New Act on the Measures and Actions during the State of Emergency

New Act on the Measures and Actions during the State of

Today, 23 March 2020, following discussions on the reasoning of the President’s veto, the Parliament adopted the new Act on the Measures and Actions during the State of Emergency declared by virtue of Resolution of the National Assembly dated 13 March 2020 (“the Act”).


The Act provides for various measures aimed at mitigating the negative impact of the epidemic on persons and legal entities. Some of the measures prescribed concern the civil and commercial relations between private parties, while others are related to the performance of their administrative and tax obligations.

Additionally, the Act introduces amendments to many other effective legislative acts such as the Labor Code, the Social Security Code, the Foreign Nationals in the Republic of Bulgaria Act, the Criminal Code, etc., related to the complicated public relations resulting from the epidemic and, in particular, the relations between employers and employees as well as those regarding the terms of validity of identity documents and residence certificates.

The Act shall remain in force for the period of the state of emergency. Most of the provisions of the Act become effective as of 13 March 2020.

Below is an overview of some of the more significant provisions of the Act.

Suspension and extension of various statutory terms

The Act provides for suspension of the following terms:

  • procedural terms in court and arbitration cases and enforcement proceedings
  • prescription and other statutory terms, the expiration of which results in cancellation of rights or creation of obligations of private parties
  • prescription terms for assessment of tax and social security obligations under the Tax and Social Security Procedural Code, whereas enforcement proceedings under the Code will not be initiated except in the cases prescribed in the Act
  • terms for execution of instructions of administrative bodies given to persons and legal entities during the course of various administrative proceedings.

By exception, the terms in certain legal proceeding are not suspended.

In accordance with the Act, the terms of validity of administrative acts which are set to expire during the period of the state of emergency (e.g. authorizations, licenses) are extended with one month starting from the date on which the state of emergency is lifted. The statutory terms not mentioned in the preceding paragraphs and related to exercising of rights and performance of obligations of private parties are equally extended, in case they are set to expire in the same way.

Changes in the deadlines for declaration and payment of taxes and submission of annual financial statements

By virtue of the Act the deadlines for declaring and payment of the corporate tax and other types of taxes under the Corporate Income Tax Act are extended until 30 June 2020. The rules and procedures for advance payments of corporate tax are also changed.

The deadlines for submission of the annual tax returns and payment of the income taxes due under the Personal Income Tax Act are equally extended.

The deadline for filing of annual financial statements for 2019 is extended to 30 September 2020, whereas the deadline for filing of declaration for lack of activity is extended to 30 June 2020.

We will provide you with a more detailed information on the above changes in the upcoming days.

Developments in the relations between employers and employees 

The Act and the introduced amendments to the Labor Code provide for new rights to employers and employees related to the declared state of emergency.

Employers will be entitled to assign the performance of remote work (home office) and teleworking without the consent of the employees to whom such type of work is assigned.

Additionally, as per the Act employers may, at their discretion, suspend the work of their entire enterprise, or parts thereof or only of certain employees. Employers may also reduce the working hours of the employees working full time.

Employees may be provided with up-to ½ of their annual paid leave without their consent and at the discretion of their employer. At the request of certain categories of employees, employers are obligated to allow the use of annual paid leave or unpaid leave, respectively.

The new amendments also prescribe the remuneration due to the employees in the different cases of suspension of work.

For the period of the state of emergency but for no more than three months, employers and other insurers will be entitled to receive 60 % of the insurance income of their respective insured persons for January 2020.

The remaining 40 % will be borne by the insurers. In case the insurers have not paid the full amount of the employment remuneration due to their employees, they will have to reimburse the funds received with regard to said employees.

The above funds shall be paid to insurers by the National Social Security Institute. The criteria which insurers should meet to receive funding will be determined by virtue of an act of the Council of Ministers.

As to date, a draft of Decree for determining the conditions and procedure for payment of compensations to employers which have suspended work due to the state of emergency has already been prepared and its adoption is pending.

Amendments to the Social Security Code

The introduced amendments to the Social Security Code will remain in force during the period of the state of emergency.

Some of the amendments provide for suspension of the statutory terms applicable to insured persons and related to the payment of the different types of compensations and pensions under the state social security.

As a requirement, all applications, appeals and other documents concerning the above payments will be submitted via electronic signature, a licensed postal service or via a personal identification code.

Any failure on behalf of the National Social Security Institute’s officials to review and resolve on the above applications within the prescribed deadlines will not be considered as tacit refusal within the meaning of the Administrative Procedure Code.

Changes related to issued identity documents and residence certificates

In accordance with the Act, the term of validity of the following documents is extended with six months:

  • identity cards and driver’s licenses provided that their term of validity expires during the period from 13 March until 31 October 2020
  • residence certificates of foreign nationals who have been granted permanent residence, long-term residence in the EU, long-term residence as family members of EU citizens or citizens of the EEA or the Swiss Confederation, provided that the term of validity of such residence documents expires during the period from 13 March until 31 October 2020

The amendments to the Foreign Nationals in the Republic of Bulgaria Act provide for relief measures in the procedures applicable to foreign nationals whose certificates for long-term residence are set to expire during the period of the state of emergency. For example, such foreign nationals are allowed to enter the country without a visa.

Other important developments

As per the Act, the issuance of bank account, pension and employment remuneration preservation orders with regard to natural persons is suspended. Inventories of movable or immovable property owned by such persons is also suspended. Some exceptions are prescribed in the Act.

Another important provision of the Act states that for the period of the state of emergency the legal consequences associated with non-performance of monetary obligations of private parties will not apply. As per this provision in case non-payment under an agreement the respective party will not be obligated to pay default interest or penalty, while the counterparty will not be entitled to rescind from the agreement.

Notary proceedings are limited. On 22 March 2020 the Notary Chamber published a list of notaries on stand-by who will ensure the performance of urgent notary certifications.

How can we help?

The team of KPMG remains at your disposal for any inquiries or need of assistance you may have related to the interpretation and application of the Act and the changes introduced therewith.

© 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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