2024-04-06 22:52:13
Changes are foreseen in the agreement to avoid double taxation – Bulgarians working in Germany will pay tax here.
In the changes that are expected to enter into force next year, there will be a group of Bulgarians who will be harmed. The reason is simple – Bulgaria, unlike Germany, does not provide for a certain income limit, which is not subject to tax.
Nadia Kluge is a lawyer and consultant in the non-governmental organization “Just Mobility”. She has built 11 centers where she helps our compatriots in Germany with legal advice.
“As a consultant in a center for labor legal issues, I can say what will happen to the workers, who are mostly seasonal workers. For the simple reason that persons employed in Germany with an employment contract are fully subject to the tax and social law of the German country when their permanent residence is Germany. For seasonal workers, the permanent place of residence is not Germany, but Bulgaria,” says lawyer and consultant in “Fair Mobility” Nadia Kluge.
According to her, the workers return to Bulgaria for a short period, and the rest of the time they work in Germany.
As with all other groups, the agreement for avoiding double taxation between Germany and Bulgaria applies to seasonal workers. In the event of a change, a change in the tax calculation method will also be observed.
“Until now, seasonal workers paid tax in Germany only when their income exceeded the free limit. This means that they did not pay tax in Bulgaria at all,” she adds.
For 2024, the free limit is 11,604 euros. If until now Bulgarian seasonal workers earned less than this amount for several months of work in Germany and did not pay tax in either country – now this is changing.
“With the new change, even if they make less than 11,604 euros, the amount is included in the tax base. It is taken into account when calculating the taxes due in Bulgaria. I, for example, worked for three months in Germany and earned 6,000 or 8,000 euros. At the same time, I also worked in Bulgaria and have an income of BGN 20,000. In order to calculate the taxes due in Bulgaria, the amount I received as a salary in Germany is added up, plus the amount I received as a salary in Bulgaria. And this total amount with a 10% tax benefit in Bulgaria,” adds Kluge.
There is another feature that seasonal workers should keep in mind from next year. At the moment when the employment contract ends and they return to Bulgaria, it is necessary to take a document from the employer in Germany for the remuneration received and taxes paid. Because the Bulgarian and German tax systems exchange information in the meantime. There is also the obligation for seasonal workers to submit a tax return in Bulgaria.
Nadia Kluge is also aware of the benefits received in our country by some Bulgarians who worked abroad for a short time. Issued by the National Insurance Institute, they can reach up to BGN 1,800 and a term of up to 12 months.
“This is not a scheme, it is a legal rule. This also applies to seasonal workers. When employees work in two EU countries, they worked in Bulgaria for a certain period of time, and then they work as seasonal workers, but for a shorter period of time abroad – they remain and are subject to the Bulgarian social legislation, the Bulgarian legal norm”
She explained that, in this way, workers receive unemployment benefits under Bulgarian law regardless of the fact that they have worked for a period of time abroad, NOVA reported.
“However, it is necessary that they have worked in Bulgaria for a longer period of time. This legal scheme can be done mainly by seasonal workers, because their usual place of residence remains in Bulgaria,” Kruge also said.
According to her, the problem for the Bulgarian state lies in the difference in the amount of the minimum wage. “These people usually receive a minimum wage, but it is currently 13.41 euros per hour in Germany, which is significantly more than the Bulgarian wage. By working in this method as seasonal workers, Bulgaria is obliged to pay cash unemployment benefits based on this high salary. Despite the fact that previously relatively low social insurances were paid, which is at the expense of the budget and the treasury,” Kruge added.