January 2016 news in Bulgaria

New Accounting Act

From 1 January enter into force a the new Accounting Act. The basic concept of the law is syncing with Directive 2013/34 / EC.

The law introduces new criteria (common to all EU countries) for categorization of enterprises and economic groups.

Depending on the entity’s category, significant changes in the content and publicity of annual financial statements are provided:

·       Micro and small enterprises which are not subject to statutory audits will be able to compile an Annual Financial Statement (AFS), consisting only of condensed balance sheet and condensed statement of income and expenses.  Currently it is more than 95% of enterprises in Bulgaria.

·       The obligation of enterprises which are not subject to statutory audits to publish their AFS in the Commercial Register was eliminated.

·       The Annual Financial Statements can be drawn up by the owners of sole proprietors who file simplified accounts or partners / owners of micro-enterprises that are not operational during the year.

Public limited companies which do not have operation are not subject of statutory audit. Up to now all public limited companies had to prepare audit reports.

For the first time large companies that are entities of ”public interest” which employ more than 500 people will prepare a non-financial statement.

Fines for administrative violations have been increased, and new offenses were added, for example:

Art. 70. (1) The Director, who admits preparation of accounting documents and/or reporting of business transactions, which distort or pervert the property and financial condition of the entity or reporting fictitious or simulated transaction, including bribery of officials shall be fined from 500 BGN (250EUR) to 5,000 BGN (1 500 EUR), and impose penalty payments to the entity from 2,000 BGN (1 000 EUR) to 10,000 BGN (5 000 EUR)


The minimum wage was increased to 420 BGN from January 1, 2016

This is the lowest minimum inshurable income for the country. Minimum inshurable incomes related to different industries were increased by an average of 7.5% for 2016 compared to 2015.  Contribution rates and ration between employer and employee remain the same as in 2015.

The maximum insurable earnings threshold remains uncharged 2600 BGN.

Contributions for health insurance

After the change in the Health Insurance Act from the beginning of 2016, people uncovered by health insurance can recover it from the date of payment of all installments for a period of five years, not as it was until now 3 years.

Cash payments are limited to 10 000 BGN

From 1 January 2016 cash payments regardless of the type of currency are limited to 10 000 BGN. Up to now the minimum threshold was 15 000 BGN.

Advance tax on income of individuals

Personal income from Other sources (such as: interest on loans from local individuals, awards of games and participating in competitions etc.) will be quarterly taxed in advance, according to new amendment in PITA. Up to now these incomes ware taxed only on an annual basis by filing annual tax return. Companies or self-employed persons paying such income to individuals will have the obligation to withhold the tax.

News in payment of local taxes

Tax relief for buildings, acquired ”Certificate of energy efficiency” by renovation with public funds has dropped since the beginning of the year.

Declaration upon company termination

Entities have to declare their payable corporate tax when terminate the company. Declaration has to be filed in the same period of 30 days as the tax liability.

Transactions in government securities

From January 1, 2016 transactions with government securities executed on a regulated market will be subject to withholding tax pursuant to Art. 196 of CITA.


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