On September 26, 2024, the President of the Supreme Administrative Court (SAC) initiated interpretative case No. 2/2024, which aims to address the inconsistencies in the practices of the Administrative Courts and the SAC itself. The core issue revolves around the interpretation of the Internal Revenue Code concerning the authority of directors within the National Revenue Agency (NRA) to conduct tax audits.
The case will specifically examine the legal boundaries of item 1 of the Internal Revenue Code as it relates to the authority of a director from a different tax administration unit (TA) within the NRA. The critical question at hand is determining which authority is competent over a taxpayer under Article 8 of the Tax Procedure Code—particularly in cases where a taxpayer registered in one tax office, such as the NRA – Sofia, undergoes an audit by a different tax office, like the NRA – Dobrich or NRA – Varna.
While modern electronic transmission and document signing may ease procedural hurdles, the requirement outlined in Article 115 of the Tax Code mandates that audits must occur at the location where the taxpayer’s documents are maintained. This raises essential questions about the validity of audit processes conducted by authorities outside the registered taxpayer’s jurisdiction.
The forthcoming decision from the SAC is expected to clarify these critical issues, potentially leading to an avalanche of invalid acts of revision and reshaping the audit landscape for many taxpayers. Stakeholders are closely monitoring this interpretative case, as its implications will significantly impact clients within the taxation system.
As the case progresses, updates will be provided, given its importance to taxpayers and legal practitioners alike.
