The publication of annual financial statements in the trade register is often neglected by Bulgarian trading enterprises. This is partly due to the lack of effective penalties imposed by authorities over the years. However, the latest changes affecting the publication of financial statements aim to remedy the situation.
Effectively, all companies are required to submit their AFS to the trade register by 30 June of the year following the reporting year. Until recently, the deadline for joint-stock companies’ reports was 31 July which means the audits of their financial statements required an earlier completion this year.
Small enterprises which are not subject to statutory independent financial audit are not required to publish their income statements and management reports. However, they still need to publish their financial statements but have the right to not disclose all content.
The most substantial legislation change can be noted in the method of calculating the penalty for not publishing financial statements. Rather than a fixed penalty, enterprises are now penalised with a pecuniary sanction ranging from 0.1% to 0.5% of the net sales revenue for the reporting period. This may result in excessive fines if the company’s net sales revenue is high. For companies with low net sales, the change can be considered positive, as the penalty imposed might decrease compared to previous years.
An important point to note is that, in addition to the penalty imposed on the company, the person who fails to publish the financial statements (typically the company’s director) will be fined with a penalty ranging between €100 and €1,500. In the event of repeat violations, the fine or pecuniary sanction will be doubled.
Additional note on branches of foreign companies
Branches of foreign entities are obliged to publish the audited financial statements of the parent company in the trade register. There is no specific deadline for this publication because the statements of the parent company are subject to rules that are outside the control of Bulgarian legislation. It is, nevertheless, recommended that publication is organised as early as possible after the statements of the parent company are duly adopted, approved and published in the country of establishment.
Petаr Vаrbаnov Eurofast Bulgaria Office Direct tel: +359 2 988 69 75 Emаil: Petаr.Vаrbаnov@eurofаst.eu