The declaration and fiscal control of the transport of goods with high fiscal risk (HIR) are important new elements in the management of international transport and trade activities, especially in the context of efforts to combat tax avoidance and smuggling. These processes are regulated by means of new amendments to the Tax and Insurance Procedure Code (DOPC) and the specialized Ordinance N-5 of 29.09.2023, which regulates the conditions and procedure for the implementation of fiscal control of the movement of such goods on the territory of the Republic of Bulgaria. With the increasing need for transparency and security, from January 3, 2024, the National Revenue Agency (NRA) introduced a new regime requiring mandatory prior declaration of data for shipments of goods with high fiscal risk, which includes transports starting from the territory of a third country and ending in Bulgaria, as well as those that are carried out entirely in the country.
The new declaration regime covers the transport of goods with a high fiscal risk carried out by means of transport over 3.5 tons, which start from the territory of another EU Member State and end on the territory of Bulgaria, as well as vice versa - from Bulgaria to another EU Member State. This represents an important step in strengthening customs controls and in measures to combat tax fraud.
To facilitate the declaration process, data on shipments are submitted through an electronic service accessible with a qualified electronic signature on the NRA Electronic Services Portal. When submitting the data, the NRA system generates a unique transport number (UNP), which must be communicated to the driver of the vehicle, the person accompanying the goods, the carrier, or the organizer of the transport. This mechanism not only increases transparency and accountability in the transport sector, but also supports the efforts of state authorities to ensure effective control and supervision of the transport of goods with high fiscal risk.
“Goods with high fiscal risk” is a term used to refer to goods that are often subject to tax evasion, especially in the context of VAT. These goods have been identified by the Revenue Administration as posing a risk to the tax system due to their high participation in tax avoidance schemes or other irregularities.
Examples of high fiscal risk commodities include:
The complete list of goods with high fiscal risk is approved by order of the Minister of Finance. This list is an important resource for tax and customs authorities, traders and carriers, as it provides clear guidance on goods that require increased attention and control when transporting them. Order No. ZMF - 1295 of 28.12.2023 is an important document in this direction, providing a list of goods with high fiscal risk with their corresponding codes under the combined nomenclature.
This list is vital to identify and prevent potential tax fraud, thereby strengthening the financial stability and security of the national economy. The list is updated regularly to reflect changes in trade patterns and to effectively combat tax fraud.
The mandatory declaration of goods with high fiscal risk is an important step taken by the National Revenue Agency (NRA) to strengthen fiscal control and counteract tax fraud. As of January 3, 2024, the NRA introduces a new regime for mandatory prior declaration of data on shipments of such goods.
The regime introduced by the amendments to the legislation concerns transports which:
Also, from 01.10.2023, the introduced regime for mandatory prior declaration of data pursuant to Art. 127i of the DOPC also covers the transportation of goods with high fiscal risk carried out by means of transportover 3.5 t.,who:
The data for such shipments are declared through an e-service accessible with a qualified electronic signature on the NRA Electronic Services Portal. When submitting the data, the system generates a unique transport number (UNP), which must be communicated to the driver of the vehicle, the person accompanying the goods, the carrier, or the organizer of the transport. The validity of the unique transport number is 14 days, and in the case of fiscal control, the driver of the vehicle must provide this number along with other mandatory documents.
For business convenience, the Agency provides XSD-schematics and a description of the form and structure of data for use of the service through a public application-program interface (API) or system-system communication. A test environment is to be provided for customers to verify the compatibility of their systems with the new service modules.
In 2024, it is planned to introduce a mandatory regime for data declaration and for shipments of SBRs (goods with high financial risk), which start from the territory of a third country and end on the territory of Bulgaria, as well as for those that begin and end on the territory of the country. The Revenue Administration will inform about the planned deadlines and stages of the implementation of the new functionalities in the existing electronic service and will provide a test period for customers.
The necessary documents and procedures for declaring goods of high fiscal risk vary depending on the route and characteristics of the transport. Here are the details of the different scenarios:
According to Article 8 of Ordinance N-5:
According to Article 9 of Ordinance N-5:
According to Article 10 of Ordinance N-5:
According to Article 11 of Ordinance N-5:
According to Article 12 of Ordinance N-5:
These procedures are important for the management and control of shipments of goods with high fiscal risk, which contributes to the prevention of tax evasion and the improvement of financial security.
Exceptions to the mandatory prior declaration of goods with high fiscal risk (HFCR) regime are important for understanding the scope and application of the relevant tax and customs regulations. Here is a detailed overview of the cases when it is not necessary to declare an SWOT:
1. Means of transport with a carrying capacity of up to 3.5 tons - Carriages carried out by means of transport with a carrying capacity of up to 3.5 tonnes are exempt from the obligation to declare the SWOT.
2. Transport by means of a means of transport with a carrying capacity exceeding 3,5 tonnes:
3. Transport by Water, Rail and/or Air Transport:
The exception applies to transport in which there is no overloading of the goods on the means of transport on the territory of Bulgaria.
These exemptions are intended to reduce the administrative burden on certain types of transport which are considered less risky in terms of potential tax evasion. They also facilitate the logistics and management of shipments that do not fall under the scope of high fiscal risk. The application of these exceptions is important for the effectiveness of fiscal control, while providing flexibility for businesses to manage their logistics operations.
The process of data correction and cancellation of declarations for goods with high fiscal risk is regulated in Ordinance N-5 and constitutes an important aspect of fiscal control management. According to Art. 15 of the Ordinance, when changes occur or errors are made in the submitted transport data to the SFRS, they may be corrected within the established deadlines for their declaration. This correction shall include an amendment to the relevant Annex indicating the corresponding unique consignment number (UNI). It is important to note that when correcting the data, a new UNP is not issued.
After the deadline for declaration and during the carriage itself, it is still possible to make certain adjustments. However, this is limited only to changes in the data on the vehicle number, the date, the expected time and the place of receipt or unloading of the goods. In cases of overload of the goods, the date, estimated time and place of the transhipment must be indicated. This allows flexibility in the management of transport operations, while ensuring accuracy and timeliness of information.
In case of cancellation of a shipment, when it does not take place, Ordinance H-5 requires that the submitted data for the carriage of goods with high fiscal risk be canceled. This is done in accordance with Art. 16 of the Ordinance, by submitting Annex No. 8. Cancellation is a critical process as it ensures that the data in the NRA system is accurate and up to date, contributing to the effective control and tracking of high fiscal risk goods in the transportation sector. Thus, by submitting corrections and canceling declarations, the system allows adequate coverage of real transport activity, ensuring compliance with regulatory requirements.
The control over the declaration of goods with high fiscal risk in Bulgaria is strictly regulated and includes both checks and possible sanctions in case of violations. Revenue authorities carry out fiscal control without the need for a prior written assignment. For this purpose, specialized fiscal checkpoints are created, where checks are carried out, and outside of them the means of transport are not subject to suspension for control purposes.
During fiscal control, drivers of means of transport are obliged to provide a unique transport number (UNP) obtained after the preliminary declaration of the carriage, as well as all relevant documents provided for in Article 13, paragraph 2 of the DOPC. This includes the driver's identity document, documents accompanying the goods and other necessary documents. In the event that an inspection reveals that the procedure for prior declaration has not been complied with, the UNP shall be issued ex officio by the controlling authorities.
Penalties may be imposed for violations, such as failure to comply with the procedure for prior declaration or the declaration of incorrect transport data to the IFRS. These include preliminary precautionary measures pursuant to Article 121a of the GDPR. These measures may include the imposition of a fine in the amounts specified in Article 278b, paragraphs 3 and 4 of the DOPA. According to these provisions, persons who do not fulfill their obligations under Article 127i, paras. 1 - 5, shall be punished by a fine or pecuniary penalty in the amount of 40% of the taxable amount of the transported goods, but not less than BGN 5,000. In case of declaration of false data, the fine or pecuniary penalty is calculated as 40% of the difference between the tax base of the goods established during the inspection and that of the declared goods, the minimum amount being BGN 1000.
The provision of Article 121a of the Tax and Insurance Procedure Code of the Republic of Bulgaria provides for specific measures that may be taken by the revenue authorities when carrying out fiscal control over the movement of goods with high fiscal risk.
These measures and sanctions are intended to ensure compliance with legal requirements and to protect against potential tax evasion related to the transport of goods with high fiscal risk. Correct and accurate reporting, together with strict controls and the imposition of appropriate sanctions for infringements, are key to maintaining order and security in the tax and customs sphere.
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