Tax audit by the Bulgarian National Revenue Agency and appealing the assessment: deadlines, objection, suspension and court

Iva Petkova, attorney · Published 2 November 2026 · 7 min

A Bulgarian tax audit ends with a tax assessment (ревизионен акт) that can establish substantial debts with interest. The deadlines to react are short, and evidence you do not provide in time can cost you the case. We explain the stages and what to do at each of them.

How we can help

An audit (ревизия) is the most thorough form of tax control. Unlike a check, it ends with an act that itself establishes debts and can be enforced. The procedure is strictly formal: every stage has a short deadline, and a missed deadline or evidence not provided is hard to put right later. The defence therefore starts when the audit order is served, not only against the final assessment.

When an audit can start

An audit starts with the issue of an audit order (Art. 112(1) of the Tax and Social Security Procedure Code). No procedure to establish tax debts may be started once 5 years have passed from the end of the year in which a tax return was filed or should have been filed (Art. 109(1)). This period does not run while criminal proceedings are pending on whose outcome the assessment depends (Art. 109(2)).

How long the audit lasts

The audit must be completed within three months of service of the order, which can be extended by up to two months (Art. 114(1) and (2)). In cases of special factual complexity, the Revenue Agency's executive director can extend it to a total of no more than three years (Art. 114(4)). During this time the revenue officers request documents and explanations and collect data from third parties. The answers to these requests are evidence in any future case, so they should be complete, consistent and backed by documents.

The audit report and the objection

The audit report is drawn up no later than 14 days after the audit period ends and served within three days (Art. 117(1) and (4)). It sets out the facts found, the conclusions and the proposed assessment (Art. 117(2)). The audited person may file a written objection and evidence within 14 days of service, and if this is not enough, the period is extended on request by no more than one month (Art. 117(5)).

The objection is the last convenient moment to produce the documents that rebut the auditors' conclusions. If evidence that could have been produced in the administrative procedure is produced only in court, the party producing it pays all the costs of the case whatever the outcome (Art. 161(3)).

The tax assessment

The assessment is issued by the officer who ordered the audit and the head of the audit within 14 days of the objection or of the end of the objection period, and served within 7 days of issue (Art. 119(2) and (4)). It establishes, amends or sets off tax and compulsory social security debts and orders refunds that are due (Art. 118(1)). An assessment can also establish the liability of managers and partners for the company's debts (Art. 21(1) with Art. 19).

Appeal to the Appeals and Tax and Social Security Practice directorate

The assessment can be appealed in whole or in part within 14 days of service (Art. 152(1)). The deciding body is the director of the competent Appeals and Tax and Social Security Practice directorate at the Revenue Agency's central office, and the appeal is filed through the territorial directorate (Art. 152(2) and (3)). The appeal can name the evidence on which an agreement is proposed (Art. 152(4)).

The deciding body issues a reasoned decision within 60 days, counted from the end of the period under Article 146, from the cure of defects in the appeal, or from approval of an agreement (Art. 155(1)). The period can be extended by mutual written agreement by up to 3 months (Art. 156(7)). The directorate may confirm, amend or set aside the assessment (Art. 155(2)), but not amend it to the appellant's detriment (Art. 155(8)). It may send the case back for a new audit only where the evidence is incomplete or there were material procedural breaches, and only once (Art. 155(4) and (5)).

Appeal to the administrative court

The part of the assessment not set aside is appealed through the deciding body within 14 days of receiving the decision, to the administrative court for the appellant's permanent address or seat at the time of the first audit step (Art. 156(1)). If the directorate does not decide in time, the assessment is deemed confirmed and the court appeal is filed within 30 days of the end of the decision period (Art. 156(4) and (5)). A part of the assessment not appealed to the directorate cannot be appealed in court (Art. 156(2)), so the appeal to the directorate must be complete.

The court decides the case on the merits and may set aside or amend the assessment or dismiss the appeal, also checking competence, form and procedure (Art. 160(1) and (2)). Witness evidence is admitted only exceptionally (Art. 158(1)). The administrative court's judgment can be appealed in cassation to the Supreme Administrative Court, except where the public debts assessed, without interest, are up to BGN 750 (EUR 383.47) for an individual or up to BGN 4,000 (EUR 2,045.17) for a legal entity, when it is final (Art. 160(7)). The appellant is awarded costs, including a lawyer's fee, in proportion to the part of the appeal upheld (Art. 161(1)).

Suspension of enforcement

Neither the appeal to the directorate nor the appeal to the court suspends enforcement of the assessment (Arts 153(1) and 157(1)). Suspension can be sought only for the part appealed. The deciding body must suspend enforcement if security covering principal and interest is given in cash, an unconditional and irrevocable bank guarantee or government securities; with other security it has discretion (Art. 153(2) to (5)). It decides within 7 days, and a refusal can be appealed to the administrative court within 7 days (Art. 153(6) and (7)). In the court phase, the court rules on a request for suspension within 14 days by an order that can be appealed to the Supreme Administrative Court (Art. 157(2) to (4)).

The most common disputed issues

• expenses and VAT credit disallowed because the auditors doubt that supplies actually took place;
• limits on deducting interest, known as thin capitalisation (Arts 43 and 43a of the Corporate Income Tax Act);
• hidden profit distribution, such as payments to partners or related parties above market levels (§ 1(5) of the Supplementary Provisions of the Corporate Income Tax Act);
• transfer pricing in transactions between related parties;
• liability of managers and partners for the company's debts (Art. 19 of the Tax and Social Security Procedure Code).

What to do during an audit

1. Check the scope of the order: which taxes and periods are audited, and whether any fall outside the 5-year period.
2. Answer requests fully and on time, and keep a copy of everything provided.
3. Prepare the evidence for disputed transactions during the audit: contracts, handover protocols, correspondence, proof of actual performance.
4. File a detailed objection to the audit report with all documents.
5. Appeal the assessment within 14 days, fully on the disputed points, and seek suspension of enforcement if the amount is significant.

Where a lawyer changes the outcome

• at the start of the audit: which documents and explanations to provide and when, since they shape the evidence in the dispute;
• against the audit report: an objection with evidence;
• on appeal: the time limits and arguments before the appeals directorate and the court;
• on a stay of enforcement: suitable security that does not block the business;
• for directors and partners: a defence where they are held liable for the company's debts.

Petkova & Minkov Law Firm represents companies and individuals in tax audits and in appeals against tax assessments before the Revenue Agency, the administrative courts and the Supreme Administrative Court. We work in Bulgarian, English, Russian and German.

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