20 years together

Tax Law

Overview
Advising businesses always requires good knowledge of the tax legal framework for the necessity of a complex approach in the elaboration of appropriate legal schemes. One of the key features of Dimitrov, Petrov & Co.’s tax practice is the comprehensive scope of the offered tax-related legal services. The law firm provides tax advising and consulting for a wide range of business matters in a variety of tax services, such as: 
 
  • consultations on tax strategies and optimisation of taxation;
  • tax planning for establishment of companies;
  • tax planning related to execution of EU funded projects;
  • tax advice relating to corporate transactions (reorganisations, mergers, demergers, sales and acquisitions of firms, etc.), privatisation, IPO's, etc.;
  • tax implications of commercial restructurings and transactions;
  • assistance with domestic and foreign investment;
  • tax planning regarding property acquisition;
  • avoidance of double taxation and implementation of treaties thereof;
  • registration for tax purposes and representation before the tax authorities;
  • application of transfer pricing regulations;
  • corporate tax assistance and consultancy;
  • advising on appropriate VAT and excise duties regime;
  • consultations on personal income tax;
  • application of EU tax legislation in Bulgaria;
  • tax due diligence;
  • assistance with tax audits;
  • handling disputes with the tax authorities;
  • providing defence in tax litigation;
  • representation and litigations before European Court of Human Rights;
  • preliminary inquiries to the Court of Justice in Luxembourg.
 
The law firm is distinguished for its strong specialisation in M&A, restructuring and tax optimisation, its advisory on tax proceedings and assistance with tax inspections. A particular niche expertise within tax law, which characterises the successful tax practice, is tax litigation, which over the years has led to the establishment of an impressively successful track record (over 80% success rate by the appeal of tax revision acts). The team of Dimitrov, Petrov & Co. recorded breaking success in a series of appeals of tax revision acts, affirming its expertise in the area of tax law and tax litigation. When involvement of auditing or accounting counsel is needed, the law firm’s lawyers advise on the choice of an auditing firm among the reputable ones which  Dimitrov, Petrov & Co. keeps partner relations with.
 
Dimitrov, Petrov & Co.’s clients are both Bulgarian and foreign companies and private equity funds. The law firm’s lawyers have continuous expertise in advising companies in the IT, pharmaceutical, telecommunications, real estate, construction, transportation and manufacturing sectors.
 

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Representative Experience
Dimitrov, Petrov & Co. provides legal assistance to a major Bulgarian economic player with regard to VAT and corporate taxation, as well as advice on its tax planning approaches. Recently Dimitrov, Petrov & Co. consulted the tax aspects of the restructuring of the client involving over 80 legal entities.  
 
Dimitrov, Petrov & Co. provided comprehensive legal advice to the fourth biggest Bulgarian bank regarding tax withholding during its supervision period. The tax team counselled the bank’s conservators on complex tax issues in this unprecedented case of a financial institution in a conservation position in Bulgarian taxation law.  
 
The law firm’s team advises a leading Bulgarian enterprise on the potential regulatory and tax effects that might arise from the introduction of a loyalty customer programme within one economic group.  
 
The team of Dimitrov, Petrov & Co. represents a non-governmental organisation, an EU programmes beneficiary, in a lawsuit related to a refusal of tax deduction under the Value Added Tax Act by the National Revenue Agency. The tax revision act, amounting to tens of thousands of euro, was successfully appealed before the first-instance court, and the case is still pending at the cassation instance. The court practice on the specific matter in dispute is still limited. If the first-instance decision is upheld by the Supreme Administrative Court, this case will introduce a new court practice of importance for the business and especially for NGOs, EU Programmes beneficiaries.
 
With regard to simultaneous capital increase and decrease and distribution of profit, Dimitrov, Petrov & Co.’s tax lawyers analyse and provide assistance to the local branch of an Austrian concern regarding the relevant taxation issues. Professional advice has been presented in terms of decapitalisation, withholding tax over dividends, as well as the applicable rules regarding concealed distribution of profit. 
 
Dimitrov, Petrov & Co.’s tax lawyers are representing a PR company before the Sofia City Administrative Court in a procedure against the National Revenue Agency regarding a refusal of tax deduction under the Value Added Tax Act. The tax litigation team is challenging a tax revision act for the amount of EUR 50,000. The case is still pending. If the tax revision act is repealed by the Sofia City Administrative Court, this shall create а significant court practice regarding the VAT deduction to be used by service providers and the obligations of the tax authorities for proving the non-entitlement of a tax liable person to tax deductions.
 
A team of Dimitrov, Petrov & Co. assists a Bulgarian manufacturing company in an ongoing tax-inspection procedure focused on the correct accrual of VAT and corporate tax since the establishment of the company, as well as the tax effects of the funds used for financing the company by the owners.  
 
Since 2013 the tax lawyers of Dimitrov, Petrov & Co. have been representing a company specialising in metal casting before the Sofia City Administrative Court in a procedure against the National Revenue Agency regarding a refusal of tax deduction under the Value Added Tax Act.  A tax revision act for the amount of EUR 100,000 was repealed by the first-instance court. The case is still pending before the Supreme Administration Court.
 
Dimitrov, Petrov & Co. successfully represented a leading Georgian Internet service provider in an appeal of a tax revision act for the amount of EUR 250,000 related to applying a double taxation avoidance treaty. The revision act was unambiguously repealed by a final decision of the Supreme Administrative Court.
 
In 2014 the tax lawyers of Dimitrov, Petrov & Co. successfully conducted a special procedure under the Value Added Tax Act for obtaining of a permit for applying of 0% VAT rate. The case concerned chargeable supplies for which a 0% VAT rate is provided under an International Treaty. The team successfully substantiated the thesis that this regime is applicable in respect to the Cross-border Programmes financed by the EU Cohesion Fund. The permission issued by the tax authorities for the activities of our client, an NGO active in EU funded projects, is the first of a kind regarding the Romania-Bulgaria Cross Border Cooperation Programme 2007-2013.
 
Dimitrov, Petrov & Co. successfully represented a Bulgarian Premier League professional football club in a cassation procedure before the Supreme Administrative Court. Our lawyers challenged a tax revision act for the amount of EUR 400,000. The latter, sustained by the first-instance court, was fully repealed as a result of the legal support provided by the team.
 
Dimitrov, Petrov & Co. provided legal assistance in the transformation of a commercial company into a joint-stock company and its further transformation into a public one. The process involved a number of tax consultations provided to the client.
 
In a high-stakes, EUR 8 million case concerning foreign investments in three Bulgarian residential complexes, Dimitrov, Petrov & Co. represented a major Swedish investor, which had been denied the opportunity to claim VAT refund from the state due to unfavourable contracts with Bulgarian developers and acting in bad faith on their part. After providing a detailed tax legal report, Dimitrov, Petrov & Co. led complex negotiations with the developers and managed to secure for the client an out-of-court settlement for one of the projects, which led to a considerable reduction of the price for the client and the successful transfer of the title.
 
In the end of 2012 the M&A and Tax teams of Dimitrov, Petrov & Co. advised the successful acquisition of commercial companies, as well as other corporate changes of our client – a Polish company. The lawyers also prepared a legal opinion on the regulations provided in the Bulgarian Commercial Act with respect to all types of merger procedures under the Bulgarian legislation and main tax aspects of the merger procedures with respect to the legal entities participating in the merger.
 

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Related News
04Jul

Dimitar Benev commented at Bloomberg TV the proposals for a fundamental change of the VAT system

Dimitar Benev, Associate at Dimitrov, Petrov & Co. Law Firm, commented at Bloomberg TV the proposals of the European Commission for a fundamental change of the VAT system operating on the territory of the Community. You can watch the whole interview here. view more

15Mar

Step ahead in adopting new transparency tax rules at EU level

The European Commission welcomes a political agreement of EU Member States on new transparency rules for tax intermediaries – accountants, lawyers, bank and consultants. Once in force, the new measures will oblige the tax intermediaries who provide their clients with cross border financial advices that could potentially facilitate tax avoidance, to report these structures to the local... view more

14Mar

European Commission sent a formal notice to Bulgaria to amend VAT rules

The European commission has triggered the first step of infringement procedure against Bulgaria by sending formal notice to the Bulgarian authorities regarding the VAT rules for companies trading in fuel and for non-business use of company’s assets. The Commission considers that national requirement for the small enterprises trading with fuel to provide significant amounts in cash, bank... view more

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Related Publications

Discussion: New Requirements of tax legislation for e-shops

Topic:Tax Law

Published at:TiTA

Edition:TiTA

* This publication is in Bulgarian.

The Tax Liability of Ex-Shareholders - a Legislative Failure

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Published at:www.mediapool.bg

Edition:Mediapool

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Doing Business in Europe

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Contact Person

Boyana Milcheva

Partner

Boyana Milcheva

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