The most important legislative measures of the Bulgarian Parliament in connection with COVID-19 state of emergency for the business

Sofia, March 24, 2020

Ginka Tabanska, Attorney-at-law, „Karapanayotov, Lesova, Tabanska“ law firm

On March 23, 2020 the Bulgarian Parliament adopted a Law on the measures and actions in connection with the state of emergency, declared with Decision of the Parliament from March 13, 2020 (Emergency Law). For now, the state of emergency was announced for the period from March 13, 2020 until April 13, 2020. The Emergency Law is in force since March 13, 2020 and in some cases concerning preliminary measures – from March 24, 2020 – the day of its announcement into the State Gazette.

  1. Amendments in connection with private and commercial legal relationships

Until the state of emergency is cancelled, the consequences from delay of the payment of liabilities of individuals and private entities, including charging of interest and penalties for late payment, as well as non-monetary consequences such as acceleration clauses, contract avoidance and seizure of property, shall not apply.

The above provisions are not applicable in the relationship between Bulgarian and foreign private entities, when the Bulgarian law is not the governing law of the international private relationship (agreement). Therefore the obligations of Bulgarian companies under agreements with foreign suppliers or customers can be affected by the new provision if the Bulgarian law is the governing law of the agreement – by choice of the parties or by the rules of the international private law.

  1. Amendments in the labor legislation:
  1. It is allowed the employers to send their employees to work from home during the state of emergency. The employer must issue an order about the work from distance (article 120b Labor Code).
  • Ceasing of work of the whole enterprise, a part of the enterprise or of some employees

The new possibility can be used by the employer during the state of emergency with an order. For the period of ceasing of work the employer must pay the salaries of the workers which work is ceased. The social insurances over those salaries are due too.

  • In the period of the state of emergency the employer can order part-time work of all or some of the employees without any further requirements that are prescribed for the normal state.
  • When the work is ceased the employer is entitled to send the employee in annual paid leave without his/her consent.
  • Receiving a sick leave for sick kids is allowed only when the child is sick or under a quarantine. The closure of the kindergartens is not a quarantine. Now in Bulgaria under quarantine are people which arrived from abroad, truck drivers for the time during that they stay in Bulgaria and positive tested people.
  • Supportive measure

The Bulgarian Employment Agency shall undertake 60% from the insurance income of the employees for the month January 2020. Which enterprises will benefit from the measure shall be determined in a governmental act that must be issued in the next days. The measure will be applied for maximum 3 months.

  1. Amendments in the tax legislation
  1. Corporate tax return and payment of corporate tax for the year 2019 are postponed till June 30, 2020.
  2. If the corporate tax return is not filed until April 15, 2020, only the part of the return concerning the forecast about the profit for 2020 for the purpose of determining the advanced payments of corporate tax should be filed within this deadline.
  3. Monthly advanced payments of corporate tax shall be paid on the ground of the forecast in the corporate tax declaration.
  4. Real estate tax obligations are postponed until June 30, 2020 (with 5% discount, if paid for the whole year). The same is applied to the vehicle’s tax.
  5. VAT must be paid without any delay as usually – until the 14th day of the month, following the month of reporting. So, for March 2020 the VAT is due until 14. April 2020.
  • Amendments in the accounting legislation
  1. Annual financial statements can be signed with electronic signature. The same is valid about the audit reports.
  2. The deadline for announcing the annual financial statements 2019 into the trade register was postponed until September 30, 2020.
  3. Undertakings which did not have any activity during 2019 must publish a declaration about this circumstance into the trade register until June 30, 2020.