Problems related to the imposition of preliminary security measures in the assessment proceedings
The initiation and conduct of assessment proceedings is a procedure that a significant part of the operating companies face on the territory of the country. In practice, it often turns out that, regardless of the size and the subject of the activity carried out by a company, it is possible against the latter to be carry out assessment proceedings, which in many cases is accompanied by the imposition of preliminary security measures.
The possibility of imposing such measures is provided in the provision of Art. 121 of the Tax and Social Insurance Procedure Code (TSIPC), according to which “In the course of the assessment proceeding or upon the issuance of the assessment act, the revenue authority may request from the public enforcement agent the imposition of preliminary security measures in order to prevent transactions and actions with the legal entity‘s assets, which result in the collection of tax and statutory social security contributions will be impossible or significantly hindered.”
Types of preliminary security measures
According to the Bulgarian legislation such measures are the imposition of a foreclosure on immovable property, the seizure of movables and debtor’s claims, seizure of the debtor’s accounts, seizure of goods in the debtor’s turnover.
The practice shows that the most preferred of the main public enforcements agents of the NRA is the seizure of the accounts of the debtor. It is undisputed that the latter creates a number of inconveniences for each operating company.
In view of the foregoing – does the actions of the revenue authorities contradict the principle stipulated in Article 121, para. 3 of the TSIPC, according to which, the preliminary measures shall be imposed on assets whose securing does not lead to serious impediment to the activity of the entity?
The question remains open, and the existing case law is not uniform.
Problems related to the preliminary security measures cover the whole process of imposing them – from the issuing of anordinance by the revenue authority to its final entry into force. We mainly pay attention to the significant number of non-motivated ordinances, which in most cases do not give proof of the need to impose the appropriate measures and do not examine the assets of the debtor and the subsequent possibilities for satisfaction from available assets.
Another major problem is the legally shortened two-instance appeal against the acts requiring preliminary security measures. In practice, the latter may be classified as a single instance, as the highest revenue authority in each case confirms the ordinance issued by its subordinate officials and therefore as revising authority can be considered only theadministrative court.