Fines for Violations of Accounting and Tax Regulations in Bulgaria

Violations of accounting regulations in Bulgaria can lead to severe financial and criminal penalties for both individuals and companies. Therefore, understanding the regulations before company formation in Bulgaria is essential to avoid legal issues and fines.

In this article, we will examine the main penalties for accounting violations in Bulgaria and provide useful advice on avoiding fines.

Violations and Penalties under the Accounting Act in Bulgaria

According to Chapter Nine of the Accounting Act in Bulgaria, there are various administrative penalties for violations of accounting regulations.

1. Violation in Organizing Accounting Activities (Art. 68)Anyone who does not organize and manage accounting activities according to Article 9 may be fined between 5,000 and 15,000 BGN. The company is subject to a property sanction between 10,000 and 20,000 BGN. In case of repeated violations, the fines double.
2. Violation in Retaining Accounting Information (Art. 69)Anyone who does not retain accounting documents according to the requirements is subject to a fine between 500 and 3,500 BGN, while the company may receive a property sanction between 2,000 and 7,000 BGN. Repeated violations result in doubling the penalties.
3. Assigning the Preparation of Financial Statements to Unqualified Persons (Art. 70)Assigning the preparation of financial statements to unqualified individuals results in a fine between 500 and 3,000 BGN for the person and between 2,000 and 5,000 BGN for the company.
4. Failure to Prepare Financial Statements and Annual Reports (Art. 72)Failure to prepare financial statements results in a fine between 500 and 3,000 BGN for the individual and between 2,000 and 5,000 BGN for the company. If a sustainability report is not included, fines range from 1,000 to 15,000 BGN.
5. Failure to Submit Declarations for Payments to the Government (Art. 73)Failure to submit declarations for payments to the government results in a fine between 1,000 and 3,000 BGN for the individual and between 2,000 and 15,000 BGN for the company.
6. Failure to Publish Financial Statements and Other Documents (Art. 74)Anyone who does not publish a financial statement within the required period is subject to a fine between 200 and 3,000 BGN. The company may be fined with a penalty from 0.1% to 0.5% of the net turnover, but not less than 200 BGN.
7. Failure to Comply with Independent Financial Audit Requirements (Art. 75)If a person does not appoint an independent financial audit, they are subject to a fine between 500 and 5,000 BGN, and the company between 2,000 and 10,000 BGN.
8. Other Violations (Art. 77)For violations not described, the fine ranges from 200 to 1,000 BGN, while the company may receive a penalty between 300 and 2,000 BGN.

Violations of Accounting and Tax Regulations in Bulgaria: Penalties for Failure to Submit the Annual Financial Statement

Failure to submit the annual financial statement results in significant fines. The fine ranges from 200 to 3,000 BGN for individuals and from 0.1% to 0.5% of the net turnover for companies, with a minimum of 200 BGN. In case of repeated violations, the penalties double.t

The deadline for submitting the annual financial statement is September 30th of the year following the reporting period. Companies must publish their statements in the commercial register, while non-profit legal entities must submit their reports to the corresponding register.

The law provides for an automatic extension of the deadline in case of rejection due to technical errors, provided that the resubmission takes place within 14 days.

Read also: How to Set Up and How a Joint Stock Company Works in Bulgaria

Violations of Accounting and Tax Regulations in Bulgaria: Penalties for Violations of VAT Regulations

VAT regulation violations include:

• Non-payment of VAT: A fine proportional to the unpaid amount, plus interest for late payment.
• Unsubmitted VAT Declarations: Penalties based on the amount due and the severity of the violation.
• Omissions or Falsifications: High fines and, in more severe cases, criminal measures.

Statute of Limitations for Penalties and Procedures to Avoid Fines

Penalties are subject to a three-year statute of limitations from the date of the violation, which can be extended in case of late discoveries or ongoing investigations.

To avoid fines:

• Meet Deadlines: Submit financial statements and tax declarations on time.
• Maintain Proper Accounting: Organize accounting activities accurately.
• Publish Financial Statements Correctly: Ensure mandatory documents are published in the designated channels.
• Rely on Qualified Professionals and Registered Auditors: Preparing financial statements with the help of licensed accountant in Bulgaria and auditor, like Accountancy Bulgaria, is essential to avoid mistakes and penalties. Additionally, it can be beneficial for taking advantage of incentives and tax reliefs periodically offered by the government.

Read also: Freelance in Bulgaria: Essential Legal Aspects for Digital Nomads

Conclusions

Violations of accounting and tax regulations in Bulgaria can lead to severe consequences. Meeting deadlines, managing accounting accurately, and relying on qualified professionals like a Accountancy Bulgaria are essential for avoiding fines. Ensuring regulatory compliance contributes to the long-term growth and stability of a business.