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Some legal implications of having a registered company in Bulgaria set up only to buy a property

Re-registration – if your company has been registered till 30.05.2008 under Bulstat register you need to re-register it in the Commercial register till 31.12.2011 and obtain Unified Economic Code. If not – liquidation ex officio will be carried out and the appointed liquidator will sell your property and after satisfying all the creditors will pay you so called liquidation share if any. If the amount is not enough to satisfy your creditors bankruptcy proceedings will commence. You may end up paying the costs of these legal proceedings and without your property!

Annual financial report - all the companies, which are to be re-registered till 31.05.2011 should publish their annual financial reports for 2007, 2008, 2009 and 2010 till 30.06.2011. The companies which are to be re-registered on or after 01.06.2011 – should publish their reports in 3 months time from the company re-registration but not later than 31.12.2011. All the companies which are registered directly in the Commercial register should publish their annual reports by 30.06.2011. All the companies, registered or re-registered should publish annual financial reports for the last year by 30 June of the following year. If you fail to do this the fine is 2000-3000 BGN for the company and 1500-2000 BGN for the company manager This obligation stands for every year the company exists even if it has no business activity. The data from the Commercial register is transferred ex officio to the National Revenue Agency, you do not need to register separately for tax purposes.

Company tax return – you need to submit one till 31 March each year. If the company has no business activity the last year, you need to submit one as well. The tax return should be submitted to the Territorial department of the National Revenue Agency at the company address. Failure to do this may result in imposing a fine of 500-3000 BGN for the company and 200-1000 BGN for the company manager.

Property taxes – in 2 months time from the acquisition the owner should submit a declaration to the Tax department of the municipality where the property is located. If you fail to do this the fine is 500-3000 BGN for the company. The property tax is between 0.1 and 4.5 ‰ of the tax evaluation of the property. The exact rate is stipulated by the Ordinance of the Municipality where the property is located. The property tax shall be paid in two equal installments – from 01.03. till 30.06 and till 30.10 of the year it is due. Failure to pay is not deemed as administrative breach.