Tax Alert – Changes to Social Security _2013 (EN)
- Changes in the Social Security Legislation
(i) changes in the social security and health insurance contributions payment deadlines
As of 01.01.2013 the deadlines for payment of social security and health insurance contributions have been extended, as follows:
- As regards employees, directors, proxies, members of the management bodies of companies – by 25-th of the month following the month when the work has been carried out. If, after this deadline, the persons are paid an additional piece of income (e.g. a bonus), the social security and health insurance contributions on that additional income would be payable by the 25-th of the month following the month when the income was accrued or paid (i.e. if an employee receives a bonus for January until 25-th February, the contributions on the bonus shall be payable by 25-th February. However, if the bonus is paid after 25-th February, the contributions would be due by 25-th March).
- As regards self-employed persons – by 25-th of the month following the month for which the contributions are due.
- As regards persons working without an employment contract (e.g. persons hired under civil contracts) – by 25-th of the month following the month when the remuneration was paid.
The contributions for the state social security and the health insurance contributions would no longer be paid to separate bank accounts but would instead be payable under the so called “single payment order” using the single payment code for all public liabilities. Only the contributions for the additional mandatory pensions fund would need to be paid to a separate bank account and using a different payment code.
(ii) changes in the deadlines for submitting documents concerning payment of benefits
The deadlines for submitting documents related to the payment of various benefits (sickness benefits, maternity benefits) have been also extended.
From 2013 the insurers would need to submit the relevant documents in the competent regional office of the National Social Security Institute by 15-th of the month following the month when the insured person provided those documents to the insurer (until now the time limit was two working days following the payment of the salaries for the respective month).
The self-employed persons, on the other hand, need to submit the necessary documents to the National Social Security Institute by 15-th of the month following the month when the documents for the benefit payment was issued or from which the benefit is claimed (until now the time limit was 11 days following the payment of the social security contributions for the respective month).
(iii) permanent introduction of the employer’s obligation to pay the first three days of the sickness leave
As of 2013 the distribution of the sickness benefits between the insurer and the State, which was initially introduced as a temporary measure, becomes permanent. Therefore, the employer would continue to pay the employee 70% of his average daily gross remuneration for the month of the sickness for the first 3 days of the sickness leave.
(iv) reduction of the default interest rate on delayed social security payments
The rate of the default interest on delayed social security contributions has been reduced and currently it has reached the same level as the default interest on tax liabilities, namely 10 points above the basic interest rate.
(v) paternity benefits for self-employed fathers
The self-employed fathers who are insured for general sickness and maternity risk would be entitled to paternity benefits for child birth for a 15-day term and to benefits for the period between the 6-month age of the child and the remainder until 410 days of the maternity leave provided they have been insured for that risk for at least 12 months.
This Tax Alert has been prepared by DELCHEV & PARTNERS for information purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.