The Bulgarian parliament has adopted amendments to both the Administrative Procedural Code and the Tax and Social Security Procedural Code that impact litigation against tax assessment acts by the nation's revenue authorities.
In particular, the changes are expected to change tax litigation procedures in the areas of court competence, small-assessment cases, and the fees for the Supreme Administrative Court.
The amendments have changed the procedure for identifying the competent court for tax litigation. Beginning in 2019, the administrative court linked to the registered address of the tax payer at the time of the first procedural action in a tax-audit process will be the competent first instance court for litigation against a relevant assessment.
Currently, the competent court is linked to the tax directorate issuing the assessment. This procedure will be abolished when the amendments come into force on 1 January 2019.
One court for small assessments
The amendments also change the litigation procedure for small assessment cases. In the future, assessments of up to BGN 750 (EUR 360) for individuals and BGN 4,000 (EUR 2050) for companies will no longer receive second instance litigation before the Supreme Administrative Court. A one-instance court litigation frame for small-assessment cases will be created.
State Fees the Supreme Administrative Court
The Supreme Administrative Court is the second and final stage for litigation against tax assessments. Currently, there is a fixed fee for litigation of BGN 25 (EUR 12) irrespective of the linked assessment amount.
The new fee will be set at 0.8% of the assessment (before interest penalties) and capped at BGN 1,700 (EUR 870). Where the assessment exceeds BGN 10,000,000, the fees will be set at BGN 4,500 (EUR 2,300).
Although the amendments are scheduled to enter into force on 1 January 2019, Bulgarian President Rumen Radev has promised to bring the amendments for the pro-rata Supreme Administrative Court state fees to the Constitutional Court for review.