Source: http://www.bulgaria-tax-law.bg/recovery-taxes.html
Timestamp: 2019-02-19 13:59:35
Document Index: 467508811

Matched Legal Cases: ['Art. 128', 'Art. 129', 'Art. 129', 'Art. 112', 'Art. 870', 'Art. 128', 'Art. 129', 'Art. 129', 'Art. 92', 'Art. 8']

Recovery taxes in Bulgaria - Tax law in bulgaria
Recovery taxes in Bulgaria
Recovery of taxes in Bulgaria
The recovery of overcharged and undue paid taxes is a matter of protecting the rights and interests of taxpayers and this mechanism preserves the principle enshrined in the Constitution whereby taxes shall be determined according to the income and property of persons. In order to take advantage of the recovery procedure, it is necessary to meet two conditions - an actual payment to have taken place and the subject thereof to be something not due to be paid. There is another requirement - the revenue authority must establish whether the taxable entity has any other state receivables to be charged.
Deduction of sums against chargeable tax obligations
According to Art. 128 TIPC, undue paid or collected sums for taxes, obligatory insurance contributions, imposed by the revenue authority fines and property sanctions, as well as sums subject to restoration regarding the tax and the insurance legislation by the National Revenue Agency, shall be deducted by the revenue authority for redeeming of due public takings, collected by the National Revenue Agency.
Public takings against which the taxes overpaid by the taxpayer can be deducted include excise duties, fees and other contributions to the budget, including PSS, contributions to extrabudgetary funds, overcharged pensions and deficiency amounts in favor of the state budget, fines, confiscations by tax authorities, takings upon entered into force verdicts, decisions and rulings of the courts for public takings in favour of the state. The result of deduction is that the two counter-takings are deemed repaid to the amount of the lesser of the two from the day the deduction could have been carried out.
Deduction and restoration procedures
The deduction or the restoration may be implemented on initiative of the revenue authority or upon written request of the person - Art. 129 (1) TIPC.
The request for deduction or restoration is considered, if it has been filed before the expiration of 5 years from 1 January of the year following the year in which the grounds for restoration arose. When this period expires, the obligation is performed by prescription. With the expiry of this period, the claim shall be barred. The limitation period starts running at the point of collection of undue tax.
The surplus after implementing the deduction must be returned to the person in a bank account, indicated by the same. The restoration of sums, related to the application of the LTFA, to natural persons, who are not traders, may also be done in cash.
The acts for deduction or restoration may be appealed by the order of appealing of the audit acts (Art. 129 (7) TIPC).
Restoration of customs duties and VAT overpaid VAT on imports until 31.12.2005 was carried out by the tax authorities pursuant to Art. 112 (2) of the Tax Code, which allowed to also restore "amounts recoverable on other grounds" in connection with Art. 870 (1) of the Regulations for Application of the Customs Act, according to which, based on the decision of the customs authority the recoverable amounts could be deducted or returned by the respective tax office.
After the TIPC entered into force on 01.01.2006, this possibility only exists for excess VAT on imports, according to Art. 128 (1) TIPC. Since customs duties do not represent amounts recoverable under tax or insurance legislation, there is no legal possibility to deduct or restore these amounts by the revenue authorities under the TIPC procedure.
Charging interest on reimbursements
The most questions related to the recovery of unduly paid and overpaid taxes arise from charging interest on such recovery. According to Art. 129 (6) TIPC, "Undue paid or collected sums, except of the obligatory insurance contributions, shall be returned with the legal interest for the expired period, when they are paid or collected on the base of an act of a revenue authority. In the rest of the cases the sums shall be returned with the legal interest from the day in which should have been restored.''
The revenue authority must, within 30 days after the lodging of an entered into force court or administrative act, to deduct or restore by the order of Art. 129 (2), item 2 the sums indicated in the act in full, together with the due interest, when the act has established the right of the taxable person to receive:
sums for incorrectly or undue paid, deposited or collected sums for taxes, obligatory insurance contributions, fees, fines, property sanctions, established, collected or imposed by the bodies of receivables, including paid upon written instruction or statement;
illegally refused sums for restoration;
awarded sums, compensations and made expenses.
Art. 92 (10) VATA adequately answers the question, at what point should the tax be refunded together with statutory interest: "Any input tax claimable, which has not been refunded without grounds or which has not been refunded by reason of lapsed grounds (including upon revocation of an act) within the time limits provided for in VATA must be refunded together with the legal interest, reckoned from the date on which the said tax should have been refunded under this Act and until the final payment thereof, regardless of the provision of Art. 8 and the suspension of the tax proceedings.''