Tax attorney for cross-border operations in Silistra

Tax attorney for cross-border operations in Silistra

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You’ve started doing business in Romania while running a logistics company headquartered in Silistra. You’re hiring staff across the Danube, issuing invoices between entities, and receiving VAT refunds in both Bulgaria and Romania. But now you’ve been notified of a joint tax audit—by the Bulgarian National Revenue Agency (NRA) and Romanian tax inspectors. You need legal support urgently. Where do you start?

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Many of our clients in Silistra, Tutrakan, and across the region come to us with similar concerns. Some are Bulgarian businesses expanding into neighboring markets. Others are individuals with property, income, or family ties abroad. A common question is: how do I stay tax compliant across borders—and what happens if I’m audited? Others need help with appealing tax assessments, legal advice on undeclared income, or penalty appeals following cross-border audits.

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Navigating international taxation is complex, especially for those operating in smaller towns where specialist help is hard to find. At BSLC, we offer dedicated legal guidance for cross-border operations, including representation in tax audits and investigations, corporate tax compliance in Bulgaria, and VAT disputes. Our tax lawyers work throughout Silistra, Tutrakan, Dulovo, Alfatar, and Glavinitsa and represent both individuals and companies in cross-border tax matters.

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Do I have to pay taxes in both Bulgaria and the other country I operate in?

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This is one of the first questions clients ask. Whether you’re running a dual-registered company, investing abroad, or receiving income from foreign clients, the risk of double taxation is real.

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Under Bulgarian tax law, residents are taxed on their worldwide income. According to Article 6 of the Bulgarian Corporate Income Tax Act:

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“Resident legal entities shall be subject to corporate income tax on the profit derived from all sources, including sources outside the territory of the Republic of Bulgaria.”

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In practice, if your company in Silistra is earning income from operations in Romania, both countries may try to tax part of that profit. To solve this, Bulgaria has Double Taxation Treaties (DTTs)—including one with Romania—allowing mutual relief.

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At BSLC, we help clients:

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• Determine tax residency and reporting obligations
• Apply DTT provisions to reduce or eliminate double taxation
• Properly allocate income between jurisdictions to avoid non-compliance
• Defend against allegations of base erosion or artificial arrangements

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We’ve recently advised a client in Dulovo with a cross-border transport business. By applying the Bulgaria–Romania DTT, we successfully reduced their foreign tax liability and avoided networked penalties.

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What if I’m audited for cross-border transactions?

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Joint audits are becoming more common along the Danube border, especially in Silistra and Tutrakan, where businesses often operate binationally. Tax authorities are sensitive to VAT fraud, undeclared income, and cross-invoicing designed to shift profit or inflate expenses.

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According to Article 114, Paragraph 1 of the Bulgarian Tax and Social-Insurance Procedure Code:

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“The tax authorities may perform a tax audit to verify the correctness of declared data, the obligations declared and those not declared, the existing obligations and the recovery of tax credit.”

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In a cross-border context, this may include:

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• Review of intercompany loans and payments
• Inspection of foreign bank accounts
• Requests for accounting documentation translated into Bulgarian
• Freezing of VAT refunds during the audit period

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Our role is to ensure that your rights are protected. We provide full representation before the tax authorities, manage communications with foreign tax offices, and prepare defensive arguments to justify your business model.

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In a recent case in Alfatar, we defended a construction company wrongly accused of tax evasion due to unsubstantiated intra-EU payments. After organizing evidence and following the administrative appeals route, the final audit report acknowledged our client’s compliance.

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What if the authorities assume I failed to declare foreign income?

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Receiving income abroad—be it rental payments, dividends, or freelance revenue—can easily lead to legal issues if not properly declared in Bulgaria. Many individual clients from Glavinitsa or Dulovo come to us after receiving notices from the NRA about undeclared income identified through EU exchange-of-information protocols.

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Article 122 of the Tax and Social-Insurance Procedure Code allows presumptive taxation if the NRA suspects hidden income:

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“The revenue authority may determine the amount of taxable income when established data and circumstances give grounds to assume that the taxable person has received undeclared income.”

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In practice, this could lead to the imposition of:

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• Additional tax liabilities
• Accrued late-payment interest and sanctions
• Allegations of tax fraud, even criminally in some extreme cases

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We assist clients with legal help with undeclared income, prepare documentation to prove the lawful origin and tax treatment of the funds, and, where appropriate, negotiate settlements or file tax penalty appeals in Silistra.

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Should I register for VAT if I export or import services?

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Many businesses in the Silistra region—particularly those involved in IT, transport, or consulting—are unsure when VAT registration is required for cross-border services. Unlike domestic trade, intra-EU transactions trigger a specific set of obligations.

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According to Article 96 of the Bulgarian Value Added Tax Act:

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“Taxable persons with a taxable turnover of BGN 100,000 or more during a period not exceeding the preceding 12 months shall be obligated to register under this Act.”

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Even below this threshold, you may be obligated to register for VAT if you supply services to companies established in other EU Member States.

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BSLC assists with all aspects of VAT registration and disputes, including cases where clients have failed to register on time and are now facing late-registration penalties. We’ve helped a recent client from Tutrakan—an architect billing clients in Austria—regularize their status, reclaim VAT costs, and avoid potential backdated liabilities.

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How do you help with cross-border tax planning?

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Sound tax planning is the best defense against future complications—but it must be legally robust. Our team works closely with corporate clients expanding into Romania, Greece, or further afield from regional hubs like Silistra and Tutrakan. We also assist private clients restructuring overseas assets or planning succession.

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Our support includes:

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• Designing lawful corporate and holding structures
• Advising on transfer pricing and permanent establishment issues
• Coordinating with foreign tax advisors
• Managing risk of double taxation and audit exposure

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We often start with a tax lawyer consultation in Silistra, where we review your situation and develop a strategy tailored to both Bulgarian and international law.

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Conclusion

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If you’re involved in cross-border business or income streams and are unsure about your legal obligations in Bulgaria, don’t wait for an audit notice to take action. Our team at BSLC combines legal expertise with hands-on experience in tax audits, VAT disputes, cross-border tax planning, and representation before the Bulgarian tax authorities. Whether you’re in Silistra, Dulovo, Tutrakan, Alfatar, or Glavinitsa, we’re here to help you navigate your tax obligations with confidence and clarity.

What happens if I don't declare cryptocurrency earnings to the Bulgarian tax authorities?

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A freelance software developer from Dulovo had been receiving payments in cryptocurrency for services provided to UK and Irish clients. Although the income was steady and substantial over a two-year period, he never declared these transactions in his Bulgarian annual income tax return. He assumed that since the funds were “virtual” and held on foreign platforms, there was no obligation to report them locally.

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This approach creates significant legal risk. Under Bulgarian law, income received by tax residents—from any source, including digital currencies—is subject to taxation. The National Revenue Agency (NRA) applies the general rules of income taxation to gains from the disposal or conversion of cryptocurrencies. Failure to report may result in assessments for undeclared income, late-payment interest, administrative penalties, and even fiscal criminal investigations in cases of substantial sums.

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We advise clients across Silistra Province, particularly younger professionals and digital nomads, on cryptocurrency tax compliance and tax obligations for freelancers. Under the Bulgarian Personal Income Tax Act, cryptocurrency gains must be declared in the annual tax return, with taxes calculated at a fixed rate of 10%. We assist with preparing retrospective declarations, negotiating with tax authorities where needed, and ensuring proper documentation for future transactions. Our support mitigates exposure to both financial penalties and reputational harm.

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Can I offset foreign taxes paid against my Bulgarian tax bill?

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A company based in Alfatar operates an online distribution platform, with revenue streams from Germany, France, and Greece. The local management received notices of withholding tax deductions in several jurisdictions, particularly on royalties and software licensing revenue. These taxes were paid abroad, but no consideration was made during Bulgarian corporate income tax filing.

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Without invoking the correct provisions of relevant Double Taxation Agreements, foreign tax paid may not reduce a Bulgarian tax bill. This could result in the company being taxed twice on the same income—once abroad and again in Bulgaria. The Bulgarian Corporate Income Tax Act provides mechanisms to claim relief, but only if supported by valid proof, submitted within established deadlines. Failing to act promptly could make relief claims inadmissible.

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We support foreign-active businesses in managing withholding tax issues and applying the provisions of Bulgaria’s extensive DTT network. In this Alfatar case, we coordinated with foreign tax advisors to obtain certified tax payment documents, then filed the necessary declarations with the Bulgarian National Revenue Agency. We demonstrated that the foreign tax could be credited against the local liability under Article 48 of the Corporate Income Tax Act. As a result, the company obtained full relief and improved its internal protocols for future compliance.

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What are my obligations if I split my time between Bulgaria and another country?

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A dual-national client with family interests in Tutrakan resides part-time in Austria and part-time in Bulgaria. He receives pension income, rental revenue from apartments in Linz, and manages consultancy work via a Bulgarian sole trader registration. Confusion arose regarding where he owed taxes and whether his Bulgarian income was being correctly reported for Austrian tax purposes.

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In such situations, tax residency determination becomes critical. Under Bulgarian law, a person is considered a tax resident if their permanent address is in Bulgaria, or if they reside more than 183 days within any 12-month period. However, this can conflict with foreign laws and lead to disputes over tax residency. It may also trigger double taxation where both Bulgaria and another country claim taxing rights over the same individual.

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We regularly assist clients with international tax advice in Silistra and surrounding towns in cross-border residency cases. We apply Article 4 of the OECD Model Tax Convention—as used in most of Bulgaria’s tax treaties—to determine actual residency based on centre of vital interests. We then prepare the paperwork for income tax returns and filing in Bulgaria, and advise on lawful methods to avoid dual reporting, including use of tax residency certificates, treaty tie-breaker rules, and properly structured invoicing. This helps clients avoid audit risk while maintaining tax efficiency across jurisdictions.

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How can BSLC support me with tax law issues in Silistra, Tutrakan, Dulovo, Alfatar, and Glavinitsa?

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Whether your concern is audit exposure, crypto taxation, or the structuring of international income, navigating Bulgarian tax law requires proactive legal support. Our clients across the region face increasingly complex questions—from freelancers in Glavinitsa to companies restructuring operations in Dulovo. The tax obligations are real, and penalties for non-compliance can be severe.

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At BSLC, we focus on helping both individuals and businesses find clear, compliant solutions under Bulgarian tax law. Our support covers the full scope of representation, documentation, and dispute resolution.

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Our tax law services include:

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• Legal assistance with income tax returns and filing in Bulgaria, including late or amended filings  

• Advisory on cryptocurrency tax compliance for individuals or corporate entities  

• Representation in real estate tax disputes in Silistra and surrounding municipalities  

• Structuring and compliance advice relating to tax planning for digital nomads and freelancers operating across borders  

• Preparation and defence in tax audits, including appeals under the Tax and Social-Insurance Procedure Code  

• Support with legal support for corporate restructuring to ensure fiscal efficiency and compliance

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Our goal is to ensure full legal clarity and reduce tax exposure for those active in Silistra, Tutrakan, Dulovo, Alfatar, and Glavinitsa. Let us assist you in structuring your tax affairs soundly and lawfully.