36. Q:What is consortium and are there any specifics about it in an accounting point of view?
A: In compliance with Art. 275 from the Commercial Act a consortium is a contractual grouping of merchants for carrying out specified activities.The respective rules either for partnerships under civil law or for the company in the form of which a consortium has been organized shall apply to consortia. Despite of the fact that the consortium is not a legal entity but union of 2 or more legal entities for mutual business, for tax purposes the tax legislation accepts the consortium as a separate taxable entity with its own accountancy and reporting. Therefore the consortium shall take a tax number and to act as independent merchant for tax purposes. Upon request from visitors we are ready to draw up a case study as the topic is not very popular and there are specifics in the accounting reporting.
37. Q: Which bank do you propose to open my business bank account? Can it be done remotely and how long does it take?
A: The banking system in Bulgaria can be categorised as a stable and modern one. Most of the banks in Bulgaria offer very competitive conditions for business clients and have very convenient and user-friendly online banking solutions. Sb Accounting & Consulting is successfully working with many Bulgarian banks, so that whichever bank the client chooses we can handle the job. The opening of the bank accounts can be done remotely by us. The procedure usually takes around a week.
38. Q: Why there are two copies in Bulgaria of invoices – original and a copy of the original and should I retain the copy?
A: In Bulgaria, every invoice that is being issued is issued in two copies – one original and one copy of the original. Both the original and the copy are with absolutely identical content, the only difference is in the ORIGINAL or COPY signature on the invoice. The original invoice has to be given to your client, and the copy of the original needs to be retained for the accountant. Therefore when you issue invoices – save the “copies” and pass them to your accountant.
39. Q: We have received a bank transfer in our Bulgarian corporate bank account. What is strange is that the Bulgarian bank takes commission on this transfer. Isn’t it true that a European transfer within the EU must be free of charge?
A: The free of charge EUR transfers are within the Eurozone. Since Bulgaria is still not a member of the Eurozone, the Bulgarian banks are allowed to charge for EUR transfers. Despite of that, there is a new regulation (EC) No 924/2009 on cross-border payments in the Community which states that an IBAN/BIC transfer within SEPA must not cost more than a national transfer, no matter which currency is used. However, the deadline for accepting this new rule could be suspended by the Member States which are still not members of the Eurozone, until 1st of November 2012.
40. Q: What are the differences between trade representation office and a branch of foreign entity in Bulgaria?
A: 1.Trade representation office – Foreign legal persons, who has the right to carry on commercial business under their national legislation, may establish trade representation offices in Bulgaria, which must be registered at the Bulgarian Chamber of Commerce and Industry (BCCI). Such representation offices are not legal entities, can not issue invoices to clients and may not carry out economic activity. The non-resident person may conclude transactions with resident persons solely for the needs of a representation office registered by the non-resident, and the provisions of Bulgarian law apply to any such transactions. The trade representation offices of non-resident persons are mandatory entered in the BCCI Trade Register in pursuance of Article 6 (1) of the Encouragement of Investment Act. In this sense, the BCCI decision on registration of a trade representation office has a constitutive effect.2. Branch of Foreign Entity – The wholly owned subsidiary /Branch of Foreign entity/ is a legal entity and is subject to registration in the Commercial Register. Despite of the fact that it could issue invoices to clients, it does not have a legal personality separate from its parent company. The wholly owned subsidiary /Branch of Foreign entity/ is part of that company but has a different registered office. Nevertheless, the wholly owned subsidiary keeps business books as a stand-alone merchant, and subsidiaries wholly owned by non-resident persons must also prepare a balance sheet at the end of the year.