There has been an increase in tip-offs by customers of real estate businesses in recent months about irregularities, Bulgaria’s National Revenue Agency said on June 8 2015.
Most of these complaints were that no receipts or other accounting documents were issued for commissions paid, the agency said.
Each complaint had been followed up and evidence was that in most cases, the law-breaking had been confirmed.
The increase in the number of complaints against real estate agencies was most likely because of the season and the “revival” in the market, the National Revenue Agency said.
It issued a reminder that the penalty for physical persons who were not registered traders failing to issue a receipt was 500 leva (about 250 euro) while for sole traders and legal persons, it was 500 to 2000 leva but could reach 10 000 leva in cases where there was no cash register.
The National Revenue Agency said that the activities of real estate agencies that did not keep to the rules had long been “on its radar”.
Analysis of the risk of under-reporting of income from real estate agencies and unregistered brokers showed that the annual damage to the budget was about 26.2 million leva and the proportion of persons at risk was 83 per cent.
The agency said that this had led it to start monitoring real estate agencies’ operations in 2013 and 2014.
In 2013, check-ups of a total of 53 persons had resulted in tax authorities finding that they had additional obligations because of non-payment of taxes and social security contributions adding up to a total of 800 000 leva.
In mid-2014, the agency initiated 390 inspections of real estate brokers and individuals indicated by NRA data to be tax evasion risks. These audits and inspections were continuing in 2015.
The agency said that in addition to these steps, it and the Real Estate National Association had issued an information leaflet giving practical advice on what to do when buying, selling or renting property and what to require of the agency or broker.
The brochure – downloadable from the NRA website, in Bulgarian only – describes in detail taxation of income from the sale or rental of property.
The agency said that complaints about irregularities regarding the sale or rental of real estate could be made by phone to 0700 18 700 at the price of a local call, or by e-mail to [email protected], with confidentiality guaranteed to the sender.