Tax News: Promulgated amendments to the Tax and Social Security Procedure Code

Tax News

KPMG’s Tax News presents amendments to the Tax and Social Security Procedure Code (TSSPC).


The fifth issue of Tax News in 2017 summarizes the more important amendments introduced by the Act to Amend and Supplement the TSSPC promulgated in issue 92 of the State Gazette dated 17 November 2017. The amendments concern the TSSPC as well as certain tax laws and other regulations. The amendments will be in force as of 1 January 2018 except for those for which other terms of enforcement are envisaged, as discussed below. 

The amendments are aimed at decreasing the administrative burden imposed on citizens and businesses by cancelling the requirement for provision of certain official certification documents in paper form. Also, the regime concerning the liability of shareholders related to the tax and social security liabilities of a legal entity is changed. 

Tax and Social Security Procedure Code

Liability of shareholders

  • The circumstances under which a transfer of shares is considered malicious are now clearly defined. These circumstances were not formulated precisely enough during the August 2017 TSSPC amendments when liability for unsettled tax and social security obligations in cases of transfer of shares was first introduced. It is clarified that a transfer of shares shall be regarded as malicious provided that the shareholder was aware at the time that the company is insolvent or over-indebted and the transfer of shares occurred prior to the preceding of two specified dates: (i) the date of publication of the debtor's application for commencement of bankruptcy proceedings in the Commercial Register; and (ii) the date of registering the decision of the bankruptcy court to initiate bankruptcy proceedings with regard to the debtor. 
  • It is provided that the shareholder shall not be held liable where the bankruptcy court terminates the bankruptcy proceedings due to approval of a recovery plan or on the grounds that an agreement to settle the payables is concluded pursuant to the provisions of the Commercial Act. 
  • The TSSPC amendments governing the liability of shareholders enter into force as of 21 November 2017. 

Decrease in the administrative burden

  • It is envisaged for the Customs Agency and the municipalities will provide information on the existence or lack of liabilities ex officio by electronic means. 
  • The obligation to inform the National Revenue Agency about the de-registration of a sole proprietor from the Trade Register is cancelled. 

Country-by-Country reporting

  • The rules with respect to Country-by-Country (CbC) reporting have been refined and new provisions are added to reflect the impact of currency fluctuations on the threshold of EUR 750 million. 
  • According to the new provisions, a Bulgarian constituent entity which is part of a Multinational Enterprise Group (MNE) will not submit a CbC report in Bulgaria if the consolidated group revenue of the MNE for the fiscal year preceding the reporting fiscal year does not exceed the threshold set in the jurisdiction of the ultimate parent company. This will apply provided that this threshold is a near equivalent of EUR 750 million in the domestic currency of this jurisdiction. When calculating the equivalent amount, the currency exchange rate as of January 2015 is to be applied. 
  • The amendments enter into force as of 21 November 2017. 

Accountancy Act 

  • Legal entities that did not carry out any activities during the reporting period are exempt from the obligation to publish financial statements for the respective year. 
  • The entities are to declare this circumstance by publishing a declaration in the Commercial Register by 31 March of the following year. No fees would be due for the publishing of the declaration. 

Corporate Income Tax Act (CITA) 

  • Legal entities that did not carry out any activities within the meaning given by the Accountancy Act during the fiscal year are exempt from the obligation to submit an annual tax return under Article 92 of the CITA. 
  • The amendment will be enforced on 1 January 2018, but will be applicable to the annual tax return for 2017 as well. 

Local Taxes and Fees Act 

  • The attestation of the payment for motor vehicle tax for the purpose of carrying out the annual technical check of the motor vehicle will also be possible through access to the automated systems for exchange of information, in addition to the possibility to present a document issued or stamped by the municipality, as was the status until now. 
  • No fee will be payable for requesting and providing information on the existence or lack of liabilities of the tax liable person by the respective municipality. 

Value Added Tax Act 

  • The obligation for preparing and filing of a list of available assets upon the VAT registration is repealed. 
  • As from 1 January 2019, the tax payers may apply for a voluntary VAT registration upon their initial registration with the Registry Agency. In this case, the obligation for filing a statement for taxable turnover is repealed. The 7-day term for inspection by the revenue authorities of the grounds for the VAT registration is maintained. 
  • As from 1 January 2019, the application for VAT registration may also be submitted by an attorney who is expressly authorized for that by means of a written power of attorney prepared according to the Bar Act. 

Excise Duty and Tax Warehouses Act 

  • There is no longer a requirement for the persons registered in the Commercial Register to declare the fact that they are not in an insolvency procedure or liquidation upon filing of a request for the following registration procedures: license for management of a tax warehouse, a certificate for an exempt from excise duty final consumer, for registration under Article 57а EDTWA, or for a registered consignee, a temporarily registered consignee and registered consignor. 
  • Upon filing of the above requests, the obligation of the persons to declare that they have not performed a serious or repeated infringement of the EDTWA before the customs authorities is also cancelled. 

© 2022 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.



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