Delchev & Partners

The new sequence of payment of tax liabilities shall not be applicable in respect of:

• Tax liabilities under a tax assessment act which is not in force yet, unless until the initiation of the execution proceedings the taxable person files an application that he settles the liabilities under this act.
• Social security installments for additional mandatory pension insurance – in the case of several liabilities, the taxable person may state which one is settled. Otherwise the general payment procedure shall be applied.
• Liabilities for health insurance contributions of self-insured persons (men of the profession; sole traders; shareholders; registered agricultural producers and tobacco producers), of persons who are not health insured on other grounds and pay health insurance contributions on their own account, as well as of Bulgarian citizens residing abroad for more than 183 days in a given calendar year and pay health insurance contributions in order to recover health insurance rights. In these instances the persons may state which health insurance liabilities are settled by filing an application form.

In relation to the new sequence of payment of tax liabilities, the taxable persons are given Internet access via the revenue agency web site to their tax and social security account through personal identification codes or through electronic signature.  Thus the taxable persons shall be able to follow by themselves their public liabilities and the due dates.

2. Changes to the procedure for issuance of tax assessment acts

Starting from 2013 the tax assessment acts shall be issued by the body assigning the tax audit and the tax audit supervisor.  Thus, for the first time, a body that has not directly participated in the tax audit shall be involved in the issuance of the tax assessment act.  Besides, if both bodies cannot reach an agreement on the issuance of the tax assessment act, it shall be issued by a third party determined by the regional tax director.

The new procedure for issuance of tax assessment acts shall be applied in tax assessment procedures starting after 01.01.2013.

The Directorate responsible for the tax assessment appeals (i.e. Appeals and Management of Execution Directorate) shall be restructured in a Directorate under the name Appeals and Tax-Social Security Practices.

3. Changes to the procedure on staying of tax audits

Effective from 26.10.2012 new rules are in force as regard staying of tax audits. According to the new rules the taxable persons shall have the possibility to appeal orders staying tax audits or denying the staying of tax audits or failures of the authorities to allow the staying of tax audits upon requests which failures are equalized to tacit denials.  Before the changes the orders for staying of tax audits were not subject to appeal, now such order may be appealed before the competent administrative court whose order shall be final.

All persons involved in stayed tax audits have also been given the right to appeal the orders by 30 January 2013.

Besides, a maximum staying term of 8 months has been introduced in relation to exchange of information procedures with other countries. The maximum term shall be applied for stayed tax audits as well but the term shall start running as of 01.01.2013.

4. Interest on unpaid advance installments

The period for which interest is due on unpaid advance installment has been changed. The interest shall start running form the date, on which the advance installment has become due and shall be owed until the date of payment of the respective advance installment but no later than 31-st December of the year for which the advance installment is due.

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.