With the advancement of digital technologies and fintech solutions like Revolut, more and more freelancers and self-employed professionals are turning to modern financial tools to manage their funds. This includes using Revolut as a business account.
While convenient and efficient, these tools are subject to various regulatory requirements, including providing information to government authorities.
In this article, we will explore what data Revolut collects and shares with the National Revenue Agency (NAP) and how this affects users who utilize the app for personal or business purposes.
Revolut – a financial platform for modern businesses
Revolut is an innovative financial platform that offers a wide range of services, including international money transfers, currency exchange, account management, and even cryptocurrency investments. The app is especially popular among freelancers looking for more flexible and affordable financial management solutions.
Revolut began operating as a bank in Bulgaria in March 2021, using a license from Lithuania. This allows Bulgarian users to benefit from deposit protection of up to 100,000 EUR under the deposit guarantee scheme.
All financial institutions, including Revolut, are required to provide financial information to NAP. This is essential for ensuring tax transparency and preventing illegal financial practices.
Revolut’s services include both personal accounts and the option to use Revolut as a business account, which is important for those who use the app to manage their income as freelancers.
Revolut’s obligations as a financial institution
Financial institutions operating in the European Union and Bulgaria are subject to strict legal frameworks. Revolut, although functioning as a digital platform, is no exception to these requirements. The regulatory framework includes obligations for accountability and transparency, as well as specific requirements for anti-money laundering (AML) and counter-terrorism financing (CTF).
Revolut is required to provide regulatory authorities, including NAP, with data on its users and their financial transactions.
According to Bulgarian legislation, all individuals and legal entities are required to declare their income and financial assets, including those held in Revolut accounts. If you use Revolut to receive income (e.g., salaries, freelance payments) or for investments (e.g., stock or cryptocurrency trading), you must declare this income to the National Revenue Agency (NAP).
What Information is Provided to NAP?
Revolut collects various types of user data that may be shared with NAP under specific circumstances. This data includes:
- Personal Information: Names, addresses, identification numbers, identity documents, and other identifying details.
- Financial Transactions: Details of completed payments, transfers, received and sent funds, including information on recipients and senders.
- Account Balances: Information on current balances in users’ accounts, including business accounts used by freelancers and small businesses.
If there are suspicions of tax fraud or other financial violations, this information may be provided to NAP for further investigation.
The Process of Information Transfer Between Revolut and NAP
If you use Revolut as a business account, it is important to know that this financial tool follows strict procedures for collecting, storing, and transferring data, ensuring the security and confidentiality of users’ personal information. Data is stored in secure databases and protected with multiple security layers.
When NAP requests information from Revolut, the process includes a thorough review of the request and the provision of necessary data in compliance with applicable laws and regulations. Revolut also implements various security measures to ensure that users’ personal information does not fall into the wrong hands.
Impact on Users
For Revolut users in Bulgaria, it is important to understand what this means for their financial information and what their rights and obligations are.
If you use Revolut to manage your income as a freelancer, you should be aware that some of your information may be shared with NAP. This includes the obligation to declare all income and comply with tax regulations while ensuring accuracy and transparency in reporting your financial transactions.
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If you have a Revolut account and are a Bulgarian taxpayer, you must submit the following documents to NAP:
- Annual Tax Declaration (under Article 50 of the Personal Income Tax Act) – for all income, including that received in Revolut.
- Statement of Received Income – if you have earned income from abroad or hold financial assets abroad, you must declare them.
- Tax Due Declaration – if you have made profits from trading financial instruments, such as stocks or cryptocurrencies.
In addition to the main annual tax declaration and income statement, you may also need to submit the following documents to NAP if you use Revolut:
- Declaration under Article 55 of the Personal Income Tax Act – if you have earned rental income, freelance payments, or other taxable income.
- Declaration under Article 73 of the Personal Income Tax Act – if you are an employer or payer of taxable income.
- Declaration of Foreign Bank Accounts – if you hold funds abroad exceeding a certain threshold.
Each of these documents depends on your specific income and financial situation.
Here are some of the main regulations related to income and financial asset reporting to NAP that may apply if you use Revolut:
- Regulation No. H-18 of the Ministry of Finance – regulates requirements for fiscal devices and sales registration, including for e-commerce.
- Regulation No. H-9 of the Bulgarian National Bank – sets rules and conditions for declaring monetary funds and financial assets held abroad.
- Personal Income Tax Act (PITA) – contains the main tax rules for income, including that earned through platforms like Revolut.
- Corporate Income Tax Act (CITA) – applicable if you use Revolut for business purposes.
These regulations and laws govern the declaration and taxation of income and assets.
Comparison with other financial institutions
Revolut differs from traditional banks in how it provides its services, but its obligations to regulatory authorities are similar.
Regarding information sharing with NAP, Revolut follows the same principles of accountability and transparency that apply to all banks and financial institutions.
The main advantages of using Revolut include speed, convenience, and lower fees, making it an attractive choice for freelancers.
However, users must be cautious and well-informed about the legal requirements associated with using these modern financial services.
Conclusion
It is important to emphasize that Revolut is a financial institution required to comply with strict reporting and transparency regulations imposed by both the European Union and Bulgarian regulatory authorities.
Those who use Revolut as a business account must be particularly mindful of reporting requirements and providing data to NAP. While the platform offers significant benefits for small businesses and freelancers, tax compliance obligations remain in effect, whether for personal or business accounts.
Revolut users can rest assured that their data is collected and transmitted in accordance with the highest security standards and personal data protection. In this context, choosing Revolut as a financial partner remains an attractive and reliable option for many freelancers and self-employed professionals in Bulgaria.
