Starting in 2026, Bulgaria will implement SAF-T (Standard Audit File for Tax) reporting, as officially confirmed by the country’s National Revenue Agency (NRA). Bulgaria is poised to enhance its tax compliance framework by introducing the SAF-T reporting, a move that aligns with international standards and aims to streamline the exchange of tax-related information between businesses and authorities. This initiative, will be implemented in phases, affecting businesses of varying sizes over the coming years. Understanding the intricacies of SAF-T, its implementation timeline, and the specific requirements is crucial for Bulgarian enterprises to ensure seamless compliance.
1. Understanding SAF-T: A Global Standard for Digital Tax Reporting
The Standard Audit File for Tax (SAF-T) is an internationally recognized electronic format developed by the Organisation for Economic Co-operation and Development (OECD). Its primary purpose is to facilitate the efficient and standardized exchange of accounting data between businesses and tax authorities. By adopting SAF-T, countries aim to enhance tax compliance, reduce administrative burdens, and improve the effectiveness of tax audits.
2. Bulgaria’s SAF-T Adoption: A Phased Rollout
Bulgaria’s approach to implementing SAF-T is methodical, with a phased rollout designed to accommodate businesses of different scales:
- 1, January 2026: Large businesses with turnover exceeding 300 million BGN in 2023 or taxes above 3.5 million BGN.
- 1, January 2027: Large, medium, and small businesses with turnover exceeding 300 million BGN in 2024 or taxes above 3.5 million BGN.
- 1, January 2028: Large, medium, and small businesses with turnover exceeding 15 million BGN in 2025 or taxes above 1.5 million BGN.
- 1, January 2029: Mandatory for large, medium, and small enterprises regardless of the turnover.
- 1, January 2030: Mandatory for micro businesses (specified under Article 2 of the Accounting Act)
This staggered implementation allows businesses to prepare and adapt their systems accordingly.
3. Detailed SAF-T Reporting Obligations
Under the SAF-T framework, Bulgarian businesses are required to submit various reports, each with its own frequency and content specifications:
- Monthly Submissions (Due by the 14th of the following month):
- General Ledger Entries: Comprehensive records of all financial transactions.
- Accounts Payable and Receivable: Detailed information on outstanding debts and credits.
- Sales and Purchase Invoices: Data pertaining to all sales and procurement activities.
- Annual Submissions (Due by June 30 of the subsequent year):
- Fixed Assets: Information on the company’s long-term assets, including acquisition costs and depreciation details.
- On-Demand Submissions:
- Inventory Data: Detailed accounts of stock levels and movements, provided upon specific request by tax authorities.
This structured reporting ensures that tax authorities have access to consistent and comprehensive data, facilitating more effective audits and assessments.
4. Grace Periods
To ease the transition into SAF-T reporting, the NRA has outlined specific timelines and grace periods:
- Initial Six-Month Grace Period: For the first six months following a business’s inclusion in the SAF-T mandate, non-compliance will not result in penalties.
- Correction Window: Businesses can amend any inaccuracies in their submitted SAF-T reports within six months of the original submission.
These provisions demonstrate the NRA’s commitment to supporting businesses through the transition.
5. Consequences of Non-Compliance
While the initial grace period offers some flexibility, continued non-compliance with SAF-T reporting obligations will attract significant penalties:
- For Individuals: Fines ranging from BGN 500 to BGN 2,000.
- For Legal Entities and Sole Traders: Penalties between BGN 5,000 and BGN 15,000.
Repeated violations can lead to doubled fines, underscoring the importance of timely and accurate submissions.
6. The Broader Implications: Embracing Digital Transformation
The introduction of SAF-T in Bulgaria aims to enhance transparency, reduce tax evasion, and streamline interactions between businesses and tax authorities. For businesses, this move presents an opportunity to modernize their accounting practices.
In conclusion, Bulgaria’s phased implementation of SAF-T reporting represents a significant advancement in the country’s tax administration system. Businesses that proactively prepare for this change will not only ensure compliance but also position themselves to reap the benefits of a more streamlined and transparent tax reporting environment.
