The NRA initiates inquiries about the “weekend tax” | KPMG | BG

The NRA initiates inquiries about the “weekend tax”

The NRA initiates inquiries about the “weekend tax”

The third issue in 2016 comments on the initiative of the revenue authorities which started several days ago regarding the provision of information about the personal use of company assets.

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The NRA’s initiative

In the last few days, we have seen action taken by the National Revenue Agency (NRA) regarding the provision of information about the personal use of company assets.

Information is being requested in two ways:

  • By a written request to provide documents and written explanations under Article 37, para. 2 and 3 of the Tax and Social Security Procedures Code and 
  • Verbally, by a telephone request to provide information in a free form, usually followed by an official written request.

Required information

Companies are required to clarify the VAT treatment of the goods used and the services provided for the personal use of the owner and the employees or for purposes other than those of the independent economic activity

The usual request is for provision of information regarding February 2016. According to the information we have, this is not related to declaring ‘personal use’ in the declaration for this month. In other words, written explanation is required in both cases when the personal use was not declared and when the personal use was declared in the VAT Sales Ledger and the VAT return for February.

In some of the requests, the NRA also requires written explanation regarding the policy the companies are going to apply for the personal use of company assets for future periods.

There are certain indications that the revenue authorities may require detailed information periodically. We presume that this could be the case when the companies do not provide information about the policy to be applied in future periods.

Recommendations and assistance by KPMG

Taking the above into consideration, it is recommended that companies:

  • Establish an internal policy and rules regarding the personal use of company assets 
  • Devise a strategy for communicating the set policy/rules to the revenue authorities 
  • Support with evidence and explanation the private use declared (not declared) in the VAT Sales Ledger and VAT return for February 2016

Upon your request, the specialists from the Tax department of KPMG in Bulgaria could assist you in implementing the above steps.

© 2017 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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