License for a spirits distillation facility in Bulgaria

The license and registration of establishments for distillation of spirits are topics that cause many questions among owners and entrepreneurs in Bulgaria. “What are the necessary documents for registration of an object for the distillation of spirits?” “Is it legal to have and use such an object for distillation?” “What are the licensing conditions and are there any special requirements for the design of a spirits distillation facility?” These are just some of the topics that excite both new and already active people in this business.

Registration and licensing of spirits distillation points is subject to a number of regulatory requirements laid down in various regulatory acts. Legislation determines the need to provide specific documents and compliance with regulations to ensure the legality of this activity. For example, the project of a distillery site and its compliance with the requirements of the legislation play a key role in successful registration. At the same time, penalties for illegal distillation of liqueur, as well as opportunities for reporting violations, are important aspects that everyone engaged in this activity should know.

“How much does it cost to license a distillation facility or a mini liqueur distillation facility?” and “What are the fines for violations of the rules?” are also questions that are often asked. It is necessary to clarify what the specific steps for registration are, what the project approval process involves and what measures are necessary to avoid sanctions, such as signals of illegal distillation of liqueur.

In this article we will examine these issues in detail, while explaining how Elan Consulting can provide professional support in Sofia, Burgas, Pomorie, Nessebar, Karnobat, Sozopol and other cities to ensure successful licensing and compliance with the law in this sector.

What constitutes an object for distillation of spirits within the meaning of Bulgarian legislation?

According to Bulgarian legislation, a spirits distillation point, also known as a “spirits distillation facility”, is an object or facility in which the distillation process of ethyl alcohol (spirits) takes place. The Excise and Tax Warehouses Act (ZADC) provides a detailed definition of the objects in which distillation is carried out, categorizing them by types and requirements.

According to Art. 4, item 8 of the ZADC, a “specialized small distillation facility” is an object that Simultaneously:

• is legally and economically independent;
• has a total capacity of the vessels up to 1000 liters inclusive;
• produces ethyl alcohol (liqueur) from grapes and fruits — own production of individuals, for their personal and family consumption, up to 30 liters per year per family.

Additionally, Articles 24 and 25 of the Regulations for the Implementation of the ZADC specify that these objects must be registered and their licensing depends on compliance with safety and control requirements on excise goods.

Any spirits distillation facility that does not meet these conditions is considered unregulated and subject to penalties, including fines and confiscation of equipment. Legislation ensures that alcohol production is carried out in accordance with safety standards in order to prevent abuse and health risks.

The law says “hectoliter” - what does it mean?

The term “hectoliter” means a volume equal to 100 liters. This is a standard unit of measurement, often used in legislation related to the production and control of excise goods, including alcohol, but mainly wine, not liqueur.

One 400 liter distillation facility how many hectoliters is and does it need to be registered by law?

One distillation unit with a capacity of 400 litersis equivalent to 4 hectolitersbecause: 400 liters÷100=4 hectoliters.400liter÷100=4hectoliters.

According to Art. 4, item 8 of the Excise and Tax Warehouses Act (ZADC), a “specialized small distillation facility” can have a total capacity of vessels up to 1000 liters inclusive. Therefore, a distillation plant with a capacity of 400 liters falls within the permissible limits for registration as a specialized small object.

The site must be registered if it is used for the distillation of ethyl alcohol, regardless of its capacity as a “specialized small distillation facility”. However, if the point exceeds the requirements for a total capacity of the vessels up to 1000 liters, then it should also be registered as a tax warehouse!

Exceptions

There are specific exceptions referred to in Art. 4, item 8 of the ZADC, which relate to individuals producing liqueur for personal and family consumption. In these cases:

• The total capacity of the dishes on the site should be up to 1000 liters;
• The ethyl alcohol produced must not exceed 30 liters per year per family.

If these conditions are met, the object can be considered for exempt from the licensing requirement as a tax warehouse, but must still be registered.

What are the requirements for registration of a small spirits production facility in Bulgaria?

The registration of a small distillation facility, known as a specialized small distillation facility, is an important process that ensures the legality of the activity and control over the production of ethyl alcohol in Bulgaria. The procedure is regulated in the Excise and Tax Warehouses Act (ZADC) and the Regulations for its implementation, as well as in the Law on Wine and Spirits, covering a number of steps and requirements.

Registration of a spirits distillation facility under the Wine and Spirits Act

First of all, persons who may be involved in the production of spirits, including liqueur, must be registered under the Trade Law, the Law on Cooperatives or similar legislation of another EU Member State. In addition, once they acquire commercial quality, these persons are entered in a public register of producers of spirits, distillates and spirits, which is maintained by the Ministry of Economy, Energy and Tourism. The register contains a special section on “Small distillation facilities” intended for the production of liqueur (Art. 40, para. 3 of the Law on Wine and Spirits).

Manufacturers are obliged to provide technological equipment that meets the established specifications and standards. According to Art. 40a, para. 1, the production of alcohol and spirits is carried out in accordance with certified technical specifications. Certification is carried out by authorized officials who certify that the specifications meet safety and quality standards.

Distillation facilities must be put into operation in accordance with the Spatial Planning Act and be equipped with the control mechanisms referred to in Art. 43h. In addition, it is mandatory to keep logs of the production process, in which all the key parameters for quality control and the origin of the production are entered (art. 43b and art. 43c).

Equipment that is used for distillation must be legally acquired, and manufacturers are obliged to provide documents on its origin. This includes a purchase from a licensed supplier or participation in a public sale (Art. 43h, para. 3).

Technological requirements include:

• Ensuring the physical separation of distillation and wine-making facilities (Art. 43h, para. 3, item. 3).
• Maintaining minimum standards for alcohol content in products, depending on their intended use (art. 43r, para. 1, item 1). 2).

Manufacturers who do not meet the registration requirements or use equipment that is not certified are subject to penalties. Failure to register in the register of producers of spirits, distillates and spirits is punishable by a property penalty in the amount of 1500 to 5000 leva (Art. 75b of the Law on Wine and Spirits).

The system of requirements and control mechanisms ensures the safety of the production process and the quality of the spirits produced, while ensuring effective tax and excise control over the sector.

Registration of a specialized small distillation facility under the Excise and Tax Warehouses Act

Secondly, persons wishing to register such an object must submit a request to the director of the territorial directorate of the Customs Agency at the location of the object. This requirement is regulated in Art. 57, para. 2 of the ZADC. The request can also be submitted electronically if the technical requirements for this are met.

Certain documents are necessarily attached to the request:

• technical reference for production sites and warehouses, including a description of the technological equipment and vessels with their volume;
• a copy of the permit for the commissioning of the site or other document certifying its purpose;
• declaration of compliance with the requirements of Article 4, item 8 of the ZADC;
• a list of persons responsible for the production process to certify their compliance with the Law on Wine and Spirits;
• a document proving the origin of the distillation equipment, where this is required in accordance with Art. 57, para. 3 of the ZADC.

After submitting the documents, the director of the territorial directorate checks their completeness and compliance with the requirements. If irregularities or omissions are found, the applicant is notified within 14 days and given the opportunity to remedy the deficiencies within the same period (Art. 57, para. 4 of the ZADC). Failure to comply with this condition may result in the termination of the proceedings, which is subject to appeal.

With correctly filed and complete documents, within 14 days the director issues a certificate of registration. This certificate entitles the applicant to start his activity from the date of its service, in accordance with Art. 57, para. 10 of the ZADC. However, if grounds for refusal are established, the applicant receives a reasoned decision, which can also be appealed under the procedure of the Code of Administrative Procedure.

All registered objects are entered in a public register maintained by the Customs Agency, which ensures transparency and control over the activity.

What are the requirements for the equipment and personnel of the distillation facility?

The requirements for the equipment and personnel in the distillation facilities are regulated in detail in the Excise and Tax Warehouses Act (ZADC) and the Wine and Spirits Act (VVSN). They cover both the technical aspects of the equipment and the qualifications and duties of the personnel involved in the production process.

Equipment requirements

Distillation sites must be equipped with certified and approved facilities. According to Art. 127 of the ZVHS, vessels and equipment for the production, storage and processing of spirits must be made of materials allowed for contact with food products and ensure the safety of the process. This includes:

• Sized vesselsequipped with means for measuring the level of liquids to allow accurate determination of the volume at a given temperature (Article 56 of the ZADC).
• Means of measurement and controlwhich shall record simultaneously the volume in litres, the alcoholic strength at 20°C and other relevant indicators. Alcohol meters or calibrated instruments may be used to measure the alcohol content, which must be in working order and regularly checked (Art. 57, para. 5 of the ZADC).
• The equipment must be acquired from a licensed supplier or through a public sale, and the documents of origin must be kept and presented during inspections (Art. 43h, para. 3 of the SAA).

Requirements for personnel

The qualification of personnel corresponding to the requirements of the Law on Wine and Spirits means that the persons involved in the production process must have the knowledge and skills necessary for the safe and quality production of spirits. This includes knowledge of technological and sanitary-hygienic requirements.

Proof of qualification shall be made by:

• provision of documents for completed education or professional training related to the production of spirits;
• presentation of certificates from courses or specialized trainings in distillation and production process management.

According to Art. 43c, para. 1 of the SAA, the persons leading the production process must be entered in a list of the three names and personal identification number submitted to the competent authority. They must have a qualification corresponding to the requirements of the Wine and Spirits Act.

Producers are also obliged to keep technological logs in which to record all activities carried out at the site, including the raw materials used and the quantities produced (Art. 43h, para. 5 of the SAA). This requirement is intended to ensure transparency and the possibility of control by the competent authorities.

Control and monitoring

All measuring instruments and equipment are subject to regular control and metrological inspection in accordance with the requirements of the ZADC (Art. 57, para. 4). The implementation of technological and sanitary and hygienic requirements is checked by the customs and economic authorities, which also exercise control over the compliance of production processes with the approved specifications (Art. 43g of the SAA).

These requirements ensure not only the legality of the activity, but also the high quality of the products produced, protecting the interests of consumers and controlling the collection of excise duties.

What are the necessary documents for registration of an object (distillation facility) for the production of liqueur?

Registration of an establishment for the production of liqueur (specialized small distilling facility) requires the provision of a set of documents, according to the Excise and Tax Warehouses Act (ZADC) and the Wine and Spirits Act (VVSN). Here is a detailed description of the required documents with precise legal grounds:

1. Application for registration: The request is submitted to the director of the territorial directorate of the Customs Agency at the location of the object. It can also be submitted electronically if it meets the requirements for electronic services (Art. 57, para. 2 of the ZADC).
2. Technical reference: The reference must describe the production sites and warehouses, including a full description of the technological equipment, vessels and their volume (Art. 57, para. 3, item 2 of the ZADC; Art. 43h, para. 3 of the SAA).
3. Commissioning document: A copy of the permit for the commissioning of the site or other document certifying its purpose, issued by the competent authority in accordance with the Law on Spatial Planning (Art. 57, para. 3, item 3 of the ZADC).
4. Declaration of Conformity: Declaration that the object and the activity comply with the requirements of Art. 4, item 8 of the ZADC, including compliance with the limits on volumes and purpose of production (Art. 57, para. 3, item 7 of the ZADC).
5. Equipment origin document: Proof that the equipment was purchased from a licensed manufacturer or through a public sale, as required under Art. 43h, para. 3 of the ZVSN.
6. List of staff: List of the three names and personal identification numbers of the persons who lead the production process, in accordance with the requirements of the Law on Wine and Spirits (Art. 43c, para. 1 of the SAA; Art. 57, para. 3, item 8 of the ZADC).
7. Personnel qualification documents: Documents certifying the qualifications of technologists and those responsible for the production process, such as diplomas, certificates or certificates of completed training (Art. 43c, para. 1 of the SAA).
8. Document for paid fee: Receipt or other document certifying the paid registration fee according to the tariff of the Ministry of Finance (Art. 57, para. 3, item 9 of the ZADC).
9. Certificate of commercial registration: Current certificate of entry in the Commercial Register, which proves that the person is registered as a trader or a cooperative (Art. 43h, para. 3, item 1 of the ZVSN).
10. Technical specification: Certified technical specification of the production process, prepared in accordance with the requirements of Art. 40a, para. 1 of the SAA.
11. Registration under the ZADC: For producers who plan to produce volumes subject to excise duty, registration as an excise warehouse keeper is mandatory (Art. 47, para. 1 of the ZADC).
12. Production logs: Application for registration and keeping of technological logs, in which all stages of production will be entered (Art. 43h, para. 5 of the SAA).
13. Declaration of absence of infringements: A declaration that the manufacturer has not committed violations related to the illegal production of spirits in the last 12 months (Art. 43h, para. 3, item 8 of the Code of Civil Procedure Code).
14. Sketch of production premises: A plan showing the physical location of the equipment and warehouses to ensure that the sites are separated from other activities, such as winemaking (Art. 43h, para. 3, item 3 of the SAA).

The provision of all these documents ensures that the distillation facility will be registered in accordance with legal requirements, while ensuring control over the safety and quality of production.

How much does it cost to open a business with the production of liqueur?

Starting a spirits production business requires a significant investment in equipment, which varies depending on the chosen scale of production and the type of technology to be used. The main component in the equipment is an object for the distillation unit, its choice depends on the materials, capacity and functions it offers.

Classic copper object for distillations and distillation are among the preferred models because copper has excellent properties to absorb undesirable compounds during the distillation process. Prices for a distillery site with a capacity of about 100 liters vary between 2000 and 2500 BGN. A distillation facility with a capacity of 200 liters can cost between 3500 and 4000 BGN. Copper distilleries often also include accessories such as coolers and thermometers, which increase their efficiency and precision in operation.

A more affordable alternative is the object for stainless steel distillations, which are also durable and easy to maintain. Such models can be found at prices from about 400 to 800 BGN for a volume between 50 and 100 liters. They are often preferred by novice growers or by those looking for a lower initial cost.

An interesting and modern option is the object for column distilleries, which offer greater precision and efficiency in distillation. They allow repeated rectification of alcohol, which leads to a higher purity and quality of the final product. The prices of a distillation plant with a column start from around BGN 3000 for models with a capacity of 100 liters and can reach over BGN 10,000 for larger and more complex systems with automated functions.

Additional equipment costs include fermentation vessels, which can be made of plastic, stainless steel or glass, with prices ranging between BGN 50 and BGN 500 depending on the size and material. Coolers, hydrometers, alcohol meters and other quality control instruments are also required and can cost between 200 and 1000 BGN, depending on the complexity of the system.

The choice of equipment should be made in accordance with the planned volume of production, as well as the target market. Investing in quality equipment not only facilitates the process, but also ensures better quality of the final product. Due to the complexity of the technological choice and the variety of models available, it is advisable to consult with specialists in the field who can help in the right choice and cost optimization.

What is the administrative cost of a legal liqueur production facility in Bulgaria?

The opening of a facility for the legal production of liqueur requires the covering of a variety of administrative, technical and registration fees, regulated in two key tariffs: Tariff No. 12 of the Ministry of Financeand The tariff for state fees to the Ministry of Economy. These fees are mandatory for the implementation of the activity, ensuring compliance with the legislation under the Excise and Tax Warehouses Act (ZADC) and the Wine and Spirits Act (VVSN). In addition, consulting support from companies such as Elan Consulting can facilitate the registration process, with the cost of services individually determined depending on the complexity of the project and the necessary documents.

Below are all the possible fees that should be foreseen:

• 200 BGN— for the issuance of a certificate of registration of a specialized small distilling establishment (Art. 57, para. 3 of the ZADC).
• 20 BGN— to issue a duplicate certificate.
• 50 BGN— to record changes in the circumstances related to the registration of the object.
• 50 BGN— for registration of measuring and control devices, including alcohol meters, calibrated vessels and counters (Art. 56 of the ZADC).
• 30 BGN— for the certification of measuring instruments used to control the quantities of alcohol produced.
• 14,40 BGN— for physicochemical analysis to determine the alcoholic strength of a sample.
• 18,00 BGN— for the analysis of methanol in a sample.
• 24,00 BGN— for the analysis of higher alcohols in a sample.
• 100 BGN— for entry in the public register of objects maintained by the Customs Agency.
• 200 BGN— to inspect the site on the spot before registration carried out by inspection bodies.
• 100 BGN— to issue a decision to dispose of a manufactured product where the production is not released for consumption.
• 50 BGN— to appeal refusals or other administrative actions.

From The tariff for state fees to the Ministry of Economy:

• 1080 BGN— for registration of producers of spirits (liqueur) in the register of the Ministry of Economy and issuance of a certificate of registration.
• 120 BGN— to record changes in the circumstances relating to the registration of producers of spirit drinks.
• 1180 BGN— to register a new spirit drink with a geographical object for distillation.

Additional costs may arise for:

• Permission to put the site into operation, which depends on the local municipal authorities and their tariffs.
• Preparation and certification of documents related to the purpose of the object (for example, building permits or technical projects).
• Preparation of technical specification of equipment and production process.

The combination of these costs determines the final cost of the registration of the object, the exact amount depends on the specifics of the object and the services requested. For accuracy and convenience, Elan Consulting offers assistance at every stage, which ensures peace of mind and guarantees compliance with all legal requirements.

Combining all these factors, the initial investment for opening a business for the production of liqueur can vary significantly:

• Minimum costs(when using a stainless distillation facility and limited administrative costs): approx. 5000—7000 BGN.
• Average cost(when selecting a copper distillation facility with additional equipment and full administrative fees): approx. BGN 10,000—15,000.
• Maximum costs(when selecting a distillation object with a column, larger capacity and all possible additional costs): above 20 000 BGN.

The amount of investment required depends on the specific business plan and the scale of production. A specialized approach, consultation with specialists and the selection of appropriate equipment are key to a successful start of the activity. Elan Consulting can help at every stage of the process — from planning and registration to ensuring full compliance with legal requirements, while optimizing costs and simplifying administrative procedures.

What are the fines for the production of liqueur without a license?

The production of liqueur without the necessary registration and license constitutes a serious violation of the Excise and Tax Warehouses Act (ZADC), and according to the legislation this is subject to an administrative object for distillation, including fines, property penalty and confiscation of illegally produced goods. Here are the detailed statements about the fines in accordance with the ZADC and the Wine and Spirits Act (VVSN):

1. Lack of registration: A person who does not register under the ZADS is punished with a property penalty from 500 to 3000 BGN(Art. 108, para. 1 of the ZADC).
2. Excise duty payable: In addition to the above, the offender also owes the amount of the unassigned excise duty for the excise goods produced until the date of detection of the violation (Art. 108, para. 2 of the ZADC).
3. Identification of deficiencies: Upon detection of missing excise goods, the offender shall be punished by a pecuniary penalty in the amount of excise duty due for the missing goods, but not less than 500 BGNand in the event of a repeated infringement, in double the amount of excise duty payable, but not less than 1000 BGN(Article 112b of the ZADC).
4. Holding and selling illegally produced excise goods: A person who holds, offers, sells or transports excise goods without the necessary documents is subject to a fine of double the amount of excise duty due, but not less than 1000 BGNand in the event of a repeated infringement, not less than 2000 BGN(Article 126 of the ZADC).
5. Withdrawal of goods: All illegally produced excise goods, as well as the means of their production, are confiscated in favor of the state, regardless of their ownership (Art. 124, paras. 1 and 2 of the ZADC).
6. Deprivation of the right to activity: In case of an established violation, the person is deprived of the right to exercise a certain activity for a period of 1 month, and in case of repeated violation - for a period of 2 to 6 months (Art. 124a, paras. 1 and 2 of the ZADC).
7. Sealing the object: The violator is subject to a forced administrative measure sealing the object for a period of 1 month, and in case of repeated violation - from 2 to 6 months (Art. 124b, para. 1 of the ZADC).

These sanctions are complemented by the provisions of the Law on Wine and Spirits, which provides for additional measures and fines for violations related to the illegal production of alcoholic beverages. Manufacturers who do not meet the registration requirements or use equipment that is not certified are subject to penalties. Failure to register in the register of producers of spirits, distillates and spirits is punishable by a property penalty in the amount of 1500 to 5000 leva (Art. 75b of the Law on Wine and Spirits).

What is the excise duty payable in the legal production of liqueur?

The excise duty payable on legally produced liqueur depends on whether the spirits is produced in a standard or a specialised small distillation facility. According to Art. 31, para. 1 of the Excise Duties and Tax Warehouses Act (ZADC), the excise rate for ethyl alcohol is determined as follows:

1. For ethyl alcohol (including spirits) produced in a standard production facility, the excise rate is 1100 BGN for 1 hectoliter of pure alcohol.
2. For ethyl alcohol (spirits) produced in a specialized small distillation facility, the excise rate is reduced and amounts to 550 BGN for 1 hectoliter of pure alcohol.

To calculate the excise duty, it is necessary to take into account the concentration of alcohol in the spirits produced. For example, one hectoliter of pure alcohol contains 100 liters of alcohol with 100% alcohol content. In the production of liqueur with 40% alcohol content, this corresponds to 250 liters of liqueur. In this case, if the spirits was produced in a standard facility, the excise duty would be 440 BGN per 100 liters of liqueur, and if it was produced in a specialized small distilling facility, the excise would amount to 220 BGN for the same quantity.

In addition, the legislation provides for exemption from excise duty on liqueur produced by individuals for personal consumption within the family, provided that no sale is carried out. This exemption is regulated in paragraph 3 of Art. 31 of the ZADC and is intended to stimulate domestic production for personal use, while limiting unregulated trade. Compliance with these excise rates and conditions is essential to avoid penalties and to maintain the legal activity of producers.

How is the accounting of a small object for the distillation of liqueur?

Accounting of a small spirits distillation facility is a complex process that requires strict adherence to current legal regulations, including those in the Accounting Act and National Accounting Standards (NSS). This includes accurate accounting of expenses, revenues, produced and realized quantities of production, as well as accounting for excise duty and other tax liabilities. It is therefore of particular importance that small producers understand their obligations, as well as the need to consult specialists in the field.

According to the Law on Accounting, every business entity is obliged to maintain complete and faithful accounting, reflecting all income, expenses, assets and liabilities. For small distilleries, this includes specific aspects such as the quantification of the liters of spirits produced, the alcohol content, as well as the payment and documentation of excise duty. Any deviation or error may result in significant penalties, including administrative penalties for the distillation facility and fines described in the Excise and Tax Warehouses Act.

National accounting standards provide that manufacturers must account for their inventories, including raw materials and materials used in production, as well as finished products. For small establishments, it is essential to closely monitor the cost of raw materials such as fruit, sugar and yeast, as well as energy and labor costs. It is also necessary to maintain clear records of sales, including invoicing, to ensure full transparency and compliance with tax requirements.

Note that excise taxes are an important part of reporting. Each small distillation facility is obliged to document the quantities of liqueur produced and calculate the excise duty due according to the provisions of the Excise Act. Any deviation from these requirements, including late submission of data or payment of excise duty, may result in significant financial penalties.

It is necessary to conclude that keeping accounting for a small distillation plant requires not only basic knowledge of accounting, but also an understanding of the specific requirements in the field of excise duties and production accounting. A consulting firm such as Elan Consultingcan be an invaluable partner in this process. We offer accounting, tax planning and management services, as well as consulting to ensure full compliance with the legislation. Our team guarantees an individual approach to meet the specific needs of each site, both in Sofia and in other cities such as Burgas, Pomorie, Nessebar and the whole of Bulgaria. Contact us to get professional support and make sure your business is in compliance with the law and has reliable financial reporting.

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