When the sole owner of the capital/partner, shareholder is a natural person who also has the status of a sole trader (ET), the question may arise whether the company’s receivables from the sole trader, which arise from commercial transactions (sale of goods and services, etc.) should be declared?
In order to be answered this question, the status of the sole trader in Bulgaria should be considered. Any able-bodied natural person residing in the country can be registered as a sole trader. The registration of the person as a sole trader does not form a separate independent legal personality between him and the natural person who has registered him in the commercial register.
Given this, the company’s receivables from the sole owner of the capital/partner, shareholder – an individual, in his capacity as a sole trader, represent receivables (including from granted loans) from an owner – a natural person.
Therefore, the company’s receivables from an individual registered as a sole trader – owner, including the receivables from commercial transactions, are subject to declaration.
This rule is also applicable when the conditions under Art. 123, para. 10 of the Value Added Tax Act (VATA) are available. According to the said provision, when at the end of a calendar quarter the total amount of cash available in the cash registers, the amount of receivables (including from granted loans) from owners – individuals, workers, employees, persons employed under a management and control contract, and accountable persons exceeds BGN 50 000, the registered persons under the VAT Act, which are enterprises under the Accountancy Act, declare separately for the relevant calendar quarter with the declaration under Art. 55, para. 1 of the Personal Income Tax Act and Art. 201, para. 1 of the Corporate Income Tax Act, by the end of the month following the quarter, data from their current accounting regarding:
– the amount of cash available in cash registers;
– the amount of receivables (including from granted loans) from owners – natural persons;
– the amount of receivables (including from granted loans) from workers, employees, persons employed under a management and control contract, and accountable persons.
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