Tax audits Bulgaria

Tax News Bulgaria: X-XI.2022

  • NRA (National Revenue Agency) Tax Audits for Companies Declaring Over 100 thousand in Cash

NRA inspections and tax audits for cash of firms

National Revenue Agency`s tax audits have been launched for two thousand five hundred (2,500) trading companies (TCs) and twelve thousand eight hundred (12,800) individuals in Bulgaria declaring more than one hundred thousand (100,000) leva in cash (reference: based on 2020 data).

If you are among these TPs and persons, expect a visit from the NRA. The inspectors promise not to miss anything: every penny will be counted, the books will be checked, and the data will be compared with the amounts available.

The objects of the tax audits will receive a phone call or an email

The NRA said that businesses and individuals who will be audited will receive advance notice of this by email or phone. This is being done to give them one last chance to get their books in order and voluntarily declare any deficiencies to the NRA. The possibility of corrections to the annual accounts is open, and companies can resubmit them if they have made, either voluntarily or involuntarily, any errors.

The Deputy Executive Director of the NRA, Z. Gabrovska, said that all this is done in the spirit of a partnership approach. The NRA acknowledges the diligence of the companies to pay all their taxes and obligations, especially in the past year. Many companies have already made the necessary additional changes in their annual reports, and have filled in the missing data and funds.

The state suffers an annual loss of nearly three hundred million leva from “money under the table”

BGN 300 million – that is the amount of damage the state suffers from paying salaries to employees of companies in cash, or “in hand”, without declaring them. The positive thing in this case is that this amount has decreased significantly over the last 10 years, when it was over BGN 400 million. The good work of the NRA inspectors seems to be bearing fruit, and the undeclared salaries have decreased by BGN 100 million (25%). In addition to the work of NRA inspectors, a number of economic changes in the tax sector undertaken by the state have contributed to this.

According to the data from the state tax agency, the industries in which the most frequent are paid “under the table “and thus conceal part or even all of the wages are: wholesale and retail trade, hotels, restaurants and construction.

For qualified legal assistance about NRA audits and inspections:

tax law Bulgaria

  •  What is the Purpose of the New Changes in the Tax Law?

Lawmakers target traders renting properties and cars through online platforms

Tax evasion by traders who rent out cars and properties through online platforms – that’s the aim of the latest changes to the Tax Procedure Law (TPL). The upcoming changes have been uploaded for public consultation.

What is the tax avoidance scheme of online traders?

Traders take advantage of the large number of online platforms. They offer their services on many of these platforms, thereby fragmenting the income received. Some traders declare only a small portion of their dividends, while others do not report their profits to the state at all. Digitised online platforms require significant time and resources to detect and track the traders on them. Gaining access to their accounts and accounts is even more difficult. Merchants rely on exactly this to hide their income. According to an estimate by the NRA (National Revenue Agency), the concealed income amounts to 40 to 60 percent of the alleged income.

What do the changes in the Draft Law envisage?

The new changes to the Tax and Insurance Act will oblige the operator of the relevant online platform to collect the data required by the NRA for each trader. This will cover all traders and consumers who offer goods, cars and property for rent. As well as other services.

What will the data required by the NRA contain?

– The trader’s identity, country and address;

– tax number and amount of remuneration received from the platform.

The platform operator must verify the information collected, also using any documents in its records, as well as any electronic interface provided by a Member State or the European Union for free use, to verify the validity of the tax or VAT identification number.

Which users on online platforms fall under the new changes to the Tax Act?

  1. Traders who rent out any type of property and means of transport via the platform and who are residents of the Republic of Bulgaria or another EU Member State.
  2. Traders and persons who offer personal services, sale of goods.

New tax

The deadline by which the online platform must transmit the collected data to the Executive Director of the NRA is, 31 January (of the year following the calendar year for which the data is). The submission of the data only takes place in one EU Member State. The data will then also be provided to the tax office where the trader is resident and where the property is located.

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