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Petar Varbanov |
This is partly due to the lack of effective penalties imposed by authorities over the years. However, the latest changes affecting the publication of financial statements aims to remedy this situation.
Effectively, all companies are required to submit their AFS to the trade register by June 30 of the year following the reporting year. Until recently, the deadline for joint-stock companies' reports was July 31, which means the audits of their financial statements required an earlier completion this year.
Small enterprises, which are not subject to statutory independent financial audits, are not required to publish their income statements and management reports. However, they still need to publish their financial statements, but have the right to not disclose all content.
The most substantial legislation change is the method of calculating the penalty for not publishing financial statements. Rather than a fixed penalty, enterprises are now penalised with a pecuniary sanction ranging from 0.1% to 0.5% of the net sales revenue for the reporting period. This may result in excessive fines if the company's net sales revenue is high. For companies with low net sales, the change may be positive as the penalty imposed might decrease compared to previous years.
An important point to note is that, in addition to the penalty imposed on the company, the individual who fails to publish the financial statements (typically the company's director) will be fined with a penalty ranging between €100 ($112) and €1,500. In the event of repeat violations, the fine or pecuniary sanction will be doubled.
Branches of foreign companies
Branches of foreign entities are obliged to publish the audited financial statements of the parent company in the trade register.
There is no specific deadline for this publication because the statements of the parent company are subject to rules that are outside the control of Bulgarian legislation. It is, nevertheless, recommended that publication is organised as early as possible after the statements of the parent company are duly adopted, approved and published in the country of establishment.
Petar Varbanov (petar.varbanov@eurofast.eu)
Eurofast Bulgaria Office
Direct tel: +359 2 988 69 75
Website: www.eurofast.eu
