New restrictions on cash payments

From January 1, 2019, any payment worth more than BGN 1,000 will have to be made by bank transfer – by transfer or payment on a payment account. These are the provisions of the amendments to the Limitation of Cash Payments Act submitted to the National Assembly for consideration by the Transitional and Final Provisions of the Act to Amend and Supplement the Tax Insurance Procedure Code.

Reducing the statutory thresholds for the restrictions of cash payments will be phased in and will be performed as follows:

BGN 5000 – from August 1, 2017 to December 31, 2017 ;

BGN 3000 BGN – from January 1, 2018.

BGN 1000 BGN – from January 1, 2019 .

The restrictions will apply to both payment transactions that are equal to or higher than the amounts listed above, and when the payment itself is below the designated threshold but constitutes a part of a contract monetary consideration equal to or greater than the specified amount. The provisions of the law also apply in case of payments in foreign currency where the BGN equivalency is equal to or exceeds the respective maximum limits.

The draft bill specifies that the proposed change aims at limiting the gray economy and is in line with the established practice in other EU Member – States. The measure is expected to limit the possibility that cash flows relating to income from sales of production, goods and services is not reflected in the company’s accounts and, on the other hand, by the payment of remuneration for which taxes and compulsory social security contributions have not been charged, deducted and paid.


author: Vesela Velinova, attorney-at-law

Member of “Velinov and partners” Consulting House

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