Fines According to the New Accountancy Act of Bulgaria The new Accountancy Act of Bulgaria that has entered into force on 01.01.2016 provides higher penalties regarding preparing and publishing of companies' financial reports:
- Fine for a person who will order drafting of the financial report to a person who does not meet the requirements of a drawer of financial reports shall be penalised with a fine to the amount from 500 to 3000 BGN and the fine for the company is to the amount from 2000 to 5000 BGN. Fine for a repeated violation during one year period after the first violation is to the double amount of the fine for the first violation.
- Fine for a person who draws a financial report without meeting the requirements to a drawer of financial reports is to the amount from 500 BGN to 3000 BGN. An accounting company which draws a financial report without meeting the requirements to a drawer of financial reports is to the amount from 2000 BGN to 5000 BGN. Fine for a repeated violation during one year period after the first violation is to the double amount of the fine for the first violation.
- Fine for a person who is obliged to draft a financial report and does not fulfil this obligation is to the amount from 500 BGN to 3000 BGN and the fine for a company is from the amount of 2000 BGN to 5000 BGN. Fine for a repeated violation during one year period after the first violation is to the double amount of the fine for the first violation.
- Fine for a person who is obliged to publish a financial report and does not fulfil this obligation is to the amount from 200 BGN to 3000 BGN and the fine for a company is from the amount from 0.1 to 0.5 per cent from the amount of the net sales during the reporting period but not less than 200 BGN. Fine for a repeated violation during one year period after the first violation is to the double amount of the fine for the first violation.
Some Important Amendments in the New Accountancy Act of Bulgaria 1. The accounting documents in a foreign language /non-Bulgarian/ should be translated in Bulgarian only when it is provided by the law.
2. All primary accounting documents should be kept for 10 years starting from 1st of January of the year following the year of issuing of the document.
3.The new Accountancy Act determines following categories of companies:
3.1. Micro-enterprises - those that to 31st of December of the current reporting period do not exceed the limits of at least two of the following three criteria:
- Balance value of the assets - 700 000 BGN
- Net revenue from sales - 1 400 000 BGN
- Average number of the employees during the reporting period - 10 people
3.2. Small enterprises - those that to 31st of December of the current reporting period do not exceed the limits of at least two of the following three criteria:
- Balance value of the assets - 8 000 000 BGN
- Net revenue from sales - 16 000 000 BGN
- Average number of the employees during the reporting period - 50 people
3.3. Medium enterprises - those that to 31st of December of the current reporting period do not exceed the limits of at least two of the following three criteria:
- Balance value of the assets - 38 000 000 BGN
- Net revenue from sales - 76 000 000 BGN
- Average number of the employees during the reporting period - 250 people
3.4 Large enterprises - those that to 31st of December of the current reporting period exceed the limits of at least two of the following three criteria:
- Balance value of the assets - 38 000 000 BGN
- Net revenue from sales - 76 000 000 BGN
- Average number of the employees during the reporting period - 250 people
The category of an enterprise can be changed in case the company stops to meet requirements of two criteria for the specific category.
4. The new Accountancy Act provides some simplification of the annual financial reports:
- annual financial reports of all the companies should consist of at least: Balance sheet, profit and loss report and appendix
- annual financial report of a sole trader with net revenue from sales not exceeding 200 000 BGN that is not a subject of the mandatory independent financial audit can consist only of profit and loss report
- annual financial report of a micro-enterprise can consist only of a condensed balance sheet, a condensed profit and loss report and an appendix
- annual financial report of a small enterprise can consist only of a condensed balance sheet, a condensed profit and loss report and an appendix
- annual financial reports of medium and large enterprises should represent a full report drafted according to the relevant accounting standards.
5. Each enterprise should publish its financial report till 30th of June of the year following the reporting one.
If a company has submitted its financial report on time but the relevant authority has refused to publish the report, it will be considered that the financial report was submitted on time in case the second application is submitted within 14 days after entering of the refusal in force.
Small enterprises that are not subject to mandatory independent financial audit have the right not to publish their profit and loss reports and reports on activity.
Sole traders that are not subject to mandatory independent financial audit are not obliged to publish their financial reports.
6. Micro-enterprises and small enterprises /except investment companies and financial holding companies/ are released from the obligation to submit their annual reports on activity.
7. Persons who can draw financial reports:
7.1. Reports of sole traders and micro-companies without any activity during the reporting period can be prepared by the owners or shareholders of such enterprises.
7.2. In all other cases the financial reports should be drawn by persons meeting the following requirements:
- Tertiary education in accounting and economics and a master's degree and two years length of employment in the area of accounting, internal and external audit and financial inspection, tax audits or as an educator in accounting and control
OR
- Tertiary education in accounting and economics and a bachelor's degree and three years length of employment in the area of accounting, internal and external audit and financial inspection, tax audits or as an educator in accounting and control
OR
- Tertiary education in accounting and economics and a specialist degree and four years length of employment in the area of accounting, internal and external audit and financial inspection, tax audits or as an educator in accounting and control
OR
- Other tertiary economic education and 5 years length of employment in the area of accounting, internal and external audit and financial inspection, tax audits or as an educator in accounting and control
OR
- Secondary economic education and 8 years of previous employment as an accountant.
7.3. The person drawing the financial report should be in employment or contractual relationship with the enterprise.
7.4. A drawer of financial statements may be a person who has not been convicted for theft, robbery, embezzlement, fraud, blackmailing, receiving of stolen goods, destruction and damage, abuse of trust, a crime against the economy.
Got this yesteday from my lawyer and thought it maybe of interest to some of us.