On 26 June 2025, the Supreme Administrative Court (SAC) of the Republic of Bulgaria, sitting in a General Assembly of its First and Second Divisions, issued a landmark interpretative Decision (the “Decision”) concerning a long-disputed and controversial issue: Is a Tax Inspection Certificate null and void if it is issued following a tax inspection assigned by a revenue official – an employee of a Territorial Directorate of the National Revenue Agency (NRA), in respect of a person for whom, pursuant to Article 8 of the Tax-Insurance Procedure Code (TIPC), the authorities of another Territorial Directorate are competent?
This question concerns cases where, for example, a person who is registered for tax purposes in the territory of the TD of NRA in Sofia is audited by the revenue authorities from Varna Territorial Directorate and whether the Tax Inspection Certificate issued as a result of such an audit is null and void or not.
- Legal Positions of Case Law Prior to the Decision:
Prior to the Decision, SAC`s case law on this issue was controversial. Some of the judges considered that the Tax Inspection Certificate was null and void when the audit was assigned by an authority from another Territorial Directorate of the NRA without an explicit legal possibility to do so.
The opposing judges defended the validity of such Certificates when specific administrative procedures were followed, and the relevant statutory provisions were properly applied.
- The Interpretative Decision and the Final Position of the SAC:
The Supreme Administrative Court had to analyse both positions and issue a ruling that would resolve the dispute.
The SAC ruled that a Tax Inspection Certificate, when issued as a result of an audit initiated by a revenue authority – an employee of a Territorial Directorate of the NRA, other than the relevant competent territorial directorate – in not null and void, provided that: this employee has been duly appointed by order issued by the director of the territorially competent directorate, in accordance with Article 112(2)(1) of the TIPC, and is covered by orders pursuant to Article 10(9) of the NRA Act and Article 12(6) of the TIPC (which generally authorize officials from a Territorial Directorate of the NRA to carry out audits of persons for whom the authorities of another Territorial Directorate are competent.
- Among the grounds given by the Supreme Administrative Court in its Interpretative Decision:
In its Decision, the Supreme Administrative Court expressly stated that the orders cited are internal official acts, for which there is no legal requirement to justify (and therefore prove) the necessity of their issuance, and therefore they are not subject to judicial control. Therefore, according to the court, these acts cannot be grounds for invalidating the Tax Inspection Certificates.
- What are the Consequences of the Interpretative Decision?
A number of proceedings for the appointment of an inspection were suspended pending a ruling by the Supreme Administrative Court on the disputed issue. The ruling provided definitive clarity on this contentious issue, and all courts are now required to comply with the final conclusions of the Supreme Administrative Court.
As a result, the vast number of suspended audit proceedings will be resumed, which will lead to an avalanche of tax inspection certificates, for which citizens must be prepared.
You can read the whole Decision here.
The news above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
