Tax evasion - a national sport?

We don't like them but we gotta pay them! How does it work in Bulgaria?

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gimlet
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Tax evasion - a national sport?

Postby gimlet » Mon Oct 19, 2009 8:27 pm

Judging by this article the Bulgarian tax authorities do the same as the British when checking for undeclared income.

That is they carry out a "private side reconciliation" working out how much you have spent on your lifestyle and asking the taxpayer to account for any difference, assuming the outgoings are greater than declared income.

Stock British answers include "a win on the dogs". However, Bulgarians seem to own up to no vices except having generous friends. As a result loans of over 5,000 leva will have to be reported to the tax authoritries in future.

Keeping below that level should lead to a substantial increase in the average Bulgarian's number of generous friends!

As always, it's the collateral damage that is unpredictable. If you lend someone money, you can expect to be looked at yourself :cry:


Personal loans of more than 5000 leva to be reported to tax authorities from 2010
Mon, Oct 19 2009 11:04 CET byPetar Kostadinov

Loans of more than 5000 leva will have to be reported in people's personal income tax declarations for 2010, the National Revenue Agency (NRA) said on October 18 2009.

This is provided in amendments to the law on income tax adopted by the Cabinet last week, still to be approved by Parliament.

NRA asked for the amendments because "personal loans" were often used by taxpayers to explain the source of their incomes, BTA Bulgarian news agency said.

According to NRA, this was the explanation given on every second inspection of people's incomes when tax inspectors register discrepancies between a person's legally declared income and his or her living standard.

In one case a person said he had taken loans from 139 separate people and NRA had to check each of them.

In September an owner of a luxury Bentley vehicle told NRA he bought it with loans from 42 friends.

Two other individuals said that they had borrowed about 300 000 leva each from their own companies so that their luxury vehicles could be registered as company cars.

Another problem NRA had when performing tax checks was that very often contracts have not been verified by a notary, hence there was no proof of bank transfers between the respective parties.

According to NRA, personal loans in Bulgaria amounted to about 2.7 billion leva. Most of these loans had no interest on them and had a span of 10 years. Almost all of these loans, however, were fake and conducted with the specific purpose of avoiding taxation, BTA quoted NRA.

"Fake loans have become a national sport in Bulgaria. Every day we listen to explanations of non-existent loans. We have to put all this to an end. I am convinced that reporting loans in tax declarations will not be an administrative burden to taxpayers because we all know that these loans do not exist," NRA head Krassimir Stefanov said.

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Moscow_Wolf
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Postby Moscow_Wolf » Mon Oct 19, 2009 8:42 pm

The last time I paid tax, it was to Dick Turpin. He's still about you know. :lol:

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Postby Seedy » Mon Oct 19, 2009 8:56 pm

:twisted: I'd think that a combination of "I live frugally" and "I found a bag of money in a field as I came home one night" might be worth a punt.....I don't think that the principle of "stealing by finding" is recognised in the BG legal system :lol:

Failing that, what's the Bulgarian for "genie in a bottle" and "three wishes"? :wink:

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Postby stevek » Mon Oct 19, 2009 8:58 pm

I suppose no-one likes paying taxes but of course the reality is that its the taxes that pay for the Hospitals, schools and all the rest of the infrastucure, and with a country so poor as Bulgaria I for one am glad to see the authorities firming up their revenue collection, I have no doubt that caught in the net will be many "small fry" but in the long term and for the good of the ordinary Bulgarian people Im sure its the right way to go.
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Postby Moscow_Wolf » Mon Oct 19, 2009 9:18 pm

stevek wrote:I suppose no-one likes paying taxes but of course the reality is that its the taxes that pay for the Hospitals, schools and all the rest of the infrastucure, and with a country so poor as Bulgaria I for one am glad to see the authorities firming up their revenue collection, I have no doubt that caught in the net will be many "small fry" but in the long term and for the good of the ordinary Bulgarian people Im sure its the right way to go.
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Small Fry being the operative word. They have a saying in Russia, 'A Fish begins to smell at the head', basically translates to: 'if the barstewards at the top can steal then, why can't we'.

There is NO real freedom of the press here or in some other countries, because journalists can simply disappear. The only 'bigwigs' that get investigated are usually Political opponents (I send you in the direction of Khordievsky, the Mega Billionaire still sitting in a Russian jail because he made Political suggestions and moves to go against Putin.

In all my time in Russia, I can only recall one French journalist that made a claim that Chernomodin was one of the richest men in the world, but the Russian Politician claimed he was only living on his official government salary of $400 per month. 8O

Unless the really big guys are out for you, it is usual to bribe the tax authorities. Official 'white' and unofficial 'black' salary mixes still go on here so as to lower the social tax payments of employers. Even when these social taxes are lowered so as to be more reasonable, employers will most probably continue with this practise as it becomes a kind of a sport.

I live in the 'unreal world' where I would happily pay taxes to where I am most likely to get some benefit, e.g. I drink and smoke so I should pay more to the NHS. I don't have kids so why should I pay for schools (my Parents paid for my education). Government pension, yes I'll have some of that, I'll pay my stamp only for the government to do me out of an extra year! Now that is really fair is it not because we don't have enough money to pay all the living longer old timers. Hey, but I drink and smoke don't forget, I might not even reach retirement age so who gets that - oh sorry, I forgot all the refugees and asylum seekers and all the wars we shouldn't be in for American oil................. (are we in Soap Box).

Probably not, but you get my gist. I accept and understand that it can and never will be like I would like it to be, but just my take on taxes and their misuse.

Ps. I recently discovered that although I spent 14 years in the Army, have paid up my full stamp, I am not entitled to UK NHS (free treatment anymore, cos I don't live there.) Marvellous innit.

As with charities, you pick and choose where you wish to donate or, you don't.

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Postby Hippyboy » Tue Oct 20, 2009 1:52 am

I think evading taxes is a national sport in most countries around the world ; they really ought to have it in the olympics !!

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Postby mememe » Tue Oct 20, 2009 4:58 am

Hi Moscow_Wolf,

Yes - I discovered the lack of provision of NHS services a few years ago - You aren't even entitled to visit an NHS doctor for a free consultation...(even if you are still paying some taxes there)

Should you ever need any NHS medical service when you are in the UK, then the best thing to do, obviously, is to make a mental note not to mention that you live abroad at all to the doctor. You can supply your home address if you still own property - or the address of a friend if you don't.

But I have to confess, mentioning that I live abroad isn't usually the first thing that springs to mind when I'm in a doctor's surgery anyway..... :)

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Postby gimlet » Tue Oct 20, 2009 5:31 am

A lot of Bulgarian occupations are taxed on the "patent" system, ie on a notional salary. You pay the same tax whether you earn less or more. No deductions I imagine. The closest thing I can remember in UK is when you were taxed on your house - a notional annual rental income.

There is no evasion with the patent system unless you can evade any signs that you are carrying on the trade.

Anybody think this is a worthwhile idea?

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Postby theweeton » Tue Oct 20, 2009 9:38 am

Yes tax evasion a national sport and it is part of the culture.
For a long time Bulgarians have never reaped the full benefits of tax.
First the Turks in the form of the otterman empire raped the country
then the russians did the same before what most bulgarians believe the maffia took over.
The patent system works well in cash rich industries I became aware of it while doing research for taxis in bulgaria but much the same happens unoffically in england for example in Blackpool the tax office let it be known how much income they think a room should generate in one of the towns b and bs and as long as you are around that figure no questions are asked.
Tax evasion is illegal tax avoidance is ok thats why we have accountants.

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Postby Moscow_Wolf » Tue Oct 20, 2009 2:33 pm

theweeton wrote:Yes tax evasion a national sport and it is part of the culture.
For a long time Bulgarians have never reaped the full benefits of tax.
First the Turks in the form of the otterman empire raped the country
then the russians did the same before what most bulgarians believe the maffia took over.
The patent system works well in cash rich industries I became aware of it while doing research for taxis in bulgaria but much the same happens unoffically in england for example in Blackpool the tax office let it be known how much income they think a room should generate in one of the towns b and bs and as long as you are around that figure no questions are asked.
Tax evasion is illegal tax avoidance is ok thats why we have accountants.


I know this is a 'tongue in cheek' type thread, but I am not aware of any raping of Bulgaria by the Russians or Soviets for that matter. I mean, whatever did the Russians ever do for us - Stan? :roll:

Plus, when you say Mafia, do you mean the official legal Mafia more commonly known as the government or the bull neck ones?

I do not know too much about Bulgaria's methods of tax collection, but in Russia we used to have the Tax Police which were a kind of paramilitary force that wore blue camouflage and raided their clients premises with kalashnikovs. :(


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