Extension of deadlines and deferral of payments
The Act on Measures and Activities during the State of Emergency, announced by a decision of the National Assembly of 13 March 2020, provided for certain changes and extended some deadlines for filing tax returns and payment of the tax due.
Personal Income Tax Act (PITA)
For persons carrying out business activities as traders within the meaning of the Commercial Act, including sole traders, as well as natural persons-farmers who opted for this order of taxation, the deadline for filing tax returns under Article 50 of the Personal Income Tax Act for 2019 and for the payment of the tax due under the VAT return on the annual taxable amount, has been extended from 30 April to 30 June 2020. Also, for those persons, the time limit for using the rebate on the tax to be paid under the annual tax return has been extended from 31 March to 31 May 2020, if the tax return has been filed and the tax to be paid has been paid within that earlier period.
Corporate Income Tax Act (CITA)
Changes to deadlines for the declaration and payment of taxes covered by the CITA in relation to the state of emergency:
- Extension of the deadline for the declaration and payment of corporate tax until 30 June 2020;
- Extension of the deadline for the payment of the tax on expenditure until 30 June 2020;
- Extension of the deadline for the declaration and payment of the tax on support and ancillary activities by the gambling operators as well as the submission of an annual activity report by the gambling operators until 30 June 2020;
- Extension of the deadline for the declaration and payment of income tax by the budget companies until 30 June 2020;
- Extension of the deadline for the declaration and payment of the tax on the activity of the operation of vessels until 30 June 2020;
- In 2020, the persons subject to the CITA shall make advance payments of corporate tax on the basis of the estimated tax profit for 2020, the declaration of which for the year 2020 complied with the time of filing of the annual tax return. It shall be possible to correct the declared advances.
Compulsory social security contributions
For sole traders and farmers who chose to be taxed under Article 26 of the PITA, as well as for sole traders who are subject to a patent tax under the Local Taxes and Fees Act, the deadline for the declaration and submission of final compulsory social security contributions was extended from 30 April 2020 to 30 June 2020. The deadline for the submission of declaration No 6 under Regulation No N-13 of 17 December 2019 on the content, time-limits, method and procedure for the submission and storage of data by employers, social security contributors for persons insured with them and self-employed persons on the total amount of the contributions due in respect of the preceding year was extended to 30 June.
Remitting penalties and interest
For the cases in which the deadlines for submission of declarations and payment have been changed, penalties and interest are due in the event of failure to comply with the obligations in the changed deadlines.
For cases in which the deadlines for submission of declarations and payment have not been changed, penalties and interest shall be due in the event of failure to comply with the obligations within the same time limits.
Suspending debt recovery
By a decision of the National Assembly dated 13.03.2020, a state of emergency has been declared throughout the territory of the Republic of Bulgaria. An Act on Measures and Actions during the State of Emergency, announced by a decision of the National Assembly of 13 March 2020. Part of the provisions under the same Act— § 29 of the Transitional and final provisions of the said Act relates to the enforcement of public receivables until the cancellation of the declared state of emergency. These measures shall provide that:
- no enforcement proceedings under the Tax and Social Security Procedure Code (TSSPC) shall be instituted except where it is necessary to protect essential state or public interests or the implementation of the Act may be thwarted or seriously hampered, or if the delay in implementation may result in a significant or difficult to be repaired damage;
- enforcement under the TSSPC shall be suspended; actions carried out until the suspension shall retain their strength; after the suspension, the public enforcement officer shall not carry out any new enforcement activities, but may carry out actions to secure the claim, as well as allocate amounts received under the enforcement case; enforcement proceedings shall be resumed after the expiry of the period for which the state of emergency has been declared; before the expiry of the period of the state emergency, the enforcement proceedings shall be resumed by order of the public enforcement officer at the request of the debtor, for enforcement:
- on receivables and cash from banks;
- receivables from third parties;
- deposited valuables in vaults, including the contents of safes.
After the implementation of the enforcement in one of these three ways the enforcement proceedings shall be stopped. Until the State of emergency is terminated, no bringing into possession shall be carried out. Until the cancellation of the State of emergency, interest on outstanding public receivables including receivables from suspended enforcement proceedings shall continue to be charged.
Additionally, it is provided that regarding taxes, duties, compulsory social security contributions and other public receivables, as defined in the TSSPC, from the entry into force of the Act on the annulment of the state of emergency, the limitation periods – 5 and 10 year limitation periods – shall be suspended. The exception to the rule concerns the fines on individuals. In view of the adopted legal framework, the general principle is that during the period of the declared state of emergency, precautionary measures may be imposed on public claims.
Regardless of the above, the approach and decisions in this period should be individual and should be consistent with the profile and behaviour of the debtor concerned, his property and financial status, the age and the amount of his debt, respectively the existence of obligations with an expiring limitation period during the declared state of emergency, as well as to what extent the same individual directly or indirectly suffers harm from the corona virus pandemic and the declared state of emergency in the Republic of Bulgaria. In this respect, flexibility should be exercised using all legal mechanisms to leave some of the seized amounts at the disposal of the persons - through the regime of authorizations for urgent payments provided by law; and/or replacement of precautionary measures at the request of the person, etc. Overall, actions against natural persons and medical treatment facilities should be considerate.
Quicker refunds
The quick refund process is applicable for taxes on income of natural persons and for VAT registered enterprises (for all VAT registered enterprises, including small businesses and traders, who are natural persons) through a simplified refund procedure, introduced in 2016 for VAT and in 2017 for the Personal Income Tax.
Audit policies and tax certainty
The time limits laid down in the Tax and Social Security Procedure Code (TSSPC) for the conduct of inspections and audits are not affected by the state of emergency declared in the Republic of Bulgaria, neither suspended nor extended. However, the revenue authorities shall take into account the state of emergency in the implementation of the TSSPC — i.e. actions requiring physical presence on site (inspection, inventory, review of documents in office, etc.) shall not be carried out and the time limits laid down in the relevant proceedings shall be extended. When setting time limits for the submission of evidence or the fulfilment of other assistance obligations, consideration of extension requests, etc. the revenue authorities shall take into account the state of emergency. In this regard, the Bulgarian TSSPC allows the parties and other participants involved in the proceedings a variety of possibilities to defend their rights and interests in the event of difficulties in carrying out procedural actions, such as a request for an extension of the time limits laid down by the revenue authority, a request to suspend the proceedings, extension of the time limit for pronouncement on a complaint by mutual agreement, etc.
Enhanced services and communication initiatives
The possibility for persons to manage by electronic means the access of persons authorized by them to NRA’s services with QES has been enhanced. So far this was possible only in an NRA’s office. A possibility has been provided to expand by electronic means the access to NRA’s services with PIC (personal identification code) (issued free of charge by the Agency) for persons who have been issued one but have so far enjoyed limited rights. Up till now this was possible only in an NRA’s office. Publishing requests to individuals to use NRA’s electronic services as a priority and avoid on-site visits. At each office visit officials invite persons to receive a PIC and use it to communicate electronically with the NRA in order to avoid subsequent office visits. Extended working hours of the NRA’s Information Centre from 8.30 a.m. to 6.00 p.m. and provision of assistance and information to the clients of the Agency by phone and e-mail.
New services have been implemented to ensure the operating capacity of the Personal Identification Numbers with which NRA clients submit data, receive references and certificates and make payments. A remote recovery service has been implemented in the event of a non-functional identifier and all necessary assistance is being provided in cases of customer difficulties. This is particularly important in view of the fact that more than 650 000 individuals use this tool for identification and execution of their legal obligations online.
In connection with the complicated epidemic situation around the world and the growing number of COVID-19 cases in Bulgaria, a state of emergency was introduced on March 13th. Information on measures to contain the infection and recommendations of the World Health Organisation were published on the Agency’s internal website in a dedicated space, under section “Important”. Special instructions of the Director General regarding the opportunities for remote work and customer service of NRA in a state of emergency were also published on the internal website. The important information concerning the disinfection of the premises as well as the ways of accessing the Agency’s information assets remotely was sent by direct emails to NRA employees.
The clients of the administration are informed promptly through the NRA’s external website www.nap.bg , as well as through press releases to the media. A special section was established on the external page of the Agency. This section is accessed through a banner and contains information on declaration and payment of republican taxes and social security contributions during the emergency situation, questions and answers on the topic, as well as detailed information on the declaration and payment of the advance contributions under the Corporate Income Tax Act. The “News section” publishes a number of messages, including encouraging the use of the electronic services of the NRA, restoration of forgotten PIC by the NRA by phone, etc. A statement of the NRA on the implementation of the Law on Measures and Actions during the Emergency Situation, was published in relation to deadlines under the Tax and Social Security Procedure Code and the material tax laws. Information concerning the extension of the deadline for the submission of the final social security contributions for the compulsory social and health insurance of self-insured persons was also published.
The NRA continues to use all channels for rapid communication with its employees, on the one hand, and with its clients, on the other, in order to provide in a timely manner all available information related to the measures taken by the government to limit the spread of the corona virus.
General measures
The local municipalities have been addressed to provide support to local citizens who need to submit electronically documents, related with their health insurance rights, to the National Revenue Agency (NRA) offices, because of the imposed restrictions on travel to the district centres where the offices of the National Revenue Agency are located.
Business Continuity Measures
Governance arrangements
A Law on Measures and Actions during the State of Emergency was adopted, announced by a decision of the National Assembly of 13 March 2020.
A letter from the Council of Ministers has been received to all ministries and state institutions, which contains additional recommendations related to the work of the administration in the conditions of corona-virus COVID-19. The letter sets out recommendations regarding the provision of opportunities for remote administrative services and online work meetings.
An organization of the working process has been established to ensure its normal conduct and compliance with the normative requirements and the internal work procedural rules established by the NRA.
- by Order of the Director General of the NRA the possibility of work from a distance and holding online work meetings was approved.
- by Order of the Director General of the NRA on the approval of “Rules for the Organization and Reporting of Flexible Working Time in the Headquarters of the National Revenue Agency”.
- each Director of a Directorate at the Headquarters of the NRA prepares a report note to their associated Deputy Director/Secretary General representing the organization established in the Directorate in such a way as not to impede the work processes. A schedule for the presence of employees at work premises and the performance of their duties from home is attached to the report note.
- information about the Covid-19 crisis, the measures taken and related information is published on the NRA’s internal web page.
Scenario planning
The Agency has developed a plan for the continuity and guaranteed performance of critical information systems. The plan has been developed in accordance with the requirements of the Ordinance on minimum requirements for network and information security and with the “Information Security Management System (ISMS)” implemented in the NRA. The NRA constantly applies a system for maintaining physical security in the buildings and of the employees.
Understanding critical vulnerabilities
A procedure and methodology for risk management has been implemented at the Network and Information Security of the Systems Directorate. An action plan for risk assessment and critical vulnerabilities shall be drawn up if necessary. In the current situation, the risk of remote operation as well as the risk of business continuity have been assessed prior to proceeding to a mode of operation, introduced by an order of the Director General of the NRA, specifying the order and the way to apply the mode of operation from a distance in the organization of the working process in all NRA structures.
On the risk assessment of remote work:
1.Is there an opportunity to carry out the business activity through remote work?
2. Are there remote work policies and rules for both staff and external suppliers of products or services?
3. Do external product and service suppliers have remote work policies for staff involved in the delivery of the product or service?
4. Is it possible to provide and maintain multifactor authentication (MFA)?
5. Is there a possibility to provide and implement VPN access for employees?
On the risk assessment of business continuity:
1.Are products and services regularly updated?
2. Assessment of the IS continuity and sustainability plans.
3. Are there policies and plans to manage cybersecurity incidents?
4. Do external suppliers of products or services have continuity and sustainability plans to supply the product or service?
Pandemic risk:
1. Is there a policy/ plan for a pandemic?
2. Is there a plan for communication with local government?
Management of vulnerabilities based on the risk of business impact if vulnerability is used.
Security Directorate performs the tasks of ensuring physical security, in full, without change, according to the work schedules prepared.
Staff and taxpayer safety
In order to reduce the risks of infection at the workplace of the employees and clients of the National Revenue Agency, the following measures have been taken:
- The purchase of protective masks, gloves and disinfectants for employees of the Agency has been organised and realised.
- In all premises where customer services are carried out, disinfection of the rooms is performed 4 times a day.
- Hand disinfectants have been placed at all entrances to the NRA’s buildings.
- A daily disinfection of the individual workplaces of staff (desk, keyboard, telephone) is carried out.
- Organised purchase of safety helmets for employees working at the Agency’s client centers.
The Security Directorate, through the employees exercising control over the crossing regime, carries out constant control to prevent non-authorized access to the buildings of the NRA. The activities are carried out in full scope and individual protective equipment is used
Remote working
By order of the Director General of the NRA the procedures for implementation of a distance mode of organization of the work process in all NRA structures have been set out. Under this order, the following has been developed and approved:
1. Mandatory instructions:
- Preparation, agreement and issuance of electronic documents on the conditions of a distance mode of operation;
- Compulsory conditions for requesting, agreeing, approving and ensuring access through a virtual private network (VPN) to the information systems of the NRA for remote operation, relating to NRA staff who are required to sign electronic documents in order to perform their official duties in their capacity of issuers.
2. A declaration in case of using remote access to the information resources of the NRA in order to ensure a high level of information security.
3. Requirement and provision of a two-factor authentication for staff of the Agency operating in remote working conditions.
4. Provision of a VPN network for certain officials in the NRA.
5. Instructions for accessing and handling the information systems of the NRA, in remote working conditions.
Human Resources Management Directorate:
An organization has been established and access is granted to NRA officials to basic network resources of the NRA from personal and other devices which are not part of the IT infrastructure of the NRA/access outside the NRA network/, such as:
- Official business e-mail;
- Electronic service for requesting annual leave - SelfServices;
- Legal information system;
- Key specialized, business IT applications/by electronic signature.
Additional agreements to maintenance contracts have been made to ensure the remote operation, including a declaration of understanding of cyber security requirements. A Geo IP Filter has been introduced for some of the services to limit the possibilities of malicious attacks and increase the security of access. A scanning for vulnerability of the resources ensuring the remote operation and the basic elements of the infrastructure is being carried out.
Contact arrangements
Contact details of staff have been updated and circulated, and also published on the Internal page of the Agency. MS Team has been installed in accordance with the recommendations of the E-Government State Agency and Council of Ministers in order to allow distance and conference-type communication. The list of mobile telephones has been updated for contact with employees, if need may arise.
Communicating
Information on measures to contain the infection and recommendations of the World Health Organisation were published on the Agency’s internal website in a dedicated space, under section “Important”. Special instructions of the Director General regarding the opportunities for remote work and customer service of NRA in a state of emergency were also published on the internal website. The important information concerning the disinfection of the premises as well as the ways of accessing the Agency’s information assets remotely was sent by direct emails to NRA employees.
The clients of the administration are informed promptly through the NRA’s external website www.nap.bg , as well as through press releases to the media. A special section was established on the external page of the Agency. This section is accessed through a banner and contains information on declaration and payment of republican taxes and social security contributions during the emergency situation, questions and answers on the topic, as well as detailed information on the declaration and payment of the advance contributions under the Corporate Income Tax Act. The “News section” publishes a number of messages, including encouraging the use of the electronic services of the NRA, restoration of forgotten PIC by the NRA by phone, etc. A statement of the NRA on the implementation of the Law on Measures and Actions during the Emergency Situation, was published in relation to deadlines under the Tax and Social Security Procedure Code and the material tax laws. Information concerning the extension of the deadline for the submission of the final social security contributions for the compulsory social and health insurance of self-insured persons was also published.
Training and redeployment
Instructions on information security measures at work from a distance have been prepared and the Agency’s staff are familiar with them. Recommendations and good practices for working in remote working conditions have been described, and the Agency’s staff have been acquainted with them. The regulations and organization for redirecting human resources in the NRA are part of an approved and long-established procedure for conducting competitive selections in the NRA.
Training: In the past two months in the context of a pandemic and a state of emergency, training efforts have been targeted at developing and conducting e-learning and self-training courses. In this regard, and in order to ensure continuity of the process of staff training in the NRA, the following actions have been taken:
1. Developing new and updating the already developed e-learning and self-training courses during the previous year. At present, the NRA's Remote E-learning System (RELS) has 11 self-training courses on 11 specialized subjects and 23 e – learning courses with a teacher's participation on 23 subjects.
In the second half of 2020 e-courses on 9 additional specialized topics will be developed and carried out.
2. Intensive running of e-learning courses. In the last 2 months 51 e-learning courses have been organized and carried out with 1361 participants, including:
-14 e-learning courses (groups) with 287 participants;
-17 e-learning courses (groups) with 82 participants, a final module of introduction training for newly recruited employees using a virtual classroom;
- 763 employees participated in electronic self-training courses in the RETS of NRA;
- 20 trainings with 229 participants organized by the NRA under the project “Digital Transformation in Training - Digital Competence and Learning” financed by the Operative Program Good Governance, available through the e-learning platform of the Institute of Public Administration (IPA).
3. Employees have been given the opportunity to access e-learning courses from their workplace and from home.
4. Training courses related to the improvement of the digital competence of NRA’s staff have been organised and conducted.
5. Planned specialized attendance training courses have been transformed into e-learning courses.
There is no need to redeploy staff at the moment.
Recruitment and retention
An organization and practice have been established for issuance of the necessary documents for continuing the legal relations with key employees after they have acquired entitlement to a retirement pension and age.
Recruitment rules have been established for civil servants' mobility in order to accelerate recruitment for key positions within the entire public administration.
In case you have any document of information which you find worth to share regarding the actions, measures or concrete experiences in countering the crisis, please do not hesitate to upload it to the subpage focusing on Covid-19 Crisis Support on IOTA website in order to share it with other members.