01.08.2016

On the website of the Ministry of Finance one can find a Registration Information System of the officers authorised to exchange information between the budget spending units and the National Revenue Agency and Customs Agency authorities with regard to the implementation of Council of Ministers' Decision No 593/20.07.2016.

The Ministry of Finance has also released Instructions on the Application of Council of Ministers' Decision No 593 of 20 July 2016 with regard to the budget spending units' payments under contracts which explain the scope, the powers of the authorities, the implementation and the timing of Council of Ministers' Decision No 593, and also list the cases where exceptions are possible. These Instructions are released on the grounds of Article 101(1) of the Public Finance Law and are obligatory for the budget spending units, the National Revenue Agency and the Customs Agency.

Council of Ministers' Decision No 593 of 20 July 2016 makes amendments to the terms and procedure of budget spending units' payments under contracts that have been subject to regulation under the already appealed Council of Ministers' Decision No 788 of 28 November 2014. The purpose is to improve the collection of public receivables and to decrease the costs for their collection through an electronic exchange of information; to use effectively the existing information technologies and resources of the institutions; to ensure better accountability and transparency of public sector activities in line with the principles, standards and best practices of the EU; to limit corruption practices and to strengthen interinstitutional cooperation and coordination at national level in the process of budget revenue collection. The direct budget effect from the entry into force of Council of Ministers' Decision No 788 from end-November 2014 until 1 July 2016 amounts to almost BGN 276 million, with the direct effect from its implementation for the first half of 2016 only being BGN 70.6 million.

Council of Ministers' Decision No 593 governs the framework for effective fiscal stance protection and optimises the process of collection of budget revenues from customs duties, taxes, compulsory social security and health insurance contributions and other public receivables collected by the National Revenue Agency and by the Customs Agency. The Decision provides that before making contract payments of an amount equal to or exceeding BGN 30,000, all budget spending units (with the exception of the National Assembly and the judiciary) are obliged to notify both revenue agencies. Such notification shall also take place in the cases where the pending amount to be paid under a contract is below BGN 30,000 but not less than BGN 100, where it constitutes part of a contact consideration that is equal to or exceeding BGN 30,000.

The exchange of information between budget spending units and revenue administrations shall take place through an information system upon observing a specific order and deadlines. Budget spending units may effect contract payments only after a confirmation from the NRA and from the Customs Agency, when the person, which is a counterparty under the contract, does not have any late due taxes, compulsory social security and health insurance contributions and other public receivables at a total value exceeding BGN 100. In the cases where the persons have some liabilities, the revenue administrations send a confirmation within a seven-day period that the relevant public receivables are attached by a bank or by a budget spending unit (in the capacity of a third liable person) or that the same are secured by cash, by an irrevocable and unconditional bank guarantee or by seciritisation. When, in order to secure the late due public receivables, the NRA has attached the amount pending for payment, after the receipt of an execution order, the budget spending unit makes a payment to the revenue agency up to the amount specified in this order. The information system will require a confirmation from the relevant administration within another three days, if the budget spending unit has not received a confirmation from the NRA and/or from the Customs Agency with the 7-day period. It will make the payment in accordance with the instructions in the final confirmation sent automatically after the expiry of the overall 10-day period.