12.10.2012

"The tax legislation must be fair in respect of labor and capital taxation and there will be tax on interest earnings", Deputy Prime Minister and Minister of Finance said in the New Television morning program. The tax on interest earnings is not a new tax. This is broadening of the tax base of the flat rate tax which will now cover also people with more cash, he explained. Bulgaria is joining the European banking system and this tax will be paid everywhere, no matter in which state the deposit is made. The Finance Minister specified that a text was drafted according to which the tax could not be avoided in another state because of existing bilateral conventions. The other 26 EU Member States all have tax on interest earnings.

Minister Djankov explained that at the moment the banking system in Bulgaria was excessively liquid and that he was certain that interest earnings taxation would not shake it. This means that the BNB has managed to achieve the highest financial system stability in the EU and people continue to save even in difficult economic times, the Deputy Prime Minister added. The system can be improved but that already means to reconsider the bank capitalism in Europe and globally, he commented.