The NEXO scandal brings bad news for the “regular tax dodgers”

The people in Bulgaria are very well aware of the scandal that unveiled in recent weeks with the crypto platform Nexo. For those who are not aware of what happened though, as reported by Reuters, four Bulgarian nationals have already been charged for “participating in an organised crime group set up to launder money and commit tax and computer fraud“.

Borislav Sarafov, head of Bulgaria’s National Investigation Service told reporters, saying Bulgaria would take the lead in a probe that started several months ago in coordination with U.S., British and other counterparts.


But what does the Nexo scandal have to do with the “regular tax dodgers” in Bulgaria?

Tax dodgers in Bulgaria – to be investigated and charged as per the penal code

After the scandal with Nexo escalated, the politicians “found out” that the state should do more to protect its fiscal interests. Bulgaria has one of the toughest stance on tax evasion. Namely, for tax evasion of only 1534 EUR or more, there is a jail sentence foreseen of 1 to 6 years plus a fine. For tax evasion of 6136 EUR or more, the foreseen sentence by the penalty code is from 3 to 8 years plus confiscation of the personal property of the convict. Sounds horrible? We fully agree. But that’s what the Bulgarian penal code says.

Until now many tax dodgers were “flying” under the radar of the prosecution

But what is considered to be tax evasion in Bulgaria? Basically, almost everything. In virtually all cases, when the tax inspectors determine unpaid taxes, this can be considered as tax evasion. In very rare circumstances, the defendants can prove that the tax debts have been accumulated “unwillingly”.

With all that being said, so far, some believe that the prosecution has been quite “passive” towards many cases of tax evasion. Many companies in Bulgaria have been accumulating tax debts and could so far, escape criminal prosecution. This is ending very fast now. We receive more and more signals from companies and private individuals with “sleeping tax debts” that they are now being investigated and criminally charged. We have reasons to believe that this is possible to be as a direct consequence of the recent scandals and the prosecutor’s office is now making some very, very decisive steps towards putting the “regular tax dodger” behind bars.

Please read When are the tax authorities referring the case to the prosecutor? and Criminal responsibility for tax evasion in Bulgaria.

Bulgaria should increase the threshold amount of “tax evasion”

We believe that the current amount of 1534 EUR that counts for tax evasion, should be increased dramatically. We will be working hard with the authorities to bring the issue to the attention of the next parliament and will be hoping for rapid legislative changes.

If you have been criminally charged (recently) for tax evasion, you can contact us for professional assistance or a consultation about your available options. In all cases, if you have some “sleeping tax debts”, don’t count that the prosecutor’s office is overloaded and your turn will never come. These times are over, we believe.

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