trying to get my hands on.

GoldFinger,

The problem is that until I can get accurate or even approximate figures of what sort of charges I am likely to incur in running a business in Bulgaria I am unlikely to make the move of setting one up. I would definetly use an accountant but again I would need to know what sort of charges that incures so it can go in the spreadsheet.

At the moment I do about 4 hours of research each day trying to get the information I need to compile my financial spreadsheet. If I am honest, there is actually very little information available which can be used to compile a detailed breakdown of what charges someone could expect to pay if you setup and run a business except for “not much, very little” etc, some people post certain figures but it is not clear if they are running a business or what the figures they pay are based on (i.e percentages). I think a lot of the postings on the forum have a tendency to assume that someone already knows the process and procedures and roughly how much they may have to pay. I certainly do not want to start a business on the basis of guessing annual business charges may be 5,000€ when they are really going to be 10,000€ (you get my gist).

So many people we know who have come to France and set up a business quickly go down the pan financialy simply because they did not know how the expenses (taxes, insurance, cottisations etc) that they would incur once the business was established.

Will keep searching. I do not give up easily.

Rgds, Mike L

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Postby Adolf » Mon Oct 01, 2007 2:13 pm

Hi, MikeL, on a slightly different aspect, I read once that there are some high unemployment areas of BG where the Corporation Tax rate is 0%, but I haven't been able to find out where they are. If you come across any info on that please let us know. Thanks.

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Postby mickw » Tue Apr 01, 2008 7:36 pm

Hope this may be of help to anyone seeking info on NOI contributions. Today my wife and I registered, in order to make contributions and avail ourselves of the Bulgarian Health Service.

We completed the procedure in the Yambol District so it may vary in other regions.

If there is interest I will post the procedure in detail.

Mick

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Postby DANNIA » Tue Apr 01, 2008 9:12 pm

Hi Mick
before this disappears it maybe an idea to put your experience down anyway as someone is bound to want it at some point.

I am interested to hear how you got on.

Nikki


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