Fines for violations of accounting and tax legislation in Bulgaria

Violations of accounting legislation in Bulgaria can lead to serious financial penalties and penalties for both individuals and legal entities. Questions such as “What is the fine for not filing an annual financial report?”, “What are the deadlines for filing a GFO and a tax return?” and “What sanctions are provided for violations of the Accounting Act and the Value Added Tax (VAT) Act?” are essential for anyone who wants to comply with legal requirements. Failure to file annual financial statements on time, as well as tax evasion, can result in heavy fines, administrative penalties and even punitive measures.

Among the common sanctions are acts for failure to submit reports, fines for failure to pay VAT on time, as well as penalties for refusing to publish an annual financial report in the Commercial Register. The Law on Administrative Offenses and Penalties (ZNA) also establishes additional procedures and penalties for tax evasion and for undeclared e-shops, and failure to comply with the deadline for filing a GFO or tax return is subject to certain limitation periods and consequences.

In this article we will look at what fines and penalties are provided for various accounting violations in Bulgaria, how the deadlines and limitation periods under the Law on Accounting, VAT and other normative acts are applied, as well as what you need to know in order to avoid administrative sanctions and penalties.

What fines and penalties are imposed under the Accounting Act in Bulgaria?

According to Chapter Nine of the Accounting Act, administrative sanctions are imposed on enterprises and responsible persons for various violations related to accounting. To ensure compliance with deadlines, storage requirements and accountability, the law provides for specific fines for certain actions and omissions. Here are the main cases and the exact provisions:

Violation in the organization of accounting activities (art. 68)
A person who does not organize and manage the accounting activity of the enterprise in accordance with Art. 9 of the Accounting Act shall be punished with a fine of BGN 5,000 to BGN 15,000, and the enterprise shall be subject to a penalty of BGN 10,000 to BGN 20,000. In case of repeated violation, the fines are doubled to BGN 30,000 for the manager and BGN 40,000 for the enterprise. According to Art. 9, the manager is obliged to organize accounting in accordance with the principles of legality, comparability, periodicity and timeliness in order to ensure a true and accurate reflection of business operations and the state of the enterprise.
Violation in the storage of accounting information (art. 69)
A person who does not keep the accounting documents in accordance with the requirements of Art. 12 and Art. 13 is subject to a fine of BGN 500 to BGN 3500, and the enterprise to a property penalty of BGN 2000 to BGN 7000. According to Art. 12, primary accounting documents, registers and financial statements shall be kept for a period of 10 years from the beginning of the year following the reporting period. In case of repeated violation, the fines are doubled.
Violation in entrusting the preparation of financial statements (art. 70)
In the event that a person entrusts the preparation of financial statements to an unqualified person, in violation of Article 17, paragraph 1, he is subject to a fine of 500 to 3000 BGN, and the enterprise - to a property penalty of 2000 to 5000 BGN. Art. 17, para. 1requires that the financial statements be drawn up by persons with appropriate qualifications and registration, possessing the necessary knowledge and experience.
Failure to prepare financial statements and annual reports (art. 72)
A person who is obliged to prepare financial statements and annual reports according to Chapter Seven, Sections I-IV, and does not do so, is subject to a fine of 500 to 3000 BGN, and the enterprise to a property penalty of 2000 to 5000 BGN. Chapter 7 includes the requirements for the preparation of an annual activity report and a sustainability report. If an enterprise does not include a sustainability report or a consolidated sustainability report in its activity report, the fine is from BGN 1000 to BGN 3000, and the financial penalty for the enterprise is between BGN 2000 and BGN 15,000. In case of repeated violations, the penalties are doubled.
Failure to file declarations for payments to the government and corporate tax (art. 73)
Chapter Seven, Sections V and VI, obliges businesses to file returns for payments to the government and corporate tax information. If these documents are not submitted, a fine of 1000 to 3000 BGN is imposed, and the property penalty for the enterprise is between 2000 and 15,000 BGN. In case of repeated violations, the penalties are doubled.
Non-publication of financial statements and other documents (art. 74)
A person who fails to publish a financial statement, a sustainability report or an audit report within the time limits referred to in Article 38 shall be liable to a fine of BGN 200 to BGN 3000. According to Art. 38, the publication of these documents must be carried out by June 30 of the year following the reporting period. If this obligation is not fulfilled, a penalty of 0.1% to 0.5% of the net sales revenue for the reporting period is imposed, but not less than BGN 200.
Failure to comply with the requirements for independent financial audit (art. 75)
A person who does not assign an independent financial audit to an auditor registered under the Independent Financial Audit Act is subject to a fine of BGN 500 to BGN 5000, and the property penalty for the enterprise is from BGN 2000 to BGN 10,000. If the financial audit is assigned to a person who is not a registered auditor, the fines and penalties are the same (art. 76).
Other violations of the Accounting Act (art. 77)
For violations of the Accounting Act, which are not explicitly described, the person is subject to a fine of between BGN 200 and BGN 1000, and the property penalty for the enterprise is from BGN 300 to BGN 2000.

What are the penalties for not filing an annual financial report on time?

In case of failure to submit an annual financial report within the deadline required by law, the Accounting Act provides for specific penalties. According to Art. 74 of the Act, a person who fails to publish the mandatory financial statement, as well as an activity report, a sustainability report or an audit report, is subject to a fine in the amount of BGN 200 to 3000. The entity responsible for the publication may be sanctioned with a property penalty in the amount of 0.1% to 0.5% of the net sales revenue for the reporting period to which the report relates, and this penalty may not be less than BGN 200. The law also provides for a doubling of these fines and penalties in the event of a repeated violation, which is defined as a violation committed within one year from the entry into force of the criminal decree for the same type of violation. These provisions are intended to ensure the timely submission and publicity of financial statements in order to ensure transparency of the financial position and performance of undertakings.

What is the deadline for submitting an annual financial statement and are there any scenarios in which the deadline is automatically extended?

According to Art. 38 of the Accounting Act, the deadline for submission of the annual financial report (GFO) for enterprises in Bulgaria is until 30 September of the year following the reporting period. For traders within the meaning of the Commercial Law, this submission is made by applying for registration and submission for announcement in the commercial register. Non-profit legal entities should also submit their reports by that date to the register of non-profit legal entities. Other undertakings which are not obliged to file in the commercial register shall publish their accounts by means of an economic publication or on a website, access to which shall be free of charge and provided for a period of not less than three years from the date of publication.

In the law, there is also a hypothesis of automatic extension of the term under certain conditions. If the report is initially requested for publication within the period referred to in paragraph 1 (until 30 September) and the Registry Agency decides to refuse publication in accordance with Art. 22, para. 5 of the Commercial Register Act (the refusal is the result of a technical or formal error in the documentation), then upon re-submission of an application for publication within 14 days of entry into force upon refusal, the report shall be deemed to have been submitted on time. Thus, the law provides an opportunity to correct errors in documents, without this leading to administrative penalties for delay.

What are the fines and penalties for non-compliance with the VAT Act?

According to the Law on Value Added Tax (VAT), the fines provided for Bulgarian companies and individuals for various violations are described in Chapter Seven, “Administrative Criminal Provisions”. These include the following cases and penalties:

Violation of VAT registration obligations— If a person does not register within the VAT period, the fine for an individual is from 500 to 5000 leva, and for a legal person — a property penalty of 500 to 5000 leva (Art. 178, para. 1 of the GDPR).
Failure to submit or errors in reports-declarations and VIES declarations— Failure to submit or submit false information in a reference-declaration or VIES declaration shall result in a fine or pecuniary penalty in the amount of BGN 500 to BGN 10,000 (Art. 179 (1) and (2) of the VAT Act).
Unlawful deduction of tax credit— If the person wrongfully deducts a tax credit, the fine or property penalty is 25% of the wrongfully deducted amount, but not less than BGN 1000 for legal persons and BGN 500 for individuals (Art. 179, para. 3 of the VAT Act).
Violation of deadlines for submission of documents when goods are delivered within the EU— In case of non-compliance with the deadlines for submission of documents related to intra-Community supplies, a fine or financial penalty of BGN 500 to BGN 10,000 is provided (Art. 180 of the ZVAT).
Infringements related to the obligation to issue an invoice or other document— If a person does not issue an invoice or other required document, the fine is from 500 to 1000 leva, and in case of repeated violation — from 1000 to 5000 leva (Art. 181 of the ZVAT).
Using an Invoice with False Content— In case of establishing an invoice with false content, the fine or property penalty is from BGN 1000 to BGN 10,000 for a legal person or sole trader, and for an individual — from BGN 500 to BGN 5000 (Art. 182 of the VAT Act).

How are violations proven?

The documentation of violations under the Value Added Tax Act (VAT) is a process in which the competent authorities collect and evaluate evidence related to the non-fulfillment of the obligations provided for in the law. Infringements are usually proven by checking the accounts and records of the obligated persons — such as invoices issued and received, tax returns, tax invoiced and deducted registers, and VIES declarations in the case of intra-Community supplies. If violations are suspected, the authorities may require additional documents, clarifications and even carry out physical checks on the spot. In cases of wrongly deducted tax credit, evidence may include missing or incorrectly completed invoices and other accounting documents to confirm inaccuracies or irregularities.

Which authority has the right to sanction and impose fines?

Fines for VAT violations are imposed by the National Revenue Agency (NRA). Acts on the detection of administrative violations are drawn up by the inspectors and employees of the NRA, who monitor the fulfillment of obligations under the VAT, including the submission of the necessary documents within the specified deadlines and the accuracy of the data in them. On the basis of these acts, criminal decrees are issued by the authorized persons in the NRA, which determine the specific amount of fines or property penalties, depending on the type and severity of the violation, as well as whether it is a repeated violation. These administrative penalties are part of the general measures aimed at strict compliance with VAT rules and minimization of tax violations.

What fines and penalties are imposed for failure to file a tax return by a company?

According to the Corporate Income Tax Act (Corporate Income Tax Act), failure to comply with certain obligations and requirements by taxable persons entails the imposition of various fines and penalties. These sanctions are aimed at ensuring compliance with the legal requirements for reporting and declaring corporate income, as well as the fulfillment of obligations regarding the correctness and completeness of tax returns.

For specific violations of the law, the following penalties are provided:

In case of failure to file a tax return or submission of a declaration with false data, pursuant to Article 262a of the CPA, a financial penalty in the amount of BGN 3000 to BGN 5000 is imposed for the first violation, and in case of a repeated violation - from BGN 6000 to BGN 10,000.
In cases where a taxable person does not fulfill his obligation to keep a register of expenses, he is subject to a penalty under Article 263 of the CPA. The amount of the fine for a first violation is between BGN 100 and BGN 1000 for each violation, and in case of a repeated violation - between BGN 200 and BGN 2000 for each individual violation.
Those representing the taxable person who, by action or omission, commit violations of the provisions of the CPA shall be subject to fines pursuant to Art. 264. The fine varies from BGN 200 to BGN 1000, and in case of repeated violation - from BGN 400 to BGN 2000.
For failure to comply with the obligations to register or submit information within the prescribed time limits, severe penalties are provided. For example, for failure to submit a declaration or incorrect indication of data in the register, the penalty is from BGN 100,000 to BGN 200,000, and in case of repeated violation - from BGN 200,000 to BGN 300,000.

Penalties are imposed by the bodies of the National Revenue Agency (NRA) through the drafting of acts to establish violations and issue criminal decrees, in accordance with the Law on Administrative Offenses and Penalties.

When are we obliged to issue a fiscal note (cash receipt), what is it and what is the fine if we do not issue one?

According to the Law on Value Added Tax (VAT) and Ordinance No. H-18, the issuance of a fiscal voucher is mandatory when registering and accounting for sales of goods and services in retail outlets, this rule applies to almost all merchants making such sales, except for certain exceptions. According to Art. 3, para. 1 of Ordinance No. H-18, every person who carries out sales of goods or services in a commercial establishment is obliged to register and account for the sales made by issuing a fiscal receipt (fiscal note) from a fiscal device (FU) or a cash receipt from an integrated automated system of management of commercial activity (IASUT) D), except where the payment is made by bank transfer and other forms of electronic payment.

The fiscal receipt serves as an official document certifying the sale and payment made, and must include all mandatory requisites according to Art. 118 of the VAT. These requisites include identification details of the trader, date and time of issue, name and quantity of goods or services sold, value added tax and the total amount to be paid. It is important to note that the fiscal receipt must be issued immediately after the sale is made and its provision to the customer is mandatory.

For non-compliance with the requirement to issue a fiscal voucher, significant penalties are provided. According to Art. 185 of the ZVAT, the fine for an individual who has not issued a fiscal receipt is from 100 to 500 BGN in the case of a first violation and from 500 to 1000 BGN in the case of a repeated violation. For legal entities and sole traders, the penalty is from 500 to 3000 BGN in case of a first violation and from 1000 to 5000 BGN in case of repeated violation.

What is the fine for not filing a tax return by an individual?

According to the Personal Income Taxes Act (ZDDFL), individuals who do not file a tax return within the prescribed period or submit a declaration with false information are subject to various penalties. Here is a detailed overview of the main fines and penalties applicable for violation of the provisions of the GDPR:

Penalty for failure to file a tax return: If a natural person does not submit a tax return on time, he is subject to a fine of up to BGN 500, according to Art. 53, para. 1 of the GDPR. This sanction is provided for an initial violation. If the person does not re-submit a tax return in the next reporting period, the fine is doubled and reaches BGN 1000. Repeated violation is defined as a violation committed within one year from the entry into force of the criminal decree for the first violation.
A fine for misstated data or data leading to a lower amount of tax liability: In cases where the taxable person submits a tax return, but there is false or incomplete information in it, leading to the calculation of tax in an amount less than the due or unlawful exemption from tax, a fine of up to BGN 1000 is imposed for the first violation, pursuant to Art. 53, para. 2 of the GDPR. In case of repeated violation, the fine for the same act is doubled and reaches 2000 BGN.
Penalty for failure to file an annual return in the event of a freelance or other independent activity: Persons who carry out activities in the liberal profession, craft activity or other independent activity, but do not file an annual tax return, are subject to sanctions as provided for in Art. 54, para. 1 of the GDPR. The penalty for failure to submit a declaration in this case is a fine of up to BGN 500, and in case of repeated violation — up to BGN 1000.
Penalty for failure to file a declaration for certain circumstances: According to Art. 55 of the GDPR, in the event of a change in circumstances that lead to a change in the tax base or tax obligations of the person, the submission of a corresponding declaration is required. If the person does not submit the required declaration in these circumstances, a fine of up to BGN 500 is imposed, and in case of repeated violation the fine is doubled to BGN 1000.
Penalties for failure to comply with registration and reporting obligations: In the event that the taxable person does not fulfill his registration obligations, for example, for registration as a self-insured person or registration with the National Revenue Agency (NRA) when carrying out certain activities, fines are imposed. The amounts and terms of these penalties vary depending on the specific violation and the applicable provisions of the GDPR and the additional regulations.

All acts establishing violations under the ZDDFL are drawn up by the authorities of the National Revenue Agency, and criminal decrees are issued in accordance with the Law on Administrative Offenses and Penalties (ZNA).

What is the fine for an undeclared e-shop in Bulgaria?

Failure to declare an e-shop in Bulgaria is subject to sanctions under the Value Added Tax Act (VAT) and Ordinance H-18 of the Ministry of Finance. This ordinance requires all persons who carry out sales of goods or services through electronic stores to register these stores with the National Revenue Agency (NRA). The aim is to ensure transparency of activities and to ensure fair taxation of e-commerce revenues.

According to Ordinance H-18, the fine for an individual who does not declare his e-shop in time ranges from 500 to 5,000 BGN, depending on the circumstances and whether it is a first or repeated violation. For legal entities or sole traders, the penalty can be significantly higher — from 3,000 to 10,000 BGN. In case of repeated violation, as stated in the law, the fine is doubled, which can lead to serious financial losses for the business. In addition, upon detection of such violations, the supervisory authority may impose other sanctions, such as closing the store or blocking the online platform until all requirements are met.

To protect yourself from these fines, it is important to declare the e-store in a timely manner. The procedure involves submitting the necessary documents to the NRA, which indicate all the basic data about the e-shop — such as domain, platform, type of goods or services, as well as information about the methods of payment. For accuracy in the process and avoiding errors that can lead to penalties, it is advisable to seek assistance from an accounting specialist who is well versed in the latest requirements of the VAT and Ordinance H-18.

The team of “Elan Consulting” can help you with the entire procedure for declaring and preparing the necessary documentation for your e-shop, thus providing you with peace of mind and security that your business is in full compliance with the Bulgarian legislation.

How to protect yourself from a fine for accounting and tax violations in Bulgaria

In order to avoid fines and penalties for accounting and tax violations in Bulgaria, strict compliance with legal requirements and timely submission of all mandatory documents is necessary. Elan Consulting provides comprehensive support to businesses and individuals, offering services that facilitate planning, filing and reporting processes, thus helping to avoid administrative offenses and fines.

One of the key factors to protect against fines is compliance with all deadlines for submission of annual financial statements (GFO) and tax returns. Failure or delay in submitting mandatory documents can lead to serious financial penalties. Elan Consulting provides services for strict monitoring of deadlines and notifies clients in a timely manner about upcoming deadlines, thus facilitating compliance with all legal requirements.

In addition, Correct and correct preparation of documentsIt is also essential to avoid sanctions. Incorrectly filled in data or inaccuracies in reports and declarations can lead to corrections, which are accompanied by fines. Elan Consulting provides expert assistance in compiling documentation, ensuring accuracy and compliance with applicable accounting standards and legislation.

In the presence of specific accounting issues or changes in activity that may affect tax reporting, consultations with the specialists of Elan Consultingare especially useful. For example, when expanding a business, changing its structure or entering new sectors, new tax obligations may arise. The Elan Consulting team helps identify these liabilities and offers optimal accounting and tax strategies, while preventing future potential violations.

The provision of proper organization and archiving of accounting documentsis also an important element in the prevention of sanctions. The law requires the storage of accounting documents for certain periods and easy access to them if necessary. Elan Consulting assists clients in organizing and archiving documentation, thus facilitating compliance with legal storage requirements.

Thus, Elan Consulting services assist clients not only in avoiding fines and sanctions, but also in full compliance with accounting and tax requirements in Bulgaria.