Glossary
Indirect Tax
A tax paid by the end consumer but collected and remitted by another party (usually the seller or supplier) when goods or services are sold. This tax is not levied directly on individuals’ income but on consumption, as it is included in the price of the goods or services. Examples of indirect taxes in Bulgaria include Value Added Tax (VAT), excise duties, and customs duties.
Individual Account
A personal account of the insured person in a pension fund, where all contributions, the returns on their investment, deductions for fees, and other transactions are recorded in accordance with the fund’s rules. The account is owned by the insured person and serves to determine the amount of accumulated funds to be used for the payment of a pension or other social security benefits upon the occurrence of the legally prescribed conditions.
Individual (pension) Coefficient
One of the four components used in the formula for calculating pensions. The coefficient is determined based on the insured income of the individual for periods after 31.12.1999 until the date of pension granting, in accordance with the rules established in the Social Security Code.
Inflation
A general increase in the overall level of prices of goods and services in the economy, leading to a decrease in the purchasing power of money. Inflation can be caused by rising demand, increasing production costs, or structural and monetary factors. It is measured using the Consumer Price Index (CPI) or other statistical indicators. High inflation reduces the real value of incomes and savings, while moderate inflation is often considered a sign of a growing economy.
Inflation - glossary for children
A rise in the prices of goods and services.
Inheritance
The totality of property rights and obligations that pass from a deceased person (decedent/ testator) to one or more living persons (heirs) by law or by will.
Inheritance Tax
A local direct tax imposed on property inherited by law or by will (movable and immovable assets, property rights, receivables, and liabilities) located in Bulgaria or abroad by Bulgarian citizens, as well as on property in Bulgaria inherited by foreign citizens. The tax liability applies to heirs by law or will and legatees. The tax is administered by the municipalities and applies only to inherited property not exempted by law. It is regulated under the Local Taxes and Fees Act. The tax rate is determined by an ordinance of the respective municipal council and depends on the degree of kinship and the value of the inherited property. Exemptions apply to the surviving spouse and direct line heirs without limitation, as well as to heirs with inheritance below a statutory threshold.
Insolvency
A state in which a natural or legal person is unable to pay their debts on time.
Insolvency Proceedings (Bankruptcy)
A judicial procedure under the Commercial Act initiated against a merchant who has become insolvent or over-indebted, with the aim of satisfying creditors through liquidation of the debtor’s assets or by means of a recovery plan. In Bulgaria, a Personal Insolvency Act has been adopted, which regulates the procedure and conditions for declaring insolvency of insolvent, bona fide debtors, with the aim of fairly satisfying creditors and restoring the debtor’s financial activity.
Insurable Income
The income on which social security contributions are calculated and paid in accordance with the law.
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