15.03.2023
HOW TO REFRAIN FROM WITHDRAWING QUICK LOANS
How do some businesses profit from quick loans? Is there a disease called "quick loans" and how to cure it? Are the people to blame, are the excessively high interest rates to blame, are the laws to blame... Where is the root of the problem?
It is not the fault of the one who eats the pie, but the one who gives it to him. The credit market is a "very big pie" in our country, because literally billions are given out as loans. This segment of fast loans is growing at a very high speed, because more and more people prefer to take out a revolving credit quickly, where you do not have to prove your financial capabilities, respectively - to return it in the fastest way.
However, it often happens that people withdraw - withdraw, withdraw - withdraw, until some life event occurs, which suddenly interrupts this cycle, and this causes irreparable damage to the debtor as a result, because he becomes an eternal debtor. The moment you stop repaying, other lenders start offering you credit too, you start refinancing, you fall into a cycle where you take out a loan to repay your previous one... The price is too high.
Loan companies are legitimate. However, the extent to which the product they offer is legal is another question.
Unfortunately, the law is not well developed enough – changes were made to the Consumer Credit Act, which to some extent limited unlimited usury. Before that, there were quick loans that reached 200-300% in one year.
The law is imperfect and incomplete and allows for a number of circumventions. Therefore, it is the court that is currently writing the law, and probably thousands of decisions are issued every year, with which it is established that the debtor does not owe so much money to the creditor...
15.03.2023
ROMANIA STOLE THE PIE FROM US, THERE IS NO GOING BACK
The so-called "Dobrudzhanska banitsa" will be registered as a protected geographical product of Romania, not of Bulgaria, Digi 24 TV reports.
The steps for European recognition of this product started in 2017, and in May 2019 the dossier was sent to the European Commission in the electronic system "eAmbrosia". The application was published in the Official Journal of the EU in February 2021, with Bulgaria subsequently submitting a reasoned objection. In July 2021, the European Commission invites both parties to consultations, Digi 24 TV recalls the background to the dispute.
Geographical indications protect products against misuse or imitation of the registered name and guarantee the true origin of the product to customers. These rules ensure that all producers in the geographical area in question have collective rights to the product, provided that certain requirements are met, the EU explains on its official website.
After nearly two years of "resolute resistance" by its neighbors south of the Danube, Romania has won the right to a protected geographical indication of the "Dobrudzhanska banitsa", reports the Romanian television Digi 24. Now Romania will receive European recognition through the registration of the product with all the resulting rights for an unlimited period of time.
"Bulgaria's opposition is based on the common history of the Dobrudzha region, which also includes territory in Bulgaria, and our neighbors have been resolutely and persistently opposing it for almost two years," Ionuts Diakonyasa, adviser to the Ministry of Agriculture, told Agerpress. He specified that Bulgaria will be granted the right to use the name, but only locally, in the region south of Constanta County and without recognition as a protected geographical indication for a period of 10 years, although it initially requested 15 years. Bulgaria's neighbors will also not be able to export the product with a name translated into Romanian as "Dobrudzhanska banitsa", said the adviser at the Ministry of Agriculture.
To date, Romania has 10 products recognized under European quality schemes, of which nine are protected geographical products. These are plum majun from Topoloveni, salami from Sibiu, smoked Novak from Bursey, smoked Danube mackerel, sudjuci from Pleškoi, "Telemya" cheese from Sibiu, yellow cheese from Saveni, pike caviar salad from Tulča, traditional carp caviar salad. The cheese "Telemya from Ibanest" has a protected designation of origin.
At the same time, Romanian spirits are also registered at the European level, respectively in the category of fruit spirits and wine spirits.
At the level of the Ministry of Agriculture and Rural Development, specific actions aimed at registering the product "Wormwood", manufactured in the category of flavored drinks, in the European quality systems are being carried out. Seven other products submitted for registration are at an advanced stage, Digi 24 also informs.
14.03.2023
CHANGING CAREERS - WHAT ARE THE ADVANTAGES?
Professional life is a long journey into the unknown. Even if we work in a wonderful place, with great colleagues and feel valued, sooner or later a new challenge comes, a new opportunity to move forward. Developing skills while avoiding stagnation and burnout is the main motivation for making career changes. No one would turn down a better, more meaningful and more rewarding job. The more knowledge and abilities we put in, the better and higher paying position we will occupy.
After all, one changes jobs to be happier, right? Even if we are talking about a small step, such as moving to another position in the same company, or a big leap - changing the position, field and place of residence, the pros always outweigh the cons. The article presents the most important of them, as well as how to turn them into an advantage.
You start clean
Changing careers is a normal practice in the modern world, and no one is saying that one is doomed to work the same job until retirement. Quite the opposite - the labor market is open, dynamic and operates across borders and continents. With the right resume and CV template highlighting your strengths, you can expect many doors to open and soon you can land the job you want. Or which will surprise you.
With it will come the freshness, enthusiasm and energy of change. Starting your own business? Taking up a new position with the possibility of overseas travel? Starting work with a large client? As long as it's new, it's always interesting - and it will definitely make you forget stress, fatigue and boredom. You'll meet different people outside of your comfort zone, explore places and cultures, and be inspired to reinvent yourself. You will probably quickly become convinced that you can do things that you did not expect. And it's very likely that you'll like them.
You find your way
Despite the hundreds of self-help books and advice on how to find the job of your dreams, it is clear that there is no one-size-fits-all recipe. Career development is an individual process that depends not only on your knowledge and experience, but also on your human qualities. Therefore, do not look for ready-made solutions - they may have worked for someone, but for you it may be the exact opposite. Shake off expectations of what should or shouldn't happen in the first week, month or year.
And don't be misled by the notion that age is a vice. There is no such thing as too young for a high position or too old for another job. According to various statistics, on average we change 5 - 7 jobs - and only you know best when, where and how to continue your professional path.
You learn and you get better
Most recruiters say that moving to a new company helps you upgrade your skills. The first few years are especially valuable, when you usually learn the most. Maybe in the new office they work with different software or with devices that you are not familiar with? Or do they use other production methods and processes? Or is the enterprise managed differently?
Whereas in the past skills and occupations were acquired for life, now education and training are a permanent part of a more dynamic work style. In the age of artificial intelligence and remote work, entire professions are disappearing quickly, so it's important to keep up with technology. It is now realistic to imagine how software can replace translators, drones - couriers, robots - factory workers and even surgeons. Technology is not the enemy, as long as you know how to get the most out of it.
You grow as you search
Even the job search itself will teach you valuable lessons. It's an excellent way to get in touch with the labor market and the needs of employers. You might know it's time to pay attention to your online presence if you're a freelance musician, journalist or designer.
Or you may realize that you lack a project management certification that many people in your industry already have. What if at the job interview you are asked about your soft skills or foreign languages? In general, searching keeps you flexible and ready to grab the opportunity when it opens up.
Live better
Need to work to pay the bills and support your family? No, this kind of thinking stifles initiative and makes us feel trapped. Today, it is widely accepted that a fulfilling career is one of the keys to a happy life. We spend 8 hours a day at work - and if we are not happy there, then what will we take home when we go home to our loved ones? Stress, fatigue, conflicts, tension?
If you're unhappy in your work environment and it's affecting you personally, it might be time for a change. Because work is not just a matter of money, but of quality and fulfilling life. Whether you're feeling unsatisfied in your current job or just want to try something new, changing careers has far more benefits than risks. Start investing time and energy into it now.
13.03.2023
VOUCHERS ARE GIVEN TO THE UNEMPLOYED
The unemployed will learn a new kind of training vouchers. This is provided for by the Draft Decree of the Council of Ministers to determine the terms and conditions for providing training vouchers. In addition to those provided so far, vouchers will now be given for training for the first, second and third degree of professional qualification or for qualification in a part of a profession, for training in key competencies, including digital competences.
A new moment is the financing of trainings for the acquisition of four levels of digital competence. The value of the vouchers depends on the type and duration of the training. In the project, specific values have been determined for the relevant trainings. In cases of co-financing of the value of the HRDP voucher by employed persons, the requirement will be defined in the selection criteria for operations.
Persons awarded a training voucher will have the right to independently choose the type of training, its duration and the training provider.
A new point in the voucher mechanism is that for the purposes of external and independent certification of the acquired knowledge and skills in digital competences by the trained persons, a Unified Certification Center is being created, whose functions will be performed by the Center for Human Resources Development and Regional Initiatives under the Minister of labor and social policy.
The planned trainings (basic and intermediate digital skills) should start as a matter of urgency, no later than 01.04.2023. Therefore, the term of the public consultation was shortened within 14 days.
Vouchers for training will be provided by the Employment Agency to unemployed, inactive and employed persons - representatives of the relevant target groups under the Human Resources Development Program, the National Recovery and Resilience Plan and the Just Transition Fund. Individuals who meet the eligibility criteria will apply for a training voucher through the Employment Agency's electronic platform.
The voucher is a digital document that will be created officially in the electronic platform of the Employment Agency and will have a unique identification digital code that will allow its individualization and tracking.
The Employment Agency will continue to maintain on its website a public register of vouchers provided.
The value of the vouchers depends on the type and duration of the training. The project has set specific values for the relevant trainings as follows:
For training to acquire a professional qualification:
- for the first degree, with a duration of not less than 300 study hours - BGN 660;
- for the second degree, with a duration of not less than 660 study hours - BGN 1,320;
- for the third degree, with a duration of not less than 960 study hours - BGN 1,980;
- for part of a profession at the first qualification degree, with a duration of not less than 200 study hours - BGN 440;
- for part of a profession with a second qualification degree, with a duration of not less than 300 study hours - BGN 600;
- for part of a profession with a third qualification degree, with a duration of not less than 600 study hours - BGN 1,237;
For trainings to acquire key competences:
- for training in the key competence "Language literacy" and with a duration of not less than 16 study hours - BGN 70;
- for training in the key competence "Multilingual competence" and with a duration of no less than 300 study hours and three levels of study - BGN 900;
- for training in the key competence "Mathematical competence and competence in the field of exact sciences, technologies and engineering and with a duration of not less than 30 study hours - BGN 140;
- for training on the key competence "Digital Competence":
level (level 1 and 2 according to DigComp) and with a duration of no less than 55 study hours - BGN 330;
intermediate level (level 3 and 4 according to DigComp) and with a duration of no less than 45 study hours - BGN 320.
advanced level (level 5 and 6 according to DigComp) and with a duration of no less than 45 study hours - BGN 390.
highly specialized level (level 7 and 8 according to DigComp) and with a duration of no less than 45 study hours - BGN 420.
- for trainings on the key competence "Personal competence, social competence and competence to acquire learning skills" and with a duration of not less than 30 study hours - BGN 140.
- for training in the key competence "Civic Competence" and with a duration of not less than 30 study hours - BGN 140.
- for training in the key competence "Entrepreneurial competence" and with a duration of not less than 30 study hours - BGN 140.
10.03.2023
CONDITIONS FOR PROTECTION WHEN REPORTING FINANCIAL ABUSE
According to the newly adopted Law on the Protection of Persons Reporting or Publicly Disclosing Information on Violations, employers in the public sector with the exception of municipalities, employers in the private sector with 50 or more workers or employees, etc. are obliged to build whistle-blowing systems for disclosing information on violations of Bulgarian legislation or acts of the European Union that endanger or damage the public interest and the law of the European Union.
In what order and who has the right to file these reports?
Protection under this law is provided to a whistleblower from the moment the report is filed or information about a violation is made public.
A reporting person within the meaning of this law is a natural person who files a report or publicly discloses information about a violation that has become known to him in his capacity as:
- worker, employee, civil servant or other person who performs wage labor, regardless of the nature of the work, the method of payment and the source of financing;
- a person who works without an employment relationship and/or exercises a free profession and/or craft activity;
- volunteer or intern;
- partner, shareholder, sole owner of the capital, member of the management or control body of a commercial company, member of the audit committee of an enterprise;
- a person who works for a natural or legal person, its subcontractors or suppliers;
- a job candidate who participated in a competition or other form of selection for employment and in this capacity received information about a violation;
- a worker or an employee, when the information was obtained within the framework of an employment or service relationship, which was terminated at the time of the submission of the report or of the public announcement;
- any other whistleblower who reports a violation that became known to him in a work context;
- persons who assist the whistleblower in the whistleblowing process, persons who are related to the whistleblower and who may be subject to retaliatory actions due to the whistleblower, and legal entities in which the whistleblower owns an interest, for which he works or with whom it is otherwise associated in a work context.
It is important to clarify that individuals who anonymously reported unlawfully or publicly but anonymously disclosed information about violations and were subsequently identified and subjected to repressive retaliation also have the right to protection in the cases defined by law.
A whistleblower is entitled to a remedy provided he had reasonable cause to believe that the whistleblower's information was correct at the time of the whistleblower's report. In the presence of these conditions, the person who reports a violation to institutions, bodies, services or agencies of the European Union also has the right to protection.
Employers should designate one or more employees who are responsible for handling reports. Employees responsible for handling reports may be the officials in the structure charged with the processing and protection of personal data. These employees may also perform other activities assigned by the employer, in case their reconciliation does not lead to a conflict of interest.
The report is submitted to the employee in charge of handling reports, in writing, including by e-mail, or orally. Verbal reporting can be done by telephone, other voice communication systems, and at the request of the reporting person - through a personal meeting in a suitable time agreed between the parties.
Reference:
Law on the Protection of Persons Reporting or Publicly Disclosing Information on Violations
10.03.2023
WILL YOU BE PAID A SALARY IF YOU DON'T HAVE A CONTRACT?
Workers and employees should not agree to sign contracts with fictitious terms in them, as this prevents the control authorities from gathering indisputable evidence of the violations. This is advised by the Executive Agency "General Labor Inspectorate" (ЕA GLI).
In response to an inquiry by BTA, the department states that it is important for citizens to file reports in a timely manner, while they are still working, in order to be established at the workplace. Assisting the supervisory authorities, who are obliged to protect the anonymity of the whistleblowers, is also one of the advice of the GLI. From there they emphasize that the verbally agreed working conditions also hinder the provision of adequate protection.
"Labor legislation guarantees the rights of workers, but no one can protect them better than themselves," commented the inspection.
The most common alerts
The Labor Inspectorate often receives reports from workers who complain that they have not been paid what was agreed after they worked without an employment contract and were dismissed. The GLI states that in such cases no control can be carried out, because they cannot actually establish that the applicant is working. They cannot force the employer to pay the due amounts, as there is no written evidence that he really owes them, the inspection explains.
"It is also a common practice to report unpaid remuneration after the termination of the employment relationship, but during the inspections it turns out that the amount agreed in writing has been paid, and the individuals claim to have agreed verbally," the GLI also commented.
The reports received by the Labor Inspectorate mostly concern labor relations. They are related to the payment of labor, the creation and termination of employment relationships.
Last year, the control bodies of the Labor Inspection established 93,954 violations related to the implementation of labor relations. The most common ones refer to the payment of labor, the establishment of employment relationships and the provisions on the distribution of working time.
For January 2023, 3,392 inspections were carried out, during which 18,749 violations were found. The number of persons working without an employment contract in January 2023 was 270. The most violations are found in the sectors and economic activities in which the most inspections are carried out. These are construction, hotel and catering, trade, crop production and animal husbandry.
These sectors have been identified on the basis of analyzes of the results of the control activity and other analyzes as high-risk in terms of the application of labor legislation. Accordingly, measures for enhanced control are planned in them and the largest number of checks are carried out in relation to all economic activities, commented the GLI. And they specify that more violations are also found in economic activities such as "Clothing production" and "Food production".
The prevention of health and safety at work
The prevention of "black work" and ensuring healthy and safe working conditions, especially in high-risk activities and sectors, are among the key highlights of the Labor Inspectorate's control. For the prevention and limitation of the "gray" economy, a special measure is planned annually, the inspections of which are focused on the implementation of labor relations. Commercial establishments are being intensively inspected, and campaigns are being planned in seasonal establishments, mainly in the hotel and restaurant industry, as the risk of working without employment contracts in them is also very high, noted the GLI.
From the end of 2022, an increase in the number of employees of the General Labor Inspectorate has also begun. The inspectorate believes that the appointment of more officers with inspection powers will contribute to covering more jobs in more economic activities.
According to another planned measure, periodic control is carried out in sites with high-risk activities in terms of ensuring health and safety when working in them. These are objects in the mining industry, metalworking, production and storage of ammunition, etc., which must be inspected at least once a year.
Citizens can assess the working environment themselves
From the end of 2022, workers can check whether there is a risk of working undeclared through a special self-assessment tool. It was developed under the project "Cooperation for Decent Working Conditions", financed by the Fund for Bilateral Relations under the Financial Mechanism of the European Economic Area and the Norwegian Financial Mechanism 2014 - 2021.
"The value of this tool is that if a risk is identified, the workers also receive guidance on how to act to eliminate it," commented GLI. The tool is available here.
Questionnaires for self-control were also developed under another project "Optimization and Innovations in EA GLI " of the Operational Program "Development of Human Resources", co-financed by the European Social Fund. They are related to general requirements of legislation, as well as specific to specific sectors and economic activities. These questionnaires are sent by labor inspectors to employers. At the discretion of the labor inspectors and depending on the information filled in and the risk of violations, an on-the-spot inspection is carried out at an enterprise, before which, however, the employers again have time to correct the discrepancies. Filling out the questionnaires itself does not carry any risk of sanctions for them, but it helps them to determine for themselves which legal provision they are violating and to remedy the violation, according to GLI.
At the Labor Inspectorate, we do not believe that all employers commit intentional violations. In most cases, it is a matter of ignorance. That is why we do our best to support honest employers in their efforts to comply with the law through the implementation of similar projects, commented the department.
In order to increase the awareness of employers and workers about their rights and obligations regarding labor legislation, in addition to the developed self-assessment tool, the inspectorate launched the information campaign "Decent work - it's up to you".
If workers believe that their labor rights have been violated, they can report to the Labor Inspectorate or to the Inspectorate's Hotline 0700 17 670.
09.03.2023
BNB RAISED THE MAIN INTEREST RATE ABOVE 2%
The BNB announced a new increase in the main interest rate. As of March 1, 2023, the main rate becomes 2.17 percent. This is the sixth increase since October. From February 1, 2023, the main interest rate was increased to 1.82 percent, from January 1 - to 1.42%, and from December 1 - to 1.30%. In October it was set at 0.49% and in November it rose to 0.59%. The main rate was last different from 0.00 on January 1, 2016, when it was 0.01%.
The value of the main interest rate matters, but only in some limited cases. Most of all, the main interest rate is used to calculate the penalty or statutory interest on late payment. The calculation is done by adding 10 percentage points to the main interest rate.
Due to the growth of the main interest rate, from January 1, the legal interest for overdue monetary obligations of citizens, companies became 11.42 percent per year.
In our country, interest for overdue payment is regulated by the Law on Obligations and Contracts and Resolution of the Council of Ministers No. 426 of December 18, 2014.
It is written in them that the so-called penal interest, which is applied to all public obligations (taxes, insurances, fees, etc.), is formed twice a year - on January 1 and July 1, adding to the base rate, which is 10 percent, the amount of the main interest rate determined by the Bulgarian National Bank. Since it was 1.42 percent in January, the legal interest for overdue monetary obligations, which is also often applied in contracts between citizens and businesses, reaches 11.42 percent per year.
08.03.2023
IN WHICH FIELDS DO THE MOST WOMEN WORK IN OUR COUNTRY?
The economic activities in our country, where there is a predominant share of women among the employed, are few in number. In three of them, the share of women exceeds 80% of those working in these fields. The economic activities with the largest relative share of employed women in our country are "Production of textiles, clothing, shoes" (87% of the employed), "Medical-social care with accommodation and social work without accommodation" (84.1%) and "Education ” (80.8%), it is clear from the data of the National Statistical Institute.
Among the other economic activities, where the share of women is the highest in our country, there are also "Human health care" (78.1%), "Financial and insurance activities" (65.8%), "Hotel and restaurant industry" (65.6%) and "Legal, accounting, architectural and engineering activities" (64.9%).
The information was prepared by NSI on the occasion of International Women's Day - March 8. Started as a political event, the holiday gradually became part of the culture of many countries around the world, the institution writes.
In 1975, declared by the United Nations as International Women's Year, March 8 was celebrated as Women's Day. Two years later, in December 1977, the UN General Assembly, with its resolution, declared March 8 as International Women's Day, to be celebrated annually by member states, in accordance with their historical and national traditions.
In Bulgaria, the first public celebration of this day was with talks in 1915, and as a general Bulgarian holiday it was introduced in the middle of the 20th century, according to the NSI.
08.03.2023
THE INVISIBLE CONTRIBUTION OF WOMEN TO THE ECONOMY
Bulgarian women, along with millions of other women around the world who are part of the "sandwich" generation, taking care of both their children and their elderly parents, continue to be among the untapped potential of the world's economies. At the same time, these women subsidize their national economies with unpaid domestic labor and pay a "time" tax for the period of unpaid and socially unappreciated activities in which they could be upgrading their skills and education.
This was commented in an interview for BTA by Prof. Dr. Diana Sabotinova from the Burgas Free University, contacted by BTA on the occasion of today's International Women's Day.
According to data from the International Labor Organization (ILO), based on time budget research in 64 countries, between 10 and 39 percent of GDP is contributed by unpaid domestic work, the scientist said. In some economies this contribution is greater and in others less, depending on the hours of unpaid work that women perform.
In general, we are talking about the so-called care economy, which is the invisible part of the economy and is not included in the GDP reporting, but is reported by the statistics in the "Time Budget" study, said Prof. Dr. Diana Sabotinova.
Women in Bulgaria spend 4.4 hours a day on household chores
The last study of the time budget for Bulgaria is from 2011, and according to it, women in the country spend 4.4 hours a day on household care, while men - 2.49 hours. The NSI is about to release data from a new study, which is being conducted from March 2022 to March 2023.
According to the ILO's research, 16.4 billion hours each day are spent on unpaid care work, which is equivalent to 2 billion people working 8 hours a day without pay, the scientist commented. Women and girls take on more than 75 percent of the world's unpaid care work. If this is recalculated by multiplying the time spent on such "services" by the hourly minimum wage, we get $11 trillion in unpaid home care provided primarily by women around the world. This is ten percent of the world GDP, which for 2022 amounts to 104 trillion dollars, which is not accounted for, does not find a place in government programs and social policies, comments Prof. Dr. Diana Sabotinova.
In this way, according to the scientist, women subsidize those public services - the care of children and the elderly, which rest mainly on the shoulders of women of the so-called "sandwich generation" - 50+ years, who care for both children and adults people. Women also subsidize business, because this unpaid work reduces the cost of labor in the macroeconomics, noted Prof. Dr. Diana Sabotinova.
When public spending is cut in order to have fiscal stability, spending on health, education, and public services is automatically cut, which in turn increases the unpaid work that women do, which, according to the economist, is a countercyclical behavior of unpaid work in the economy.
If women's domestic caregiving, in particular childcare and elder care, became part of the labor market, the ILO estimated that global employment in caregiving would increase from 206 million jobs to 358 million. by 2030. According to Prof. Dr. Diana Sabotinova, this could add 152 million jobs based on socio-demographic processes related to the aging of the population.
The scientist reminded that already in 2015, the UN adopted sustainable development goals related to education, healthcare and long-term care for the elderly. In this context, estimates suggest that employment in aged care could grow to 475 million jobs or an additional 269 million jobs by 2030. For this to happen, it is necessary to integrate this unpaid domestic work into the macro economy, which will allow its measurement and inclusion.
The cost of these jobs can be covered by both public sector and private investment. According to ILO data, it is about 5.4 trillion dollars in annual investments or 4 percent of world GDP, said Prof. Dr. Diana Sabotinova. At the same time, she pointed out that high returns cannot be expected from such investments, but emphasized that they are the basis for the creation of human capital.
Women taxed "time" all their lives
This unpaid work is a kind of "time" tax on women throughout their lives, because it takes up some of their free time that goes into unpaid and unappreciated activities. If it is assumed that during this gap women could develop by getting additional education, for example, this means that they are deprived of this opportunity, which does not allow the realization of their full potential, the scientist commented. This imbalance not only deprives women of economic opportunity – it also costs society dearly in the form of lower productivity and missed economic growth. If this changes, the first effect will be on the growth of GDP and the economies in general, comments Prof. Dr. Diana Sabotinova.
The time banks
However, it is not necessary to make monetary investments in order to value women's care of children and the elderly. Time banks come to the rescue. Time banking is a service barter system in which people exchange services for credits based on time rather than money.
The term "Time banking" was coined by the American lawyer Edgar Kahn, who recommended its use as a supplement to state social services, said Prof. Dr. Diana Sabotinova. In Japan, in a period of shortage of funds to finance these social cares, they implemented the idea of the time bank. In this way, it was possible for a working person in Tokyo to take care of his parents in Osaka while caring for an elderly person in the city where he worked and to "pay" with the time spent on this care to another person who lives with his elderly parents in Osaka, the scientist said. This also applies to childcare if the grandmother does not live in the city where the parents work and raise their child.
08.03.2023
CAN BONUSES BE GIVEN WITHOUT FEES
The management of a company is considering providing additional incentives to its employees upon reaching 5, 10, 15 and 20 years of service in the company in the form of a subject award and a travel voucher from a travel agency, with the amounts for different anniversaries being in different amounts. These benefits will be provided to all employees. Can these costs be defined as social costs according to the Law on Corporate Income Taxation granted under the Labor Code?
Pursuant to Article 204, Paragraph 1, Item 2 of the Law on Corporate Income Taxation, documented social expenses provided in kind to workers and employees and persons employed under a management and control contract (employees) are taxed with a tax on expenses. In this scope of social expenses provided in kind, the legislator explicitly includes: contributions (premiums) for additional voluntary insurance, for voluntary health insurance and for "Life" insurance (Art. 204, paragraph 1, item 2, letter "a") and the costs of food vouchers (art. 204, paragraph 1, item 2, letter "b" of the Law on Corporate Income Taxation).
The concept of "social costs provided in kind" is defined in item 34 of §1 of the Additional Provisions of the Law on Corporate Income Taxation, the criteria of which must be met at the same time in order for certain costs to be qualified as social and to be treated in accordance with Part Four "Tax on Expenditures" of the same Act.
According to §1, item 34 of the Additional Provisions of the Law on Corporate Income Taxation, social benefits reported as expenses under Art. 294 of the Labor Code and provided in the order and manner determined by Art. 293 of the Code can be defined as social of labor or by the management of the enterprise, provided that benefits are available to all workers and employees and to persons employed under a management and control contract. In the third sentence of §1, item 34 of the Additional Provisions of the Law on Corporate Income Taxation, it is stated that there is no provision of social costs in kind when there are monetary relationships in any form between the employer and the employees relation to social benefits received.
Pursuant to Art. 293 of the Labor Code, the way of using the funds for social, domestic and cultural services is determined by a decision of the general assembly of workers. Article 294 of the Labor Code regulates the social benefits that the employer can provide to employees.
The condition that social benefits are available to all workers and employees and to persons employed under a management and control contract must also be met.
In order for the social benefit to be accessible, it must be ensured that it can be enjoyed by all employed persons. Although they are derived from the legal relationship between the taxable employer and the employees, social benefits are not tied to the quantity and quality of the work performed, but aim to secure needs concerning the life and livelihood of the employees, which do not arise from and are not related to the employment from the persons position. The decision of the General Assembly of workers and employees or that of the management of the enterprise must contain parameters regarding the acquisition provided: content (type), scope of the entitled persons (all, including potential users), method of obtaining, value and limit of the acquisition. The criterion for social gain requires that its amount is not bound and does not depend on the position held by the person, on the work results achieved by him, the amount of remuneration or on the number of days worked, which are rather criteria for determining additional labor stimulation , and not for the allocation of funds for social, household and cultural services (in this direction is Decision No. 3311/23.05.2000 of the Supreme Administrative Court in administrative case No. 6438/99). Therefore, the value of social spending should be the same for everyone. When employees have different needs and interests, however, the employer may provide the opportunity to choose between alternative social benefits of the same value, which does not contradict the requirements of §1, item 34 of the Additional Provisions of the Law on Corporate Income Taxation.
In the hypothesis described in the inquiry, it concerns the provision of subject prizes and travel vouchers by a travel agency to employees (upon reaching 5, 10, 15 and 20 years of service) by the employer.
The very meaning of the word "award" implies that it is given when high, exceptional results or merits have been achieved in the labor activity in a specific employment relationship. The award is given by the employer as a sign of gratitude for long and conscientious service to him. The award is given to an individual or group of people in recognition of excellence in a given field.
Given the above, that the purpose of providing prizes and vouchers is for the benefit of certain persons, it follows that one of the cumulative requirements for the fulfillment of the conditions defining the concept of "social costs provided in kind" in the sense of §1, item 34 of the Additional Provisions of the Law on Corporate Income Taxation, namely to be available to all workers and employees and to persons employed under a management and control contract.
When there is no cumulative fulfillment of the conditions defining the concept of "social expenses provided in kind" in the sense of §1, item 34 of the Additional Provisions of the Law on Corporate Income Taxation, no tax should be determined on the expenses under Art. 204 , paragraph 1, item 2 of the Law on Corporate Income Taxation, and Article 205 of the Law on Corporate Income Taxation will apply. According to it, social costs that are not provided in kind, representing the income of the individual, are taxed under the conditions and in accordance with the Law on Taxes on the Income of Individuals.
Regardless of their in-kind nature, the benefits in question cannot be defined as social costs provided in kind, given the non-fulfillment of the "general availability" criterion. Social benefits are intended to secure the needs of the life and livelihood of the employed persons, and these needs cannot be made dependent on the position held by the person or the work results achieved by him.
From the information presented in the inquiry, it can be assumed that the specified benefits are not aimed at satisfying social and household needs, but are intended to reward (stimulate) certain persons for their work. In this situation, the costs of awards will bear the marks of costs for remuneration of the staff, respectively taxable income from employment relationships for natural persons.
In this case, the form of these incentives (rewards) - whether they will be tangible gifts or vouchers for an excursion, as well as their monetary equivalent, is irrelevant to the qualification of the expense.
In the event that the benefits in question are an incentive for achieved work results, they have the nature of additional labor remuneration, which is not defined as mandatory by a normative act. In this scenario, the provision of Art. 42, para. 1 of the Law on Corporate Income Taxation is applicable, according to which the expenses representing income of local individuals under the Law on Taxes on the Income of Natural Persons, which have not been paid as of December 31 of the current year, are not recognized for tax purposes in the year of their accounting. Unrecognized expenses pursuant to Article 42, Paragraph 1 of the Law on Corporate Income Taxation are recognized in the year in which the income is paid, up to the amount of the paid income (Article 42, Paragraph 3 of the Law on Corporate Income Taxation).
