Auditors at Bulgaria’s tax agency uncover millions in hidden income

Audits by Bulgaria’s National Revenue Agency of 900 people uncovered 45 million leva (about 22.5 million euro) in concealed income – and those caught out have been given two weeks to pay up, with interest, the agency said on September 11 2012.

If the outstanding taxes are not paid, they will be forcibly collected, the agency said.

In 80 per cent of the cases, the agency’s auditors found discrepancies between stated income and assets.

“The most common are cases in which property (real estate, cars, personal belongings) that a person has have a much higher value than the official income.”

In such cases, auditors assessed value of the assets, compare it with the income gap, and imposed tax due plus interest for the past five years.

Tax auditors drew not only on information submitted to various government bodies about houses, apartments and cars, but also checked on individual purchases of luxury goods such as jewellery, watches and home appliances.

Companies registered for value-added tax (VAT) in Bulgaria had submitted to the National Revenue Agency information about its customers, including their names and identity number.

“In this way, computer systems often detect cases in which the monthly payments under a lease and mortgage loans, for example, are worth many times more than the official income of the spouses in a household,” the agency said.

National Revenue Agency chief Krassimir Stefanov said, “income tax in Bulgaria is effectively the lowest in the European Union. It is much cheaper to comply with the law than to pay for accounting tricks. There is either an easy or a hard way to find that out”.

At the end of July 2012, the National Revenue Agency said that it would be telephoning 28 000 people by the end of this year because they had been late in paying their taxes or contributions or had failed to submit an annual tax return to the agency.

The agency said at the time that the campaign was aimed at getting the most people possible to submit their tax returns and pay the amounts due on time, rather than facing penalties such as the freezing of their bank accounts or foreclosure of their real estate.

The agency said that if any company or individual were in financial difficulties and could not pay their taxes and social security contributions, they should contact the agency as soon as possible to discuss the matter. Bulgarian tax law makes it possible to negotiate payment of taxes in installments or to defer payment of the charges against security.

The National Revenue Agency’s call centre number is 0700 18700 and its e-mail address is [email protected]

(Photo:  Darren Shaw)




The Sofia Globe staff

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