In order to effectively counteract the shadow economy limits for cash payments have been established in Bulgaria. The limitation of cash transactions apply both to legal entities and consumers.
According to the Bulgarian Limitation of Cash Payments Act, payments on the territory of the country are carried out by bank transfer or deposit in a payment account where:
- their value is equal to or in excess of BGN 10,000 (approx. EUR 5,110) or their equivalent when payments are made in foreign currency;
- the value is below BGN 10 000, but they are part of a linked payment transaction on the same grounds whose total value is equal to or exceeds BGN 10,000.
For example, linked payments are instalments of the purchase price of a property, monthly rental payments, dividends received by shareholders, loans, etc. Although each payment may itself be below the threshold, when together they exceed BGN 10,000 or their equivalent in foreign currency all payments need to be made via bank transfer, starting with the first of the instalments.
No limits for cash payments apply to:
- cash withdrawals or deposits from/to holder’s own accounts;
- cash withdrawals or deposits from/to accounts of fully or partially legally disabled individuals, spouses or lineal relatives;
- payments of employment remuneration. Payments due to anyone who is not an employee (e.g. consultancy fees) need to be made via bank transfer.
Natural person, who violates or allows the violation of cash payments limits, can be fined up to 25 percent of the payment made. The fine for legal entities is 50 percent of the payment made. In case of repeated breach within 1 year period, the sanction is double.
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