The new Bulgarian State of Emergency Measures Act regulates the measures and actions during the state of emergency declared by a Resolution of the National Assembly of 13 March 2020 due to COVID-19 pandemic. The Act applies until the lifting of the state of emergency.
The Law contains provisions regarding extension and suspension of deadlines, taxation, as well as measures in cases of non-performance and enforcement.
Taxation and annual reporting
The deadline for announcing of the annual financial statements, the consolidated financial statements and the annual activity reports for the year ended 31 December 2019 in the Commercial Register and the NGOs Register is extended until the 30th day of September 2020.
The term for submission of a declaration of lack of activity to the Commercial Register and the NGOs Register is extended until the 30th day of June 2020.
The annual financial statements for 2019 may be signed electronically. Where all signatures on the annual financial statement and the audit report are electronic signatures, the registered auditor may not affix the professional seal thereof.
The following terms are extended until the 30th day of June 2020:
- for submission of the annual tax return and payment of corporate income tax for 2019;
- for submission of the annual tax return and payment of the personal income tax for 2019. The extension is applicable only to the persons performing business activities under the Commercial Act, as well as sole traders and agricultural manufacturers;
- for payment of the expenses tax. The extension is applicable to the companies, persons performing business activities under the Commercial Act, as well as sole traders and agricultural manufacturers.
We underline that all other taxable persons under the Income Taxes on Natural Persons Act should submit their annual tax return and pay the due tax until 30 April 2020. As well, the deadlines for reporting and payment of the advance payments remain the same.
The deadline for advance payments under the Corporate Income Tax Act also remains the same. In order to determine the amount of this payments the following special circumstances shall be taken into account:
- where the annual tax return for 2019 was submitted until the entry into force of the State of Emergency Measures Act, the tax prepayments shall be made in an amount according to what was declared. If necessary, the taxable persons may submit an adjusting declaration;
- where the annual tax return for 2019 is submitted until the 15th day of April 2020, the tax prepayments shall be made in an amount according to what was declared;
- where the annual tax return for 2019 is not submitted until the 15th day of April 2020, the tax prepayments shall be declared by the standard form of the annual tax return form until the 15th day of April 2020, completing only the part of the said return concerning the declaration of tax prepayments for the current year.
As well, any persons who or which prepay the immovable property tax due for the whole year or the transport vehicle tax due for the whole year until the 30th day of June, shall enjoy a rate rebate of 5 %.
According to the State of Emergency Measures Act all other deadlines for establishment, reporting and payment of taxes and social insurance contributions remain the same. In addition, the deadlines for filing the VAT declaration and the terms for payment of the monthly VAT liabilities towards the budget are not prolonged.
Labour law rules
Under a declared state of emergency, the employer can order employees to work from home or teleworking without their consent.
As well, the employer may establish part-time work for the entire period of a declared state of emergency or for a part of the said period for the employees who work on a full-time basis.
The employer may issue an order discontinuing the work of the company, of part of the company or of separate employees for the entire period or for a part of the said period until the lifting of the state of emergency. Moreover, the employer have the right to grant the paid annual leave to the employees even without their consent, including to an employee who has not acquired an eight months labour experience. Note that the employers may grant up to a half of the paid annual leave to the employees without their consent.
On the other hand, the employer is obliged to allow the following employees to use a paid annual leave or an unpaid leave under a declared state of emergency:
- pregnant female employees, as well as any female employee in an advanced stage of in vitro fertilisation treatment;
- mother or female adopter of a child up to 12 years of age or of a disabled child irrespective of the age thereof;
- male employee who is a single father or male adopter of a child up to 12 years of age or of a disabled child irrespective of the age thereof;
- employees who has not attained the age of 18 years;
- employees who has lost 50 % and more than 50 % of their working capacity;
- occupational-rehabilitee employees.
For the time of discontinuing work, the employer shall pay the gross labour remuneration to the employees.
Suspension of terms and limitation periods
As from the 13th day of March 2020 and until the lifting of the COVID-19 state of emergency, the following terms and limitation periods are suspended:
- the procedural time limits in civil, arbitration and enforcement proceedings, with the exception of the time limits in criminal proceedings, under the Extradition and European Arrest Warrant Act, and proceedings involving supervision measures;
- the prescription periods provided for in statutory instruments upon the lapse whereof rights are extinguished or lapse or obligations arise for individuals, with the exception of the periods under the Criminal Code and the Administrative Violations and Sanctions Act;
- the time limits for compliance with instructions given by an administrative authority to parties or participants in proceedings, with the exception of proceedings under the Management of Resources from the European Structural and Investment Funds Act.
Until the lifting of the state of emergency:
- the absolute period of limitation on payment of public receivables under the Tax and Social-Insurance Procedure Code shall not apply;
- an enforcement proceeding under the Tax and Social-Insurance Procedure Code shall not be instituted, except where necessary to protect particularly important State or public interests or there is a risk of frustration or material impediment of the enforcement of the instrument, or where significant or irreparable harm may ensue from the delay of enforcement;
- the coercive enforcement under the Tax and Social-Procedure Code is suspended. The steps taken until the suspension remain in effect. After the suspension the public enforcement agent may not take new enforcement steps but may take steps to secure the claim, as well to distribute sums received under the enforcement case. The enforcement proceeding shall be resumed after the lapse of the period for which the state of emergency is declared. Prior to the lapse of the period of the state of emergency, the enforcement proceeding shall be resumed by order of the public enforcement agent at the request of the debtor, for enforcement against:
(a) claims and cash from banks;
(b) claims from third parties;
(c) valuables kept at safe-deposit vaults, including against the contents of safe-deposit boxes.
All other time limits and proceedings for ascertainment, declaration, remittance, securing and collection of any outstanding customs duties, taxes, including excise duties, compulsory contributions to the public social insurance funds, health insurance, the Teacher Pension Fund and the supplementary compulsory retirement insurance funds, State and municipal fees and other public claims, regulated in the Tax and Social-Insurance Procedure Code, the Customs Act, the Excide Duties and Tax Warehouses Act, the Value Added Tax Act, the Corporate Income Tax Act, the Income Taxes on Natural Persons Act, the Local Taxes and Fees Act, the Social Insurance Code, the Health Insurance Act and the Gambling Act remain the same.
Extension of time limits
The following shall be extended by one month as from the lifting of the state of emergency:
- the time limits set in a law, which expire during the state of emergency and involve the exercise of rights or the fulfilment of obligations by individuals;
- the effect of administrative acts which is subject to a time limit and lapses during the state of emergency.
Terms on payment of electric supply bills to natural persons are extended from 10 to 20 days.
Other protective measures
All public sales and coercive seizures of possession, announced by public and private enforcement agents, are also suspended. After the lifting of the state of emergency, the public sales and the coercive seizures of possession shall be scheduled anew without levying new fees and costs.
The State of Emergency Measures Act also provides that no preservation orders will be imposed on natural persons’ bank accounts, employment remunerations and pensions. An inventory shall not be taken of movable and corporeal immovable property owned by natural persons, except for maintenance obligations, for damages sustained as a result of a tort or delict, and for claims for labour remunerations.
The consequences of defaulting on payments of obligations of individuals, including penalties and interest imposed on account of delay, as well as the non-pecuniary consequences, such as acceleration, rescission of a contract and seizure of corporeal things, shall not apply until the lifting of the state of emergency.
The National Social Security Institute remits to the companies 60 % of the amount of the contributory income for January 2020 for the benefit of persons insured under the Social Insurance Code by social insurance contributors meeting criteria established by an act of the Council of Ministers. In case the company fails to pay the full amount of the labour remuneration to the employee for the benefit of whom the financial resources have been received, the company shall reimburse the said resources.
Two main categories of employers may apply for compensation:
- employers, which are directly affected by the COVID-19 emergency measures, as a result of which they suspended the work of the company, of part of the company or of separate employees;
- employers, which suspended the work of the company, of part of the company or of separate employees or which established part-time working hours and the decrease of their sales revenue is at least 20%.
For any questions or assistance concerning the interpretation and application of the State of Emergency Measures Act please do not hesitate to contact us by e-mail: email@example.com or call us on: +359 2 851 72 59.