Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria
The widely spread monetary character of financial receivables and obligations allows the use of the legal concept of set-off in financial law as well. This article considers the influence of the specificities of regulated public relations and the sovereign method applied in financial law on the requ...
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Інститут економіки промисловості НАН України
2015
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| Цитувати: | Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria / P.V. Dimitrov // Економічний вісник Донбасу. — 2015. — № 4 (42). — С. 76-81. — Бібліогр.: 16 назв. — англ. |
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irk-123456789-1093212016-11-25T03:02:30Z Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria Dimitrov, P.V. Finance The widely spread monetary character of financial receivables and obligations allows the use of the legal concept of set-off in financial law as well. This article considers the influence of the specificities of regulated public relations and the sovereign method applied in financial law on the requirements and the conditions for the use of set-off for the purposes of the discharge of financial receivables and obligations.This article analyses the general and the special legal framework regulating the requirements and the conditions for the use of set-off for the purposes of the discharge of financial receivables and obligations. It considers different cases where the set-off of financial receivables and obligations is allowed - set-off by revenue organs, set-off by the organ competent to determine the financial obligation, set-off during an enforcement procedure, as well set-off of financial receivables and obligations in accordance with certain special laws.A particular attention is given to the sovereign act on the basis of which the set-off of financial receivables and obligations is performed - the set-off act, as well as the organs competent for its issuance. Широковідомий монетарний характер фінансової заборгованості і зобов'язань надає можливість застосування юридичного інституту заліку також і в фінансовому праві. Розглядається вплив специфіки отрегульованих суспільних відносин і застосовуваного незалежного методу у фінансовому праві на вимоги і умови для використання заліку з метою сплати фінансової дебіторської заборгованісті і зобов'язань.Проаналізовано загальна і спеціальна правові основи вимог і умов, при яких можливе погашення на основі заліку фінансових заборгованостей і зобов'язань. Розглянуто окремі гіпотези, в яких допущено залік фінансової заборгованості і зобов'язань державними органами, залік органом, в компетенції якого перебуває встановлення фінансового обов'язка, залік в процесі здійснення примусового виконання, а також залік фінансової заборгованості і зобов'язань в порядку спеціальних законів. Особливу увагу приділено акту, на основі якого здійснюється залік фінансової заборгованості і зобов'язань, а також компетентним органам видачі. Широко распространенный монетарный характер финансовой задолженности и обязательств предоставляет возможность применения юридического института зачета также и в финансовом праве. Рассматривается влияние специфики отрегулированных общественных отношений и применяемого независимого метода в финансовом праве на требования и условия для использования зачета в целях уплаты финансовой дебиторской задолженности и обязательств.Проанализированы общая и специальная правовые основы требований и условий, при которых возможно погашение на основе зачета финансовых задолженностей и обязательств. Рассмотрены отдельные гипотезы, в которых допущен зачет финансовой задолженности и обязательств государственными органами, зачет органом, в компетенции которого находится установление финансовой обязанности, зачет в процессе осуществления принудительного выполнения, а также зачет финансовой задолженности и обязательств в порядке специальных законов. Особое внимание уделено акту, на основе которого осуществляется зачет финансовой задолженности и обязательств, а также компетентным органам выдачи. 2015 Article Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria / P.V. Dimitrov // Економічний вісник Донбасу. — 2015. — № 4 (42). — С. 76-81. — Бібліогр.: 16 назв. — англ. 1817-3772 http://dspace.nbuv.gov.ua/handle/123456789/109321 336.22+336.275(497.2) en Економічний вісник Донбасу Інститут економіки промисловості НАН України |
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Digital Library of Periodicals of National Academy of Sciences of Ukraine |
| collection |
DSpace DC |
| language |
English |
| topic |
Finance Finance |
| spellingShingle |
Finance Finance Dimitrov, P.V. Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria Економічний вісник Донбасу |
| description |
The widely spread monetary character of financial receivables and obligations allows the use of the legal concept of set-off in financial law as well. This article considers the influence of the specificities of regulated public relations and the sovereign method applied in financial law on the requirements and the conditions for the use of set-off for the purposes of the discharge of financial receivables and obligations.This article analyses the general and the special legal framework regulating the requirements and the conditions for the use of set-off for the purposes of the discharge of financial receivables and obligations. It considers different cases where the set-off of financial receivables and obligations is allowed - set-off by revenue organs, set-off by the organ competent to determine the financial obligation, set-off during an enforcement procedure, as well set-off of financial receivables and obligations in accordance with certain special laws.A particular attention is given to the sovereign act on the basis of which the set-off of financial receivables and obligations is performed - the set-off act, as well as the organs competent for its issuance. |
| format |
Article |
| author |
Dimitrov, P.V. |
| author_facet |
Dimitrov, P.V. |
| author_sort |
Dimitrov, P.V. |
| title |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria |
| title_short |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria |
| title_full |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria |
| title_fullStr |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria |
| title_full_unstemmed |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria |
| title_sort |
set-off as a means for extinguishing financial (public) obligations in the republic of bulgaria |
| publisher |
Інститут економіки промисловості НАН України |
| publishDate |
2015 |
| topic_facet |
Finance |
| url |
http://dspace.nbuv.gov.ua/handle/123456789/109321 |
| citation_txt |
Set-off as a Means for Extinguishing Financial (Public) Obligations in the Republic of Bulgaria / P.V. Dimitrov // Економічний вісник Донбасу. — 2015. — № 4 (42). — С. 76-81. — Бібліогр.: 16 назв. — англ. |
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Економічний вісник Донбасу |
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1837030583673290752 |
| fulltext |
P. Dimitrov
76
Економічний вісник Донбасу № 4(42), 2015
UDC 336.22+336.275(497.2)
P. Dimitrov,
PhD (Law), Ass. Prof.,
Republic of Bulgaria, Svishtov
SET-OFF AS A MEANS FOR EXTINGUISHING FINANCIAL (PUBLIC) OBLIGATIONS
IN THE REPUBLIC OF BULGARIA
Introduction
The execution of financial obligations in the Re-
public of Bulgaria can take three forms: voluntary exe-
cution, set-off and enforcement. Therefore, set-off is
one of the forms of execution. Set-off is also a main le-
gal means in the Bulgarian legal system which finds a
wide application both in civil and commercial law, and
in financial law.
It is widely accepted in legal theory that set-off is
defined as the means to extinguish two counter and liq-
uid receivables (obigations) up to the amount of the
lower thereof. This is the extinction of an obligation
through the set-off thereof against a counter receivable
which the debtor holds against its creditor. The common
conditions for the performance of a set-off are: two ex-
isting counter receivables/obligations having identical
subjects, homogeneity and substitutability of the object
of the counter receivables/obligations, liquidity of the
counter receivables/obligations, and the receivables be-
ing due and payable.
The widely spread monetary character of financial
receivables and obligations allows set-off to be used
also in financial law. The subject of the present study is
the influence of the specifics of regulated public rela-
tions and the sovereign method applied in financial law
on the requirements and the conditions for the extinction
of financial receivables and obligations through set-off.
The legal framework of the requirements and the
conditions for the extinction/discharge of financial re-
ceivables and obligations through set-off may be general
and specific.
The general legal framework is contained in the
Taxation and Social Security Procedural Code (TSPC)
1, which regulates the three hypotheses where the set-off
of financial receivables and obligations is allowed.
1. Set-off by the revenue organs
Revenue organs have the right to extinguish due
and payable public (including financial) obligations
which are collected by them through set-off thereof
against paid or collected, but undue, sums received
from financial debtors for taxes, obligatory social secu-
rity payments, fines and property sanctions, as well as
sums liable for reimbursement by the National Revenue
Agency (NRA) in accordance with the fiscal or the so-
cial security legislation. In this case, set-off may be per-
formed also as against an obligation extinguished by a
time bar, when the receivable of the debtor became due
1 Published in the National Gazette (NG), issue 105 of 29 December 2005, last amended and supplemented – NG, issue
94 of 4 December 2015.
and payable before its obligation was thus extinguished
(Art.128(1) TSPC).
The set-off of public (including financial) obliga-
tions is forbidden when the execution of one of the ob-
ligations has been deferred or delayed, due to it hence
not being due and payable.
In the cases where the debtor’s receivable arises
from an unduly paid or liable for reimbursement excise
duty, the legislator has limited the type of obligations
against which set-off may be exercised. Such receivable
may be set off only for the purposes of discharging due
and payble public obligations of the same person and
which are collected by the “Customs” Agency. The
competent organ to perform the set-off is the director of
the customs at the domicile or the seat of the person con-
cerned or of the location of the fiscal warehouse – where
the person in question is a licensed wearhouse owner, or
the competent customs bureau which has issued the rel-
evant certificate of customs registration.
In the case here considered, the set-off may be per-
formed both at the initiative of the revenue organ/cus-
toms organ, and at the written request of the debtor. The
request for set-off is considered if it is submitted within
5 years, counted from 1 January of the year which fol-
lows the year in which the basis for the reimbursement
of the relevant sum has arisen, unless the law provides
otherwise. In the cases where the financial debtor has
requested the set-off, the competent revenue organ eval-
uates the merits of the request and can impose the per-
formance of an inspection or a check to determine
whether the conditions provided for by law for that pur-
pose are present (Art.129(2) TSPC).
The set-off of financial counter receivables/obliga-
tions is performed through a unilateral sovereign voli-
tion of the competent revenue organ/customs organ. For
this purpose, a set-off act is issued within 30 days of re-
ceipt of the request therefor, unless an inspection is
scheduled for that period. The non-response within the
same period on a request for a set-off act is considered
an implicit refusal. If the person concerned has not ap-
pealed such implicit refusal, they can submit a new set-
off request by the end of the time bar period.
The sovereign volition of the competent revenue
organ cannot be changed by the debtor. The latter cannot
indicate another obligation for set-off which is different
than the one set off by the competent revenue organ.
As from the moment of the set-off, no execution of
the extinguished obligations can be required, as it would
P. Dimitrov
77
Економічний вісник Донбасу № 4(42), 2015
be without legal basis. Neither party owes any interest
to the other, but if any interest is paid it remains subject
to reimbursement to the payor.
The set-off act, and the implicit or the express re-
fusal for its issuance can be appealed in accordance with
administrative procedure (before the director of “” in the
NRA, and when it was issued by a customs organ – be-
fore the director of the “Customs” Agency) and before
court. The petition therefor must be submitted within 14
days as from the receipt of the act of refusal of set-off or
as from the end of the decision period in the case of an
implicit refusal. When an implicit refusal is cancelled by
administrative or judicial procedure, any express refusal
which has followed before the taking of the cancelling
decision is also considered cancelled.
Although by exception, the possibility to set off
due and payable public (including financial) obligations
against undue but paid or collected sums from financial
debtors for taxes, obligatory social security payments,
fines or property sanctions, as well as sums liable for
reimbursement by the NRA in accordance with the fis-
cal or the social security legislation, is not only its legal
right but also its obligation. Such obligation for the rev-
enue organs arises when an enforceable administrative
or judicial act or decision is presented to them, and
which recognizes, to the benefit of the debtor, the right
to reimbursement of sums constituting incorrectly or un-
duly paid or collected taxes, obligatory social security
payments, fines or property sanctions. In these cases, the
set-off obligation must be executed within 30 days as
from the presenting of the relevant administrative or ju-
dicial act or decision.
The set-off is performed up to the amount of the
lower obligation, in compliance with the legally estab-
lished sequence of extinction of financial obligations.
As a result of the set-off, the financial legal relation
changes, as one of the obligations in its content is extin-
guished. As from the moment of the extinction of the
counter obligations, the accrual of interest on arrears
also stops.
2. Set-off by the competent organ for the deter-
mination of the financial obligation
Outside of the cases outlined above, until the start
of the enforcement of the financial obligation, the latter
may be set off by the organ which is competent to de-
termine such obligation. This organ is set out by the
law which regulates the relevant financial obligation. If
the relevant law does not indicate the organ which is
competent to determine such obligation, such organ is
inidicated by the director of the relevant central admi-
nistration, respectively the mayor of the municipality.
The manner for the determination of the financial obli-
gation in respect of its basis and amount is by rule regu-
lated in the relevant law, but if the latter does not contain
any provisions in that regard, this is done by an act for
public receivable, which act is issued in the manner for
1 Published in the NG, issue 30 of 11 April 200, last amended and supplemented – NG, issue 27 of 25 March 2014.
2 Published in the NG, issue 63 of 4 August 2006, last amended and supplemented – NG, issue 95 of 8 December 2015.
issuance of administrative acts provided in the Code of
Administrative Procedure1 (Art.166(2) TSPC). This act
can be appealed in accordance with the administrative
procedure before the mayor of the municipality in the
case of public municipal receivable, and before the di-
rector of the relevant administration in the case of a pub-
lic state receivable, in accordance with the rules of the
Code of Administrative Procedure.
In the case considered, the organ which is compe-
tent to determine the financial obligation is obliged to
perform the set-off on its initiative, a basis exists for ex-
tinguishing the financial obligation with a due and pay-
able receivable of the debtor for excess sums or such li-
able for reimbursement, and relating to financial obliga-
tions and acts issued by the same organ and which is
competent for their determination. A set-off against a fi-
nancial obligation extinguished by time bar is possible
here as well, when the debtor’s receivable became due
and payable before its obligation was thus extinguished.
By exception, the debtor may also request that set-
off be performed. If the competent organ refuses to do
so, such refusal is also subject to appeal by the debtor,
but in accordance with the rules of the Code of Admin-
istrative Procedure within 7 days as from the announce-
ment of the refusal.
3. Set-off during an enforcement procedings
After the start of enforcement procedings in respect
of a financial obligation, but before the date of the public
sale, the extinction of such obligation through set-off re-
mains possible. Therefore, when basis for a set-off is
found during the enforcement procedure for financial
obligations, on the debtor’s request or the public of-
ficer’s initiative the procedure must be stopped. The halt
remains until the end of the set-off steps’ completion but
for no longer than 3 months, unless an inspection is
scheduled. The procedure is put on hold on the decision
of the public officer to whom the debtor has presented
written evidence certifying the basis for the set-off. The
public officer is obliged to send the request together
with the evidence to the relevant organ which is compe-
tent to perform the set-off. If as a result of the set-off the
obligation is wholly or partially discharged, the enforce-
ment procedure is ended or is continued for the remain-
der of the obligation, respectively. The set-off influ-
ences also any security interests undertaken by the en-
forcement organs, since the extinction of the main obli-
gation extinguishes also the security interests related
thereto.
4. Set-off of financial receivables and obliga-
tions in accordance with the special laws
4.1. Set-off in accordance with the Law on the
Value Added Tax (LVAT)2
Value added tax is imposed on all transactions per-
formed for a consideration and having a translative ef-
fect, as well as on the import of goods, performed by all
persons registered under the LVAT. The VAT sum paid
P. Dimitrov
78
Економічний вісник Донбасу № 4(42), 2015
by the taxable person registered under the LVAT on the
purchases made by it, as well as in the case of import of
goods - including before the date of its registration if
they are available on the date of such registration, is de-
termined by a tax credit which may be whole or partial.
The tax credit is by its nature a financial receivable of
the person registered under the LVAT against the state
budget. On the basis of the existing legal framework, the
taxable person has the legal right to set-off against (to
deduct from) its fiscal obligations for payment of VAT
the sum constituting its tax credit.
The taxable person may exercise their set-off (de-
duction) right of the tax credit sum for the fiscal period
during which this right has arisen or in one of the next
12 fiscal periods. A fiscal period within the meaning of
the LVAT is the time period after the end of which the
registered person must submit a reference-declaration
with the results for such period. This period is of 1
month for all registered persons and coincides with the
calendar month. The result for the fiscal period is the
difference between the aggregate sum of the tax payable
by the relevant person for this fiscal period and the ag-
gregate sum of the tax credit for which the set-off right
has been exercised for this fiscal period. The registered
person determines by themselves the result for each fis-
cal period – tax to be paid in the state budget or tax to
be reimbursed by the state budget.
The right to set off the tax credit against the tax ob-
ligations to pay VAT of the same person arises upon the
performance by such person of the following two obli-
gations: to include the amount of the tax credit when de-
termining the result for the relevant fiscal period and to
indicate the document relating thereto in the purchases
diary for such fiscal period.
In the cases where the result for the relevant fiscal
period is a tax to be reimbursed by the state budget, a
new legal right arises together with a corresponding ob-
ligation for the competent revenue organ to set off this
obligation of the budget against other existing, due and
payable public obligations of the registered person
which are collected by the National Revenue Agency, if
they have come into being by the date of submission of
the reference-declaration. When exercising this right the
competent revenue organ is obliged to follow the below
sequence:
- in the presence of other due and payable and un-
paid fiscal and social security payments obligations col-
lected by the National Revenue Agency, and arisen by
the date of the submission of the reference-declaration,
the revenue organ sets off these obligations against the
tax to be reimbursed as indicated in the reference-decla-
ration;
- when there are no due and payable and unpaid
obligations of the types mentioned above, as well as in
respect of the remainder left after their discharge, the
registered person sets off the tax to be reimbursed or its
remainder against the tax due to be paid in as indicated
1 Published in the NG, issue 95 of 8 December 2015.
in the reference-declarations submitted in the next two
consecutive fiscal periods;
- if after the end of the indicated fiscal periods there
is a remainder of the tax to be reimbursed, the revenue
organ sets off this remainder against, and in discharge
of, due and payable public receivables collected by the
National Revenue Agency, or reimburses it within 30
days as from the submission of the last reference-decla-
ration.
The LVAT provides also two special cases where
the right to set-off in respect of a formed tax credit may
arise.
А) Right of set-off of tax credit for available assets
and received services before the registration date
The person registered for the purposes of VAT tax-
ation receives the right of set-off of tax credits for the
assets, within the meaning of the Law on Accounting,
purchased or otherwise acquired before the date of its
VAT registration. This legal right arises only for any
available assets if at the same time the conditions pro-
vided for by Art. 74(2) LVAT have also been fulfilled.
This legal right of set-off of tax credit arises also for ser-
vices received before the date of the VAT registration.
The set-off right of tax credit in the case here con-
sidered arises on the date of the person’s registration un-
der the LVAT, but subject to the following condition –
that the registered person provides a registration inven-
tory of such assets and services within 45 days. The right
of set-off of tax credit ends if the registered person has
submitted the registration inventory of the assets and
services after the 45th day as from the registration date.
This legal right may be exercised during the fiscal pe-
riod during which it has arised or in one of the next 12
fiscal periods, with the available assets, the services re-
ceived and the tax included in the registration inventory
being reflected in the purchases diary for that fiscal pe-
riod.
B) Right of set-off of tax credit for a second regis-
tration
The registered person has the right to set off the tax
calculated and paid by it in case of it’s de-registration
under the LVAT for the assets which are available as at
the date of the subsequent registration. In this case, the
legal right arises when the following cumulative con-
ditions have been fulfilled: the assets available, within
the meaning of the Law on Accounting1, at the date of
the subsequent registration under the LVAT have been
taxed at the de-registration and are intended to be used
to make taxable supplies; the tax calculated at the de-
registration has been effectively paid in or has been set
off by the revenue organ; a registration inventory on ba-
sis of an example has been submitted for the assets no
later than 45 days as from the registration date.
The set-off right in this case arised on the date of
the second registration under the LVAT, but subject to
the following condition – that the person who has regis-
tered for the second time submits a registration inven-
P. Dimitrov
79
Економічний вісник Донбасу № 4(42), 2015
tory of the assets and services within 45 days. If the reg-
istered person does not comply with this deadline, its le-
gal right of set-off is extinguished.
The set-off right may be exercised during the fiscal
period during which it has arisen or in one of the next
12 fiscal periods, with the available assets and the tax
included in the registration inventory being reflected in
the purchase diary for that fiscal period.
4.2. Set-off under the Law on corporate revenue
taxation (LCIT)1
One of the taxes regulated by the LCIT is the cor-
poration tax. The taxable object thereof is the fiscal
profit determined in accordance with the rules and con-
ditions provided in such law. The perception of corpo-
ration tax is yearly therefore the fiscal period for its de-
termination is a calendar year. The fiscal period for
newly-incoporated taxable persons covers the period
from the date of their incorporation to the end of the rel-
evant year and for liquidated ones – the period from the
beginning of the relevant year until the date of their liq-
uidation, unless otherwise provided by law.
On the basis of the fiscal financial results indicated
in the tax declaration from the previous year and the pro-
jected fiscal profit for the current year, tax debtors must
make monthly or quarterly advance payments for corpo-
ration tax. The obligation to make monthly advance pay-
ments exists for taxable persons whose net revenue from
sales for the preceding year is above 3,000,000 lv., and
all other taxable persons must make quarterly advance
payments. The following are not obliged to make ad-
vance payments: taxable persons whose net revenue
from sales for the preceding year is below 350,000 lv.,
and newly-incoporated taxable persons for the year of
their incorporation other than those coming into exist-
ence as a result of a transformation in accordance with
the Commercial Law.
The monthly and quarterly advance payments are
made in the amounts determined by the formulae set out
in the law. The amount of the advance payments due by
the taxable persons to whom corporation tax is assigned
for the current year is reduced proportionally to the
amount of the assigned portion of the tax. The taxable
persons can on their own initiative reduce the amount of
their advance payments, when they consider that they
exceed the yearly corporation tax due. This right can be
exercised through the submission of a declaration based
on example to the competent territorial directory of the
NRA.
The monthly advance payments are made by the
15th of the month for which they pertain, and the quar-
terly are made by the 15th of the month following the
1 Published in the NG, issue 105 of 22 December 2006, last amended and supplemented – NG, issue 95 of 8 December
2015.
2 Published in the NG, issue 101 of 23 November 2001, last amended and supplemented – NG, issue 95 of 8 December
2015.
3 Published in the NG, issue 95 of 24 November 2006, last amended and supplemented – NG, issue 95 of 8 December
2015.
quarter for which they pertain - there is no advance pay-
ment for the fourth quarter.
After the end of the calendar year, the tax debtors
who are subject to corporation tax must, by 31 March of
the next year, submit a yearly fiscal declaration (based
on example) for the fiscal result and the yearly corpora-
tion tax due. The declaration’s obligatory annexes are:
yearly activity account including its annexes and, if ap-
plicable, a copy of the report under the Law on Inde-
pendent Financial Audit2. The taxable persons who at
the same time have complied with the following condi-
tions are not obliged to submit a yearly activity account:
they have had no activity during the year and they have
not reported any revenues or expenses for the year in
accordance with the accounting legislation.
When calculating the corporation tax due in the
yearly fiscal declaration, the taxable persons have the
right to a tax credit for taxes which are similar to, or
were imposed instead of, corporation tax, and were paid
abroad. The amount of the tax credit is determined sep-
arately for each country and type of revenue and is lim-
ited to the amount of the Bulgarian tax imposed on such
profits or revenues.
The declaration is submitted at the territorial direc-
tory of the National Revenue Agency at the registered
office of the taxable person. The corporation tax due
must be paid in the state budget by 31 March of the next
year. For that purpose, a set-off is performed between
the tax due and the advance payments made for the rel-
evant year.
If the yearly corporation tax due based on the
yearly fiscal declaration is lower than the the advance
payments made for the relevant year, the tax debtor may
set off the excess against subsequent advance and yearly
payments due by it for the same tax, for the year follow-
ing the one for which the excess exists.
4.3. Set-off under the Law on the taxes over the
revenues of natural persons (LTRNP)3
The LTRNP regulates the taxation of revenues of
all kinds, received by national and foreign natural per-
sons during the fiscal year, except for revenues which
are declared as non-taxable under the same law. The rev-
enues’ taxation is performed for the year which coin-
cides with the calendar year. The yearly taxable revenue
and the yearly tax base are determined separately for
each revenue source, while the revenues liable to be
taxed with final taxes are excluded. The rules for deter-
mining the taxable revenue for each type of revenue
source differ. The yearly tax bases calculated for the rev-
enues of the taxable persons (with the exception of rev-
enues from economic activities as unipersonal trader,
revenues from other economic activities and from patent
P. Dimitrov
80
Економічний вісник Донбасу № 4(42), 2015
activies) form the aggregate yearly tax base, on the basis
of which the tax due is calculated.
Despite taxation being performed for a fiscal year,
in the presence of taxation of revenues from several
sources it is required that advance payments are made
during the year – i.e. revenues from employment activi-
ties, from economic activities including by natural per-
sons who are not traders within the meaning of the Com-
mercial Law, rent or other revenues from the usage for
consideration of rights and property, as well as revenues
from other sources under Art.35 LTRNP.
Thus employers, in their capacity as taxable per-
sons in respect of the tax over revenues from employ-
ment activities, are obliged to make advance payments
each month on the basis of the monthly tax base at the
final payment of the taxable revenue calculated for the
relevant month. The amount of the advance payment is
determined by multiplying the monthly tax base by
10%.
Tax debtors who are natural persons performing
economic activity as traders, within the meaning of the
Commercial Law, including unipersonal traders, make
advance payments at a tax rate of 15%, in accordance
with the rules and conditions set out in the LCIT. Natu-
ral persons who are not traders, within the meaning of
the Commercial Law, make advance tax payments at
10% of the taxable economic activity revenue. Natural
persons receiving rent or other revenues from the usage
for consideration of rights and property owe tax at 10%
of the difference between the taxable revenue and the
social security payments which such persons are obliged
to make for their own account. There are no advance
payments to be made on revenues perceived during the
fourth quarter of the fiscal year.
After the end of the calendar year, national natural
persons submit a yearly fiscal declaration based on ex-
ample for:
- the revenues perceived during the year and taxa-
ble on the aggregate yearly tax base and the yearly tax
base;
- the revenues taxable with patent tax under the
Law on Local Taxes and Duties;
- the revenues perceived during the year from
sources located abroad in respect of dividends, liquida-
tion proceeds, supplemental voluntary insurance, volun-
tary health insurance and life insurance;
- shares held in companies, locations of economic
activity, establishments and real estate situated abroad,
as well as monetary loans granted and received.
Foreign natural persons submit yearly fiscal decla-
ration only for the revenues perceived during the year
and taxable on the aggregate yearly tax base and the
yearly tax base, as well as the revenues taxable with pa-
tent tax under the Law on Local Taxes and Duties.
When completing their yearly fiscal declaration,
the taxable natural persons have the right and the obli-
gation to set off the sums of the advance tax payments
made by them during the fiscal year against the final tax
amount calculated in the declaration. The national natu-
ral persons have the right to set off also the final revenue
tax paid in during the tax year as per Art.37 LTRNP.
When the calculated yearly amount of the revenue
tax on revenues from employment activities is lower
than the tax paid in advance, the employer is obliged, by
31 January of the next year, to reimburse the difference
to the person concerned. In these cases, such person has
a right of set-off between this reimbursed sum and any
subsequent payments which they must make to the state
budget for taxes on revenues from employment activi-
ties of themselves or other person(s) (Art.49(6) and (7)
LTRNP).
Conclusion
In conclusion, it can be pointed out that set-off is a
method widely used in practice for the discharge of fi-
nancial obligations. Its application is conditional upon
specific circumstances regulated by both the TSPC and
the special laws (the LVAT, the LCIT and the LTRNP).
Set-off serves both a discharge and a security func-
tion. As a result of the discharge function, the financial
legal relation is changed, due to one of the obligations,
and any security interests undertaken in regard to such
obligation, being both discharged. As from the moment
of the discharge of the counter obligations, the accrual
of interest on arrears stops as well, and the debtor is re-
leased from its obligation.
The security function is linked to the defence of
public interests and serves as a guarantee against an
eventual insolvency of the financial debtor.
The sole holder of the potestative legal right to per-
form set-off is the state. Therefore, such set-off right is
exercised by the competent organs through a unilateral
sovereign volition, even in the cases where the exercise
thereof is performed on the initiative of the debtor. This
method of discharge is hence applicable regardless of
the debtor’s will.
References
1. Angelov, A. Financial Law of NRB. Sofia Uni-
versity “Kliment Ohridski”, Sofia, 1970, p.100-108.
2. Apostolov, I. Obligations Law, Part One General
Study of the Obligation. Publishing house of the Bulgar-
ian Sciences Academy, Sofia, 1990, p.346-361. 3. Bra-
tanov, B. Set-off as a Means of Discharge of Public Re-
ceivables (Tax Aspects). // Legal Thought, Sofia, 2007,
issue 3. 4. Bachvarova M., Nikolaeva G., Tsetkovska
M., Tax Procedure. Publishing house “Science and
Economy”, Economic University – Varna, 2010, p.134-
143. 5. Vasileva, M. Right to Tax Credit in Respect of
VAT Registration for Available Assets Taxed during the
Previous De-Registration – Tax Practice. // Accounting,
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dikin, L. Set-off and Reimbursement of Payments for
Taxes, Obligatory Social Security and Other Public Re-
ceivables. // Lawyers Digest, 2006, issues 10 – 11.
7. Georgieva, N. Reimbursement and Set-off of Pay-
ments. // Finance and Law, 2004, issue 3. 8. Dimitrov,
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Tax. AP “Tsenov”, Svishtov, 2012, p.95. 9. Dimitrov,
P. Financial Law. AP “Tsenov”, Svishtov, 2012, p.82,
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Art”, Sofia, 1958, p.404-421. 11. Kuchev, Str. Fiscal
Execution Law. Publishing house “LiStra”, 2000, p.66-
88. 12. Minkova, G. Fiscal Obligations. “Ciela”, Sofia,
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1996, p.166-180. 14. Rachev R., Nikolaeva G.,
Tsetkovska M., Commercial and Financial Law. Pub-
lishing house “Science and Economy”, Economic Uni-
versity – Varna, 2008, p. 214-224. 15. Nikolaeva, G.
Financial Law. Publishing house “Science and Econ-
omy”, Economic University – Varna, 2011, p. 62-67.
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cedure. “Feneya”, Sofia, 2001, p.92-93.
Димитров П. Залік як засіб погашення пуб-
лічних фінансових зобов'язання в Республіки
Болгарія
Широковідомий монетарний характер фінансо-
вої заборгованості і зобов'язань надає можливість
застосування юридичного інституту заліку також і в
фінансовому праві. Розглядається вплив специфіки
отрегульованих суспільних відносин і застосовува-
ного незалежного методу у фінансовому праві на ви-
моги і умови для використання заліку з метою
сплати фінансової дебіторської заборгованісті і зо-
бов'язань.
Проаналізовано загальна і спеціальна правові
основи вимог і умов, при яких можливе погашення
на основі заліку фінансових заборгованостей і зобо-
в'язань. Розглянуто окремі гіпотези, в яких допу-
щено залік фінансової заборгованості і зобов'язань
державними органами, залік органом, в компетенції
якого перебуває встановлення фінансового обов'я-
зка, залік в процесі здійснення примусового вико-
нання, а також залік фінансової заборгованості і зо-
бов'язань в порядку спеціальних законів. Особливу
увагу приділено акту, на основі якого здійснюється
залік фінансової заборгованості і зобов'язань, а та-
кож компетентним органам видачі.
Ключові слова: залік фінансової заборгованості
і зобов'язання, акт заліку, податок на додану вар-
тість, податковий кредит, корпоративний податок,
оподаткування фізичних осіб, оподаткування дохо-
дів.
Димитров П. Зачет как средство погашения
публичных финансовых обязательства в Респуб-
лики Болгария
Широко распространенный монетарный харак-
тер финансовой задолженности и обязательств
предоставляет возможность применения юридиче-
ского института зачета также и в финансовом праве.
Рассматривается влияние специфики отрегулиро-
ванных общественных отношений и применяемого
независимого метода в финансовом праве на требо-
вания и условия для использования зачета в целях
уплаты финансовой дебиторской задолженности и
обязательств.
Проанализированы общая и специальная пра-
вовые основы требований и условий, при которых
возможно погашение на основе зачета финансовых
задолженностей и обязательств. Рассмотрены от-
дельные гипотезы, в которых допущен зачет финан-
совой задолженности и обязательств государствен-
ными органами, зачет органом, в компетенции кото-
рого находится установление финансовой обязанно-
сти, зачет в процессе осуществления принудитель-
ного выполнения, а также зачет финансовой задол-
женности и обязательств в порядке специальных за-
конов. Особое внимание уделено акту, на основе ко-
торого осуществляется зачет финансовой задолжен-
ности и обязательств, а также компетентным орга-
нам выдачи.
Ключевые слова: зачет финансовой задолжен-
ности и обязательства, акт зачета, налог на добав-
ленную стоимость, налоговый кредит, корпоратив-
ный налог, налогообложение физических лиц, нало-
гообложение доходов.
Dimitrov P. V. Set-off as a Means for Extin-
guishing Financial (Public) Obligations in the Re-
public of Bulgaria
The widely spread monetary character of financial
receivables and obligations allows the use of the legal
concept of set-off in financial law as well. This article
considers the influence of the specificities of regulated
public relations and the sovereign method applied in fi-
nancial law on the requirements and the conditions for
the use of set-off for the purposes of the discharge of
financial receivables and obligations.
This article analyses the general and the special le-
gal framework regulating the requirements and the con-
ditions for the use of set-off for the purposes of the dis-
charge of financial receivables and obligations. It con-
siders different cases where the set-off of financial re-
ceivables and obligations is allowed – set-off by revenue
organs, set-off by the organ competent to determine the
financial obligation, set-off during an enforcement pro-
cedure, as well set-off of financial receivables and obli-
gations in accordance with certain special laws.
A particular attention is given to the sovereign act
on the basis of which the set-off of financial receivables
and obligations is performed – the set-off act, as well as
the organs competent for its issuance.
Keywords: set-off of financial receivables and ob-
ligations, set-off act, value added tax, tax credit, corpo-
ration tax, taxable persons, revenue taxation.
Received by the editors: 13.10.2015
and final form 28.12.2015
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