When it comes to submitting an annual tax return, it is important to note that this is a key obligation for both freelancers and businesses in Bulgaria. Failing to complete this process can lead to serious legal and financial consequences.
In this article, we will cover all important aspects related to submitting the annual tax return after the deadline, the penalties involved, and how to avoid issues if you are late.
Deadlines for Submitting the Annual Tax Return
One of the most important things to know is the final deadline for submitting the annual tax return. For individuals practising a freelance profession, the deadline is April 30 of the following year. For example, if the income is for 2023, the submission must be completed by April 30, 2024. For businesses such as sole proprietorships (ET) and limited liability companies (EOOD), this deadline is extended to June 30.
It is not advisable to wait until the last moment because any delay leads to legal consequences and could result in a fine for failing to submit the annual tax return.
Methods for Submitting an Annual Tax Return
For self-employed individuals, including freelancers and businesses, submitting the annual tax return is mandatory only online through the NRA’s electronic portal. This method not only saves time but also ensures that your return is received on time, providing an automatic confirmation of successful submission. To do this, you need to have an electronic signature or a Personal Identification Code (PIC), which grants access to the National Revenue Agency (NAP)’s online services.
Corrective Tax Returns
If, after submitting your annual tax return, you realize that you have made a mistake—whether it be omitted income, incorrectly filled-in data, or other inaccuracies—there is no need to worry because the corrective tax return is your tool for making adjustments. It allows you to avoid additional fines and penalties as long as corrections are made within the established deadlines.
Submitting a corrective tax return is essential not only for avoiding penalties but also for ensuring compliance with tax regulations. Declaring the correct income and expenses guarantees that you won’t face future issues with tax authorities, such as additional audits or inspections.
A correction can involve both adding missing information and fixing technical errors in the initially submitted return.
For example, if you forgot to declare an expense or entered incorrect income data, the corrective tax return is the way to rectify these mistakes. This is especially useful if you are a freelancer or run your own business, where managing numerous documents and invoices can sometimes lead to unintentional errors.
It is important to remember that the corrective tax return can be submitted by September 30, so it is advisable to carefully review all data before sending it.
Differences Between Freelancers and Businesses (ET, EOOD) When Submitting After the Deadline
Freelancers face lower fines compared to businesses, but this does not mean that the consequences are insignificant.
Sole proprietors and companies are required to submit tax returns and report accurate financial data. In case of a delay, the National Revenue Agency (NAP) may take additional measures, including audits and inspections.
How Does the National Revenue Agency (NAP) Track Unsubmitted Tax Returns?
The National Revenue Agency (NAP) utilizes modern technological solutions and integrated automated systems to monitor submitted and unsubmitted annual tax returns. These systems regularly check data from various sources, including employment contracts, social security payments, and bank transactions, to determine whether an individual or business has fulfilled its obligations. Automation allows the National Revenue Agency (NAP) to quickly identify any person or company that has missed the deadline.
After the deadline has passed, the system automatically generates a list of those who have not fulfilled their obligation. It then sends initial notifications to the affected individuals or businesses. In many cases, this notification may be in the form of a letter or a message via the National Revenue Agency (NAP)’s electronic portal. The goal is to give late filers the opportunity to meet their obligations before more serious penalties are imposed.
If you do not respond to these initial warnings, the National Revenue Agency (NAP) may take stricter measures, including fines and initiating procedures to collect outstanding amounts. Depending on the extent of the delay and the nature of your business, the consequences can range from relatively small penalties to more serious legal actions and audits.
This is why it is important to pay attention to any notifications from the NRA and take the necessary actions as soon as possible to avoid future complications.
How to Minimize Consequences for Late Submission?
If you have missed the deadline for submitting your annual tax return, there is no need to panic. There are steps you can take to minimize the consequences.
One of the most important things is not to delay further. Submitting the late tax return as soon as possible will demonstrate your willingness to fulfil your obligations, even if overdue. This can reduce potential fines and prevent more severe penalties in the future.
Additionally, depending on the reason for the delay, you may consult an accountant to explore options for appealing imposed fines. In some cases, if you have a valid reason for the delay—such as health issues or other unexpected circumstances—you may be able to reduce or even avoid penalties.
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It is also crucial to expedite the process by using all available tools, such as electronic submission via the National Revenue Agency (NAP) portal.
If you need a thorough review of your documents to prevent errors, you can use professional services before submitting the tax return. This will give you peace of mind that the return is accurate and will not cause additional issues in the future.
Proactivity is the best strategy for minimizing consequences. The sooner you take action and meet your obligations, the less likely you are to face serious sanctions from the NRA.
Conclusion
Late submission of the annual tax return can lead to serious legal and financial consequences, including receiving a fine for failing to submit the tax return. Whether you are a freelancer or a business owner, it is essential to meet deadlines and use all available submission methods, such as the National Revenue Agency (NAP)’s online platforms, to avoid penalties and issues with tax authorities.
Meeting deadlines and correctly submitting tax returns are crucial for successfully managing your profession or business.
If you want to learn more about this topic or explore other useful and up-to-date subjects related to accounting for freelancers and small businesses, visit the Smetalnik blog. There, you will find more tips and guidance on effectively managing your taxes and financial obligations.
