Tax audit assessments and notices establishing tax liabilities

Chapter XIV of the Bulgarian Tax and Social Insurance Procedure Code governs the assessment of taxes and compulsory social insurance contributions. Two procedures apply to local taxes and fees: preliminary assessment by a notice establishing liability under Article 107(3), and assessment under Article 108 by a tax audit assessment under Article 118. If no audit assessment has been issued and the time limit under Article 109 for initiating an audit has expired, liabilities established under Section One of Chapter XIV are definitive. Preliminary assessment under Chapter 14 differs from tax and social insurance control under Chapter 15. A notice under Article 107(3) requires no order commissioning an audit, no audit report and no audit assessment. The two types of decision follow different procedures. A notice assessing liability on the basis of a return (АУЗД) is not subject to the rules for issuing audit assessments. Nevertheless, revenue authorities may gather relevant evidence on their own initiative or at the taxpayer’s request (Article 37(1)). This also follows from the principles of legality, objectivity and the duty to investigate on the authority’s own initiative: the authority must establish the actual facts relevant to the rights, obligations and liability of those concerned, using the procedures and means of proof provided by the Code.

Under Article 107(3), if the taxpayer requests a notice establishing liability, the revenue authority must issue it within 30 days of the request. The authority may also issue a notice on its own initiative where the information declared differs from information supplied by third parties or organisations and the procedure under Article 103 has been exhausted, or where no return was filed or payment was not made on time and no audit has been conducted (Article 107(3)).

This article is not a legal opinion or advice on any particular situation or person. For assistance in a similar case, consult a lawyer.