What you risk by not knowing Bulgarian law when doing business

They will also tell you about opportunities that may be unknown to business owners unfamiliar with Bulgarian realities.

Because they do not know local legislation, many entrepreneurs in Bulgaria unwittingly break the law and have to pay fines. Let us look at the most common mistakes made by novice businessmen and simply by company owners.

Declaration on the commencement of activity

Holders of a residence permit in Bulgaria do not always find it convenient to register a car in their own name. A convenient alternative is to open a company and buy the car in its name. Many people do exactly that, without considering that such a purchase counts as the commencement of the legal entity’s activity, and that the corresponding declaration therefore has to be filed with the National Revenue Agency (NAP).

A similar document is drawn up when a land plot is purchased, and in other situations where the company concludes transactions of some kind. Unfortunately, not all accountants warn company owners about this.

In addition, the funds for buying movable and immovable property in the company’s name have to appear in the company somehow and on lawful grounds, which its managers very often ignore. Usually payment is made by the individual, without any thought as to how this operation is to be linked afterwards to the accounts. Many forget about the limit on cash payments per counterparty per year, and a fine during an inspection becomes inevitable.

If accounting services in Bulgaria have been entrusted to an insufficiently qualified or conscientious specialist, that person may fail to inform the company owner of this obligation in time. And it is the owner who will have to answer for it.

Advance payments of corporate income tax

This mistake is made only by owners of operating companies. Complex formulas are used to calculate advance payments, taking into account the previous year’s results and the forecasts for the current one. Such a task can be handled by a competent accountant who has studied every nuance of the work in detail.

Here it is not enough to know how to calculate VAT in Bulgaria or how to charge social security contributions — you need a good grasp of all the subtleties of local law. Otherwise mistakes are possible, and they are punishable by fines.

Payment of social security contributions

This point also concerns operating companies. When managers pay social security contributions through internet banking, the company’s details — BULSTAT and name — appear automatically in the “payment to the budget” field. When paying social security contributions you also have to fill in the “задължително лице” field, where you enter the name of the company’s director and their personal foreigner’s number, and not the company name and EIK, which are often filled in automatically by default. Many people confuse the payment details and do not fill in these fields correctly. As a result, the money does not reach its intended destination.

For a company manager who pays social security contributions punctually, it comes as an unpleasant surprise to find that NAP lists them as a debtor. In such a situation you have to arrange a refund of the money and transfer it to the correct destination, but these procedures take up a great deal of time and energy. It is far better to transfer the money correctly straight away, without making mistakes.

How to avoid fines?

So what should company owners do — must they go off and acquire a new profession and spend day after day poring over books on accounting in Bulgaria? It is far simpler: you just need to find an experienced consultant and entrust your accounts to professionals who know every nuance of Bulgarian legislation. If you need accounting services in Bulgaria, contact Bulgarian Expert, and we will advise you on matters of any complexity and also take over the bookkeeping.

Accounting services for your company in Bulgaria.

Company registration in Bulgaria

Careful: accounting! The problems Russian-speaking businesspeople face in Bulgaria