• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 2/12/2014

Bulgaria - Taxpayers can direct application of payments to taxes 

February 12:  Bulgaria’s constitutional court issued a decision holding as unconstitutional, a provision of the tax and social security procedure law that provided that tax and social security liabilities were to be settled in the order in which they arose.

The case identifying information is: Decision No. 2 (4 February 2014) under constitutional case No. 3/2013.

Accordingly, a provision directing for the settlement of social security liabilities in the order of their occurrence is repealed. The decision, therefore, reinstates pre-2013 provisions on what is the order of tax and social security liabilities being settled with remittances.

Tax liabilities generally are resolved and settled in the order of their occurrence; however, if for the current year, taxpayers may select which tax liability is being settled. Accordingly:

  • A payment may be allocated for settlement of liabilities from previous years.
  • If there are no liabilities from previous years but at the date of payment there are several liabilities from the current year, the taxpayer may select which liability is being settled with the payment.

KPMG observation

Implications of the decision are that taxpayers will again have the option to indicate which social security liability is being settled with a payment. With respect to tax liabilities, this choice is available only for liabilities from the current year.

Read a February 2014 report [PDF 92 KB] prepared by the KPMG member firm in Bulgaria: Constitutional Court of Bulgaria: The single tax and social security account is unconstitutional

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now