All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Bulgaria changes calculation method of penalties for not publishing financial statements

The publication of annual financial statements (AFS) in the trade register is often neglected by Bulgarian trading enterprises.

varbanov.jpg

Petar Varbanov

This is partly due to the lack of effective penalties imposed by authorities over the years. However, the latest changes affecting the publication of financial statements aims to remedy this situation.

Effectively, all companies are required to submit their AFS to the trade register by June 30 of the year following the reporting year. Until recently, the deadline for joint-stock companies' reports was July 31, which means the audits of their financial statements required an earlier completion this year.

Small enterprises, which are not subject to statutory independent financial audits, are not required to publish their income statements and management reports. However, they still need to publish their financial statements, but have the right to not disclose all content.

The most substantial legislation change is the method of calculating the penalty for not publishing financial statements. Rather than a fixed penalty, enterprises are now penalised with a pecuniary sanction ranging from 0.1% to 0.5% of the net sales revenue for the reporting period. This may result in excessive fines if the company's net sales revenue is high. For companies with low net sales, the change may be positive as the penalty imposed might decrease compared to previous years.

An important point to note is that, in addition to the penalty imposed on the company, the individual who fails to publish the financial statements (typically the company's director) will be fined with a penalty ranging between €100 ($112) and €1,500. In the event of repeat violations, the fine or pecuniary sanction will be doubled.

Branches of foreign companies

Branches of foreign entities are obliged to publish the audited financial statements of the parent company in the trade register.

There is no specific deadline for this publication because the statements of the parent company are subject to rules that are outside the control of Bulgarian legislation. It is, nevertheless, recommended that publication is organised as early as possible after the statements of the parent company are duly adopted, approved and published in the country of establishment.

Petar Varbanov (petar.varbanov@eurofast.eu)

Eurofast Bulgaria Office

Direct tel: +359 2 988 69 75

Website: www.eurofast.eu

More from across our site

Multinational enterprises run the risk of hefty penalties if the company in question fails to register for VAT when providing electronic services in South Africa.
Tax directors have urged companies to ensure they have robust tax risk management controls when outsourcing tax functions.
Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree