Prescription of Tax Debts in Bulgaria — When the NRA Loses the Right to Collect (2026)

Legal Framework — TIPC Art. 171–174

The prescription of public receivables is governed by Chapter Twenty-Five of the Tax and Insurance Procedure Code (TIPC / ДОПК), entitled “Extinction of Public Receivables by Prescription.” The four key provisions are:

• Art. 171 TIPC — establishes the two prescription periods: 5-year (general prescription) and 10-year (absolute prescription).
• Art. 172 TIPC — regulates the grounds for suspension and interruption of prescription.
• Art. 173 TIPC — sets out the procedure for writing off public receivables, including the ex officio write-off after the absolute prescription expires.
• Art. 174 TIPC — addresses the consequences of voluntary payment of a prescribed debt.

It is important to note that prescription under the TIPC applies only to public receivables — taxes, mandatory social security contributions, fines, interest thereon, etc. For private-law claims (e.g., debts to banks or counterparties), different rules under the Obligations and Contracts Act (OCA / ЗЗД) apply. Confusing the two regimes is one of the most common mistakes in practice.

5-Year General Prescription (Art. 171(1) TIPC)

The general prescription period for the extinction of public receivables is 5 years, running from 1 January of the year following the year in which the debt was due. This wording is crucial because the starting point is not the due date itself but always 1 January of the following year.

How Is It Calculated?

The calculation formula is straightforward but frequently misunderstood in practice:

1. Determine the year of the due date — the year in which the obligation was to be paid.
2. Prescription begins on 1 January of the following year.
3. Prescription expires after 5 full calendar years — on 31 December of the fifth year.

Example: Personal income tax for 2024 is due by 30.06.2025. Prescription begins on 01.01.2026 and expires on 31.12.2030 (if not interrupted or suspended).

The general prescription may be suspended and interrupted under certain circumstances (discussed below). Upon interruption, a new 5-year period begins, which can significantly extend the period during which the NRA has the right to enforce collection.

10-Year Absolute Prescription (Art. 171(2) TIPC)

The second prescription period is the 10-year absolute prescription. It runs from the same starting point as the general prescription — 1 January of the year following the year the debt was due. The key difference, however, is fundamental:

• The absolute prescription cannot be suspended.
• The absolute prescription cannot be interrupted.
• After 10 years — the public receivable is extinguished unconditionally, regardless of any actions taken by the NRA.

This means that even if the NRA repeatedly interrupts and suspends the 5-year prescription through audits, security measures, and enforcement actions, after 10 years from the starting point the debt is definitively extinguished.

Example: For the same obligation as above (tax for 2024, due by 30.06.2025), the absolute prescription runs from 01.01.2026 and expires on 31.12.2035 — regardless of any NRA actions.

The absolute prescription is a guarantee of legal certainty, protecting debtors from indefinite pursuit of old debts. It serves as a hard deadline after which the state definitively loses its right to enforce collection.

Suspension of Prescription (Art. 172(1) TIPC)

Suspension of prescription means the prescription period stops running for a certain period, then resumes from the point where it was paused. Importantly, suspension affects only the 5-year general prescription, not the 10-year absolute one.

Prescription is suspended in the following cases under Art. 172(1) TIPC:

In practice, virtually any active action by the NRA results in suspension of the general prescription. This is precisely why the absolute prescription is so important — it is the only one that cannot be circumvented.

Interruption of Prescription (Art. 172(2) TIPC)

Unlike suspension, interruption of prescription has a more radical consequence: upon interruption, a new 5-year prescription period begins from the moment of interruption. The time that had already elapsed is wiped out.

Prescription is interrupted in the following cases:

• Issuance of an act establishing the public receivable — for example, a tax assessment act (ревизионен акт), an act under Art. 106 or Art. 107 TIPC, or a penalty decree.
• Enforcement action by a public enforcement officer — imposition of attachment (запор), mortgage (възбрана), or execution against the debtor’s assets.

Example: An obligation with prescription starting 01.01.2021. Under normal circumstances, the 5-year prescription would expire on 31.12.2025. However, if on 15.03.2024 the NRA issues a tax assessment act, prescription is interrupted and a new 5-year period begins from that date — i.e., until 15.03.2029. Nevertheless, the absolute 10-year prescription continues running from 01.01.2021 and will expire on 31.12.2030, regardless of the interruption.

The combination of repeated interruptions and suspensions can significantly extend the effective term of the general prescription. But the absolute prescription sets a hard limit that cannot be overcome.

Write-Off of Debts (Art. 173 TIPC)

Art. 173 TIPC provides two regimes for writing off public receivables:

Write-Off Under Para. 1 — Special Cases

The NRA writes off public receivables when:

• The debtor — a natural person — has died without leaving an estate, or the heirs have renounced the inheritance.
• The debtor — a legal entity — has been struck off following completion of liquidation or insolvency proceedings with no unsatisfied claims remaining.
• Other cases provided by law.

Write-Off Under Para. 2 — Absolute Prescription (Ex Officio)

When the 10-year absolute prescription has expired, the NRA is obliged to write off the debt ex officio (служебно). This means the debtor does not need to file a request or take any action — the write-off is a duty of the revenue administration.

In practice, however, the ex officio write-off is not always carried out promptly. If your obligation still appears in the NRA system after the absolute prescription has expired, you have the right to request written confirmation of the extinction and insist on correction of your tax and insurance account.

Voluntary Payment After Prescription (Art. 174 TIPC)

Art. 174 TIPC addresses an important and often misunderstood principle: extinction of the public receivable by prescription does not mean the debt ceases to exist. It becomes a so-called “natural obligation” (naturalis obligatio) — an obligation that cannot be enforced but continues to exist formally.

The practical consequences are as follows:

• If the debtor pays voluntarily a prescribed debt, the payment cannot be refunded. The NRA is under no obligation to return the amount.
• The NRA cannot use coercive measures to collect a prescribed debt — no attachments, no mortgages, no deductions from bank accounts.
• If the NRA has initiated enforcement proceedings after prescription has expired, the debtor has the right to challenge those actions as unlawful.

For this reason, it is critical to check the prescription status of your obligations before making any payment on old debts. A voluntary payment of a prescribed debt is irrecoverable.

Which Public Debts Are Subject to Prescription?

The prescription rules under the TIPC apply to all public receivables established and collected under the Code. The main categories are:

• Personal income tax (PITA / ЗДДФЛ) — including advance payments and annual tax.
• Corporate income tax (CITA / ЗКПО) — tax on the profits of legal entities.
• Value added tax (VAT / ЗДДС) — including obligations arising after VAT registration.
• Mandatory social security contributions (SSC / КСО) — for state social insurance, supplementary mandatory pension insurance, under the Social Insurance Code.
• Health insurance contributions (HIC / ЗЗО) — contributions to the National Health Insurance Fund.
• Local taxes and fees (LTFA / ЗМДТ) — real estate tax, vehicle tax, waste collection fee. These are administered by municipalities, but the prescription rules of the TIPC apply to them as well.
• Fines and pecuniary sanctions — imposed by penalty decrees for administrative offences.
• Customs duties — customs tariffs and excise duties.

Practical Examples

Example 1: Self-Employed Person — Unpaid Social Security for 2020

A self-employed person failed to pay their mandatory social security contributions for 2020. The obligations were due in 2020 (monthly by the 25th of the following month).

• Start of prescription: 01.01.2021
• Expiry of 5-year general prescription (if not interrupted): 31.12.2025
• Expiry of 10-year absolute prescription: 31.12.2030

If the NRA took no action by 31.12.2025, the debt is extinguished under the general prescription. Even if the NRA did take action, after 31.12.2030 the debt is unconditionally extinguished.

Example 2: Company Under Tax Audit — Interruption of Prescription

A single-member LLC (EOOD) has a corporate tax obligation for 2019 (due by 30.06.2020). In 2023, the NRA initiates an audit and issues a tax assessment act on 01.09.2023.

• Start of prescription: 01.01.2021
• Interruption: 01.09.2023 (issuance of tax assessment act) → new 5-year period until 01.09.2028
• Absolute prescription (unchanged): 31.12.2030

Although the general prescription was extended by the interruption, the absolute 10-year period continues running from the original starting point. If the NRA takes further interrupting actions, it can extend the general prescription but not the absolute one. Learn more about appealing tax assessment acts.

Example 3: Discontinued Enforcement Proceedings

A natural person has a VAT obligation from 2018 (due in 2018). The NRA initiates enforcement proceedings in 2021 but discontinues them in 2022 due to lack of assets.

• Start of prescription: 01.01.2019
• Suspension: 2021–2022 (period of enforcement proceedings — approximately 1 year)
• General prescription: 5 years + 1 year suspension = expires approximately end of 2024 + 1 year = end of 2025
• Absolute prescription (unchanged): 31.12.2028

The suspension effectively extends the general prescription by the period of suspension but does not affect the absolute prescription.

How to Check If Your Debts Are Prescribed

If you suspect that old tax obligations may have been extinguished by prescription, you have several options:

1. NRA Electronic Portal — through the NRA’s electronic services using a qualified electronic signature (QES) or personal identification code (PIC), you can view a statement of your current obligations. Note: the system does not always automatically reflect extinction by prescription.
2. Written request for a statement — submit an application to the competent territorial directorate of the NRA for a statement of your debts and payments. You may explicitly request information about the prescription status.
3. Written request for confirmation of extinction — if you believe prescription has expired, submit a request for ex officio write-off under Art. 173(2) TIPC. The NRA is obliged to review the request and respond.
4. Consultation with a tax attorney — in complex cases (multiple interruptions, suspensions, audits), it is advisable to consult a specialist who can analyze your specific chronology.

Common Mistakes

• Believing prescription means the debt disappears. Incorrect. The obligation continues to exist as a “natural obligation” — it simply cannot be enforced. If you pay voluntarily, the money is not refunded.
• Paying after prescription and attempting a refund. Art. 174 TIPC is categorical: voluntarily paid amounts are not subject to refund. Check the prescription status before making any payment.
• Not checking whether the NRA has taken interrupting/suspending actions. Many individuals assume prescription has expired without verifying whether the NRA has issued an act, initiated enforcement proceedings, or imposed security measures that suspend or interrupt prescription.
• Confusing TIPC prescription with OCA prescription. Public receivables are extinguished under the TIPC, while private claims follow the Obligations and Contracts Act (OCA / ЗЗД). The periods, starting points, and grounds for suspension/interruption are different. The prescription for bank loans under the OCA is 5 years (Art. 110 OCA), but the rules for suspension and interruption differ entirely.
• Assuming municipal taxes follow different rules. Local taxes and fees (real estate tax, vehicle tax, waste collection fee) are administered by municipalities, but the TIPC prescription rules apply to them as well. The difference is in the competent authority, not the timeframes.

Frequently Asked Questions