Legislative changes to the Accountancy Act will be promulgated in the Bulgarian State Gazette Nr. 105. The reasons for the amendments to the Accountancy Act can be summarized in two points:
One is to comply the Bulgarian legislation with the European Directive (EU) 2021/2101 of the European Parliament and of the Council of November 24, 2021. amending Directive 2013/34/EU as regards the disclosure of income tax information by certain undertakings and branches ),which requires certain undertakings and branches to publish information about the income tax they have paid. This Directive was supposed to be transposed by 22 June 2023, however Bulgaria failed to do so and an infringement procedure has been launched. The purpose of the Directive is to increase the transparency and accountability of multinational companies operating in the European Union and to enable public scrutiny of their activities.
The referred to Directive applies to multinational groups with consolidated revenues of more than 750 million euros and independent enterprises which revenue exceeds 750 million euros based on individual annual financial statements, operating in the EU. These are enterprises that have a significant volume of activity and a potential impact on the economy and tax systems of the Member States. The equivalent of the threshold of EUR 750 million specified in the Directive in relation to the Bulgarian currency is BGN 1,500,000,000. The provisions will enter into force on 1 January 2025.
The second reason is to change the amounts of sanctions and fines for false/incorrect accounting in accordance with the recommendations of the Organization for Economic Cooperation and Development (OECD). The latter has made recommendations to strengthen the criminal liability of enterprises and their managers who carry out false accounting, in order to achieve efficiency, proportionality and deterrent effect of punishments.
The specific monetary sanctions that are foreseen for carrying out false accounting for the purpose of bribing or concealing a bribe are distinguished, depending on the type of subject, namely:
- BGN 5,000 to BGN 15,000 – for natural persons. These fines are higher than the previous ones, which range from BGN 1,000 to BGN 5,000.
- BGN 10,000 to BGN 20,000 – for legal entities. These fines are also higher than the previous ones - BGN 5,000 to 10,000.
The motive for increasing the criminal sanctions is to strengthen the fight against corruption and to achieve greater efficiency, proportionality and deterrent effect of the punishments for such violation. This is in line with OECD recommendations, according to which the current penalties for false accounting for the purpose of bribing or concealing a bribe are too low and do not reflect the gravity of the crime.