Bulgaria

Adoption date

Type of measure

Beneficiaries' sector specification

Description of measure

10/04/2020

Private moratoria

Banking sector

On 10.04.2020 the BNB Governing Council approved a plan, proposed by the Association of Banks in Bulgaria, on delay and treatment of banks' and bank subsidiaries' loans in the context of the state of emergency due to COVID-19. The approved document is a private moratorium, implementing the EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in light of the COVID-19 crisis (EBA/GL/2020/02).
The moratorium provides the possibility to change the schedule of the loan principal and/or interest payment without modifying other key loan parameters such as the interest rate. Three standardized approaches are envisaged: 1) Principal and interest payment delay for up to 6 months; 2) Principal payment delay for up to 6 months; 3) Applicable to revolving loan products.

The rescheduling could not be longer than 6 months ending on 31.12.2020. The scope of loans that can be rescheduled covers only loans which as of 1 March 2020 were performing or past due no more than 90 days.
Based on decision to comply with the Guidelines EBA/GL/2020/08, voted by the European Banking Authority (EBA) with a view to amend Guidelines EBA/GL/2020/02 on legislative and non-legislative moratoria on loan repayments applied in light of the COVID-19 crisis, on 14.07.2020 the Bulgarian National Bank approved a request by the Association of Banks in Bulgaria for an extension of the deadlines of the moratorium on payments.
The changes are related to:
• extension of the deadline for submitting a request by bank customers for deferral of liabilities and their approval by banks – until 30 September 2020;
• extension of the deadline for deferral of liabilities of bank customers - until 31 March 2021.
The extension of the term of the liability deferral procedure applies to exposures for which no request for deferral of payments was submitted before 22 June 2020.

Based on decision to comply with the Guidelines EBA/GL/2020/15, voted by the European Banking Authority (EBA) with a view to amend Guidelines EBA/GL/2020/02 on legislative and non-legislative moratoria on loan repayments applied in light of the COVID-19 crisis, on 11.12.2020 the Bulgarian National Bank approved a request by the Association of Banks in Bulgaria for an extension of the moratorium on payments until 31 December 2021:
• extension of the deadline for submitting a request by bank customers for deferral of liabilities by 23 March 2021 with a deadline for approval by banks by 31 March 2021;
• loans that have been under moratorium can benefit from this extension, but the deferral cannot exceed 9 months (including the previous periods of deferral).

01/04/2020

Direct grants

All non-financial sector

The state will cover 60 % of the monthly gross salary (including employer’s social security contributions) of the benefitting personnel for companies, which have had to close completely or partially their business activity as a result of the COVID-19 related measures. The companies have to keep their employees and are responsible to cover the rest 40% of the wages.

11/04/2020

Direct grants

Households

One-off aid of 375 BGN are granted to parents of children aged under 14 and who are in a non-paid leave for a period longer than 20 working days and who are not able to work from home.

14/04/2020

Public guarantees

Households

Bulgarian Government approved a "Program to guarantee interest-free loans to people, who have been deprived of the possibility to work as a result of the COVID-19 pandemic". The budget of the program is BGN 300 million and will be allocated from the capital increase of the state-owned Bulgarian Development Bank (BDB). Each person, who fulfills the conditions of the program will be allowed to borrow once up to BGN 6 900 (app. EUR 3 528) for a term of up to 5 years, with a grace period of not less than 6 months and not more than 24 months.

23/03/2020

Tax deferrals

All sectors

Extension of the deadline for submission of the annual corporate income tax returns, and for the payment of the taxes assessed therein, until 30 June 2020. Extension of the deadline for submission of the annual income tax returns and for payment of the tax assessed therein until 30 June 2020 for persons carrying out economic activity in a trading capacity within the meaning given by the Commerce Act, including any sole traders, as well as for persons registered as farmers who have opted to be taxed on the annual tax base. Extension of the deadline for payment of real estate tax as well as the tax on transport vehicles, with a 5% discount of the total annual amount due, until 30 June 2020.

07/05/2020

Public guarantees

Non-financial corporations

Capital increase of the state-owned Bulgarian Development Bank (BDB) by BGN 400 million. The funds will be used to support the economy in the context of the COVID-19 pandemic, including to provide portfolio guarantees to the banks, which will allow them to extend credit to the non-financial corporate sector under more flexible conditions.

24/06/2020

Public guarantees

Non-financial corporations

Reallocation of resources under the European Structural and Investment funds earmarked for implementation of financial instruments and managed by Fund Manager of Financial Instruments in Bulgaria PLC (FMFIB). FMFIB would structure and place capped portfolio guarantees to banks so to support sustainable levels of SME lending and SME investments. The product is coupled with an interest rate subsidy for companies which demonstrate sub-optimal repayment capacity but nevertheless commit to sustain their number of employees.

10/06/2020

Tax reliefs

All non-financial sector

The VAT rate on specific goods and services has been decreased from 20% to 9% until 31 December 2021. The new rate applies to:
- supply and import of books on physical support or supplied by electronic means, or both, (including textbooks, instructional books and study sets, children's illustrated books, for drawing or colouring, printed or handwritten music editions), other than publications which are wholly or mainly intended for advertising, other than publications which are wholly or mainly composed of video or audio-music content – from 1.07.2020;

- the supply of restaurant and catering services, consisting of the delivery of prepared or uncooked food; this does not apply to restaurant and catering services which consist in the supply of spirits even if ancillary supply – from 1.07.2020;
- the import and supply of food suitable for babies or young children; baby diapers and similar baby hygiene goods – from 1.07.2020;
- the supply of a general tourist service (package), as well as excursions organized by tour operators and travel agents with occasional bus transport of passengers– from 1.08.2020;
- the use of sport facilities– from 1.08.2020.

23/04/2020

Tax reliefs

All non-financial sector

Pursuant to Commission’s Decision 2020/491, Council Decree № 75 of 2007 of the Council of Ministers of Republic of Bulgaria allows for exemption from VAT and customs duties of the importation of certain medical goods necessary to combat the effects of the COVID-19 pandemic outbreak. The relief applies to importations made from 30 January 2020 to 31 October 2020. Eligible for the relief and exemption of VAT are the goods imported by State organisations. The goods and organisations are exhaustively listed in annexes to Council Decree № 75.

03/07/2020

Direct grants

All non-financial sector

Wage subsidies shall be paid for the whole or for a part of the period and refer to the following groups of employees and workers, who are threatened by lay-offs due to the still unrecovered income of the employers caused by the measures to restrict the corona virus contamination:
1. workers and employees whose activities were discontinued, due to the suspension of work during the period from 13 March to 31 December 2020, on the basis of Article 120c of the Labour Code;

2. workers and employees who, during the period from 13 March to 31 December 2020, have worked part-time on the basis of Art. 138a, para. 2 of the Labour Code;
3. workers and employees who have taken leave during the period from 13 March to 31 December 2020 on the basis of Art. 173a of the Labour Code;
4. workers and employees whose employment has been retained after a notification for mass dismissals has been submitted pursuant to Art. 130a of the Labour Code and Art. 24 of the Employment Promotion Act during the period 13 March 2020 till 31 December 2020;
5. workers and employees, excluding those referred in items 1-4, who are insured in sector I Accommodation and food service activities and economic activity with code 49.39 “Other passenger land transport n.e.c“ of the Classification of Economic Activities (NACE.BG-2008).

12/05/2020

Direct grants

All non-financial sector

Provision of non repayable financial support (grant) to micro and small sized enterprises for working capital

10/07/2020

Direct grants

All non-financial sector

Provision of non repayable financial support (grant) to medium-sized enterprises for working capital

10/12/2020

Tax reliefs

All non-financial sector

Bulgaria grants an exemption with deductibility of VAT paid at the preceding stage in respect of the supply and Intra-Community acquisitions of COVID-19 vaccines and in vitro diagnostic medical devices. Such an exemption applies also to the services closely linked to such vaccines and devices

23/04/2020

Equity participation

All non-financial sector

The aid will be granted in the form of equity and/or quasi equity investments. All types of eligible investments are related to a provision of finance to an SME in return of partial ownership in that SME and/or include an option for acquiring equity in the SME. In particular, eligible instruments will include:
- pure equity investments : transferable shares, other securities or equivalent rights and instruments that entitle to a share in the capital of the enterprise (eventually including buy-back option), or

- quasi equity investments: convertible debt, such as debt with linked warrants or similar derivatives, conversion options embedded in the main debt contractual framework, etc.

21/12/2020

Direct grants

All non-financial sector

Provision of non repayable financial support (grant) to SMEs for working capital

26/11/2020

Tax reliefs

Households

The tax relief for children allows taxpayers to reduce their tax base by: 4500 BGN for 1 child; 9000 BGN for 2 children; 13500 BGN for 3 and more children. The tax relief for children with disabilities allow taxpayers to reduce their tax base by 9000 BGN for a child with a disability.

03/12/2020

Other measures of fiscal nature

Non-financial corporations

The retained corporate income tax can be invested by farmers in new buildings and new agricultural machinery in the 2 years following the year of the retention.

01/10/2021

Public guarantees

Non-financial corporations

Reallocation of resources under the European Structural and Investment funds earmarked for implementation of financial instruments and managed by Fund Manager of Financial Instruments in Bulgaria PLC (FMFIB). FMFIB would structure and place capped portfolio guarantees to banks so to support sustainable levels of SME lending and SME investments.

19/03/2020

CCyB

Banking sector

The planned increases of the CCyB from 0.5% to 1% as of April 1 2020, and from 1% to 1.5% in 2021 are cancelled. The CCyB remains at 0.5%. The effect of of the measure is estimated at BGN 0.7 billion (0.6% of GDP).

24/03/2020

CCyB

Securities and markets

The planned increases of the CCyB from 0.5% to 1% as of April 1 2020, and from 1% to 1.5% in 2021 are cancelled. The CCyB remains at 0.5%.

19/03/2020

Dividend distribution policy

Banking sector

Retaining year-end 2019 profit for all banks, including a ban on the redistribution of profit, accumulated during previous years. According to the BNB decision, credit institutions shall not distribute profits for 2019, in whole or in part, in the form of dividends or other similar payments, nor shall they distribute the elements of capital as defined in Part Two, Title 1 of EU Regulation 575/2013, which are formed on the basis of the financial result for the previous periods.
The effect of the measure amounts to BGN 1.6 billion ( 1.4% of GDP).

19/03/2020

Reporting requirements

All financial sectors

FSC informed the financial markets about ESMA's Public Statement about postponement of reporting obligations under Regulation (EU) 2015/23651 (SFTR) in a COVID-19 situation

25/03/2020

Special provisioning policy

All financial sectors

The time limits set in a law, which expire during the state of emergency and involve the exercise of rights or the fulfilment of obligations by individuals shall be extended by one month as from the lifting of the state of emergency.

25/03/2020

Reporting requirements

Securities and markets

Extension of deadlines for disclosure of financial statements and information and holding general meetings of public companies and issuers. Reported relief measures for fund managers (submission of reports and other information). Extension of time limits for disclosure of financial statements and information by investment intermediaries, market operator and the entry into force of a specific paragraph.

25/03/2020

Reporting requirements

Insurance sector

Extension of deadlines for submiting monthly supervisory data by insurers

25/03/2020

Reporting requirements

Pension funds

Extension of deadlines for submiting supervisory data and public disclosure of information by pension insurance companies

26/03/2020

Reporting requirements

Insurance sector

FSC issued Guidelines for the application of EIOPA Recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure - Coronavirus/COVID-19 (EIOPA-BoS-20/236)

27/03/2020

Reporting requirements

Securities and markets

Recommendation to the issuers of securities regarding the extension of the deadlines for submission of financial statements. The FSC pay attention to the announcement of estimated deadlines for their submission and and reasons for the subsequent publication.

02/04/2020

Announcement or public statement

Insurance sector

FSC informed the local (re)insurance market about EIOPA's public statement urging that at the current juncture (re)insurers temporarily suspend all discretionary dividend distributions and share buy backs aimed at remunerating shareholders as a temporary measure in relation to COVID-19 situation. (Re)insurers that consider themselves legally required to pay-out dividends or large amounts of variable remuneration should explain the underlying reasons to their NCA.

02/04/2020

Announcement or public statement

Insurance sector

FSC informed the public about the EIOPA's 'Call to action for insurers and intermediaries to mitigate the impact of Coronavirus/COVID-19 on consumers'

02/04/2020

Announcement or public statement

Securities and markets

FSC informed the financial markets and investment firms about ESMA's Public Statement 'COVID-19: Clarification of issues related to the publication of reports by execution venues and firms as required under RTS 27 and 28'

09/04/2020

Announcement or public statement

Securities and markets

FSC informed the financial sector about ESMA's Public Statement ‘Actions to mitigate the impact of COVID-19 on the deadlines for the publication of periodic reports by fund managers’

16/03/2020

Announcement or public statement

Securities and markets

The FSC informed the investment community about ESMA's decision temporarily requiring the holders of net short positions in shares traded on a European Union (EU) regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% of the issued share capital.

23/03/2020

Exemption from penalties/fines

All non-financial sector

As regards the fulfilment of financial obligations, the law stipulates that until the revocation of the state of emergency, no sanctions shall be imposed in the event of payments delays such as interest- and delay penalties, contract cancellations and repossessions.
The following measures are applied from 24.04.2020 until the end of the state of emergency:

- All public sales and repossessions shall be suspended during the state of emergency, and new dates shall be set for them after its revocation.
- No distraints can be imposed on salaries, pensions, bank accounts and movable and immovable property of physical persons.

25/03/2020

Announcement or public statement

Securities and markets

FSC informed the financial sector about ESMA's Public Statement ‘Accounting implications of the COVID-19 outbreak on the calculation of expected credit losses in accordance with IFRS 9’

28/01/2021

Dividend distribution policy

Banking sector

Retaining year-end 2020 profit for all banks, including a ban on the redistribution of profit, accumulated during previous years. Banks shall not distribute profits for 2020, in whole or in part, in the form of dividends, share buy-backs or other similar payments, nor shall they distribute the elements of capital as defined in Part Two, Title 1 of EU Regulation 575/2013, which are formed on the basis of the financial result for the previous periods.