Bulgaria's new Code of Tax Procedure came into force on January 1 2000. It regulates key issues including registration, assessment, collection and appeals.


Tax registration is compulsory for the following entities:

  • domestic incorporated and unincorporated legal entities;

  • foreign legal entities;

  • branches and representative offices of foreign entities;

  • foreign partnerships that have a permanent establishment or derive income in Bulgaria, or engage in taxable activities in Bulgaria; and

  • foreign entities with a place of 'effective management' (undefined) in Bulgaria.

Important information is now recorded in the tax register, including the names and addresses of those who are liable to pay tax. Each taxpayer's liabilities and payments are recorded in a separate account.


Taxes are assessed after a tax inspection has been completed. If the tax authority determines that the taxpayer has violated tax or accounting rules, it is entitled to assess the amount of tax due pursuant to specific rules. Taxes may be set off or refunded with or without the request of the taxpayer. The taxpayer may request a set off or refund by filing an application with the territorial tax directorate.

When a set off or refund is requested, the tax authority may either (i) conduct an inspection and issue a report within seven days of completing the inspection, or just examine the relevant information (eg, accounts) and issue a tax assessment act for the set off/refund within two weeks of the request being made. If the tax authority rejects such a request, the taxpayer may appeal the decision.


The code provides that appeals concerning decisions by the tax authority are first appealed following an administrative procedure before the head of the territorial tax directorate. If that appeal is denied, there is the possibility of appeal to the judicial courts.

The territorial tax directorate that has jurisdiction to hear an appeal is determined by:

  • the place where the taxpayer is registered;

  • the place where the registered office of the entity is situated; or

  • the place where the taxpayer performs its activities.

The head of the territorial tax directorate should issue its decision within 30 days of the appeal being made, and may not issue a decision that is less favourable to the taxpayer than the tax authority's decision.

If the appeal is rejected, the tax authority's decision can be appealed to the judicial courts, namely, the district court having jurisdiction over the matter. The district court's jurisdiction is determined by the registered address of the territorial tax directorate. It is not possible to appeal a tax authority decision that upholds the tax assessment act (in whole or in part).


The new Code of Tax Procedure introduces specific rules for tax cases. The aims of the new procedural rules are (i) to place the tax authority and taxpayers on equal footing, and (ii) to ensure that the adversarial system (taxpayer v tax authority) is maintained (as in other civil proceedings).

For further information on this topic please contact Dimiter Smilenov at Novel Consult by telephone(+359 2 988 3041) or by fax (+359 2 986 3955) or by e-mail ([email protected]).
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