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Bulgaria: Guidance on publishing financial statements and sanctions for non-compliance released

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Panayiotis

Diallinas

Detailed guidance clarifying the obligations of legal entities for publishing annual financial statements was officially published by the Ministry of Finance of Bulgaria on June 6 2017. The instructions for the unified application of the respective provisions of the new Accountancy Act (in force since 2016) aims to more closely define the scope of the enterprises concerned, as well as the list of documents that need to be made public either in the Registry Agency or via other means, depending of the type of each enterprise.

The end of June 2017 was set as the ultimate deadline for publishing the annual financial statements and reports by all Bulgarian enterprises subject to reporting obligations under the new rules. The guidance outlined the specific requirements of the Accountancy Act for the individual financial statements, reports and decision of Bulgarian corporate entities, as well as those applicable for the consolidated financial statements of parent companies, including cases when the parent company is also a subsidiary company.

Special emphasis has been put on micro and small enterprises (companies with a net income from sales not exceeding BGN 200,000 ($122,000)) that could benefit from certain reliefs concerning the scope, structure and content of the annual financial report.

Additionally, following the current trend of economic development in Bulgaria and the increasing number of companies in liquidation or insolvency procedures, the guidance emphasises the obligations of such companies and their managing bodies. In additional to the different parts of the annual financial report as per the accounting standards, these companies also need to publish a notification and complete list of their obligations towards creditors.

It is worth noting that the administrative sanctions to be levied in the case of a late submission or non-submission of the annual financial reports has been increased significantly. The amount is now tightly dependent on the net income of the company for the respective period. The managers of the affected companies are subject to fines as well, which could range from BGN 200 to BGN 3,000.

In addition, the scope of the controlling functions of the tax authorities has been further widened. By July 31 of the current year, the Registry Agency will provide electronically to the National Revenue Agency a list of businesses that have not published their annual financial statements for the previous year within the statutory deadlines. By September 30 this year, the National Revenue Agency will conduct checks with regards to the publication of annual reports and will define violations.

The ministry-issued guidance on the publication of financial statements under the Accountancy Act gives clear instructions on the publication of the financial reports and the application of the Accountancy Act.

Panayiotis Diallinas (panayiotis.diallinas@eurofast.eu)

Eurofast Bulgaria Office

Tel: +359 2 988 69 75

Website: www.eurofast.eu

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