VAT ACCOUNT - MUCH ADO ABOUT NOTHING
Those who were waiting with optimism for the opening of the VAT accounts on August 1 will most probably be disappointed. It turns out that the instrument that was meant to ensure the use of tax credits is not at all popular. Since small dealers do not form a sufficiently representative extract, let's take a look at what big enterprises offering public services do. However, even they will refuse to tell you the number of the account which you should use to pay your value added tax.In fact, this is a normal reaction. First, nobody would block part of his revenues in a special account for at least one month. Second, these companies do not need to pay for the reprocessing of their software and to train their personnel in using the new financial miracle. Moreover, VAT accounts will rather benefit the clients of these companies. Clients in turn are not able to oblige the supplier to tell them his VAT account number, except if they threaten him they would not make the deal. In effect, this is the main idea - this kind of account is used voluntarily, which means that if one side (the supplier) does not like these payments, they will not be made. That's why, when the Chief Tax Administration summarizes the information about the transactions made on these accounts in August, it will probably turn out that the whole story has been forgotten.In the meantime, the tax services realized very soon that the innovation could bring extra money to the budget, at least in the form of fines. They hardly waited for August 14 to come and put some warning signs that sanctions would be imposed on anyone who fails to declare his new bank account within the set 14-day term. Many accountants failed to do so. A VAT account is to be opened by law and with a permission from the tax administration (one should first get a number from the bank, then go to the tax service and ask for a permission to open an account, and finally finish the procedure at the bank). It means that the tax service has been informed in advance about the opening and then it is not necessary to send it a declaration within 14 days. But according to article 33 of the Code of Tax Procedures, a new or a closed account should be declared and obviously many people have failed to think about this complication.Of course, it could have been written that in this specific case the tax services are considered informed by service about the opening of the new account. Also, the inspectors could have been ordered to warn the companies that they are obliged to send their declarations. But considering how soon fines were imposed, it seems that this negligence has not been accidental. Eventually, everything seems quite stupid, because the VAT account cannot be used as a guarantee. To put it short, tax services do not need this information at all. And because it is unable to distrain these accounts, the National Insurance Institute (NII) issued some special instructions which free the companies from the obligation to keep any useless papers (letter No91 01 188/July 22, 2002).There is at least one calming fact - most tax services are imposing the lowest possible fines - BGN20. However, there are some good examples in the past of how taxpayers are treated by the tax services.