30.06.2022

SOCIAL SECURITY FOR SOLE PROPRIETOR (SP)

A sole trader, also called a sole proprietor, is a physically capable person who represents his business. This is also the reason why many sole traders use their own names as the company name.

What happens to social security when a sole trader suspends his activity and what should he do to stop his insurance?

Sole proprietors are compulsorily insured for invalidity due to general illness, old age and death for the time during which they exercise in this capacity.

The principle of insurance only for the periods during which employment is exercised is laid down in the Social Security Code, on the basis of which insurance arises from the day on which persons start employment and for which insurance contributions have been paid or are due, and continues until the cessation of this activity.

If the trader intends to temporarily suspend his activity and in connection with the above the grounds for payment of social security contributions shall cease to exist.

According to the law, upon commencement, interruption, resumption or termination of any employment, the self-employed person submits a declaration in an approved form by the Executive Director of the National Revenue Agency (NRA) to the competent territorial directorate of the NRA, signed by the self-employed person. day term from the occurrence of the circumstance.

In order to declare an interruption of his insurance, the sole trader must submit to the competent territorial directorate of the NRA a completed Declaration for registration of a self-insured person. That declaration shall state the date on which it ceases to operate.

The interruption of the insurance by the self-insured person of a sole trader also interrupts his insurance length of service.

When resuming his activity, the sole trader should also state the date on which he starts working. This is done again with the submission of a Declaration for registration of a self-insured person. It is important to note that if the insurance is resumed in the same calendar year, the trader cannot change the type of insurance and must pay insurance contributions for the social risks selected before the interruption. Social security contributions are also paid for the same risks when the activity is resumed in the next calendar year, if this has not been declared within the respective term.

Change of the selected social risks can be done only in the period from 01.01. to 31.01. of each calendar year.

Reference:

Art. 1, para. 2 of the Ordinance on the social security of self-insured persons, Bulgarian citizens working abroad and seafarers.

Art. 4, para. 3, item 2 of the Social Security Code

Art. 10 SSC