Tax offences and crimes under the Bulgarian legislation

Starting from the objective fact that the tax legislation in Bulgaria lacks clarity and systematization, it is no wonder that a large part of taxable persons avoids paying taxes. Tax obligations are not always fulfilled in good faith, which creates the risk that the taxes imposed are not collected in full or on time. This makes it necessary to be familiar with the types of tax offences and to distinguish between a tax offence and a tax crime. 

Tax offences and crimes in the Republic of Bulgaria are regulated by several normative acts – the Criminal Code, the Code of Tax Procedure, and the Law on Administrative Penalties and Offences. Tax offences committed by legal entities are defined in the relevant substantive laws – the Corporate Income Tax Act, the Value Added Tax Act, and the Regulations for the Implementation of the Value Added Tax Act.

Criminal law theory distinguishes between a tax crime and a crime against the tax system. The first concept is broader and includes, besides the crimes under Chapter 7 of the Criminal Code, other crimes related to the violation of tax-law norms – Article 313 paragraph 2. No such distinction is made in the case of administrative tax offences, as the constituents of tax offences are regulated in the substantive laws and the Tax Code.

Tax offences are administrative offences (Article 6 of the Administrative Offences Code – an administrative offense is an act, action or omission that violates the established order of state management, is committed with fault and is declared punishable by an administrative penalty imposed under the administrative procedure).

A specific feature of the offence is its direction – against the order established in the state administration. In practice, it consists in a culpable failure to fulfil a tax obligation. The unlawfulness of the IR is associated with a certain degree of public danger. Like all administrative offences, IR has two sides – objective and subjective.

The objective side comprises – act, unlawfulness, targeting against the tax regime, punishability and the procedure by which the sanction is imposed whereas the subjective one, guilt of the offender (intent, recklessness), motives and objectives of the tax offence.

In tax law, perpetrators may be not only natural persons, but also any person having the capacity of a tax subject. A legal person could not form guilt, but could realize a criminal factual composition by its activity. The wrongfulness consists in the violation of the tax law. The purposefulness consists in non-compliance with the tax regime established in the country, and the existence of a threat to that regime is sufficient. Therefore, some of the IRs are formal torts, with no apparent harmful result (late filing of a tax return or failure to file a return despite being below the non-taxable minimum). Formal and resultant tax offences are distinguished on this basis.

Punishability consists in the establishment in law of both the tax liability and the tax offence and the penalty. There is no special procedure for the establishment of a Tax Offence as the Law on Administrative Offences and Penalties applies.

Typical Tax Offences: – failure to register a tax subject; – failure to keep accounts; – failure to submit a tax return; – failure to issue an invoice.

In tax law, there can only be an attempt in the case of intentional offences linked to the occurrence of a certain result. The attempt is not possible for reckless and formal offences.

The procedure for establishing tax offences and imposing penalties is under the Law on Administrative Offences and Penalties. In addition to administrative penalties, there are also compulsory administrative measures in tax proceedings. They are mainly related to the deprivation of the right to exercise a specific activity. Such are the compulsory administrative measures in the Excise Act and the VAT Act.

The offence can only be human conduct manifested in the form of action or inaction. In tax law, perpetrators of violations may be legal entities – any person in the capacity of a tax subject, including social entities. A legal entity cannot form a fault, but it can realize a criminal factual composition through its activity.

Types of tax offences:

1. Similarly to crimes, tax offences can be divided into two main groups depending on whether the payment is evaded. Tax is referred to as an attribute of the respective composition. Non-payment can be both the aim of the offender and the result of the act.

(a) In the first case, non-payment is an attribute of the offence and this may be indicated in different ways (gambling without excise duty, unjustified use of tax exemptions). These tax offences can be defined as substantive;

(b) in the second case – the offence is related to the tax system but is not aimed at directly avoiding the payment of tax (obstruction of the tax authorities during inspection and audit) – non-substantive;

2. With regards to the offender, tax offences can be classified as follows:

– by taxable persons

– by a tax authority 

– by third parties

Typical offences are: failure to register tax entities; failure to file tax returns on time; failure to pay taxes on time.

For additional information or assistance from our local advisors, please contact Mr. Ivan Stenev, Head of Accounting, at our Eurofast office in Sofia, Bulgaria at

Ivan Stenev

Ivan Stenev
Senior Accountant & Tax Consultant
Eurofast Sofia