State of emergency until 13 May 2020
The state of emergency declared by the Bulgarian Parliament on 13 March, ends on 13 May 2020. Afterwards, restrictive measures intended to mitigate the risk of COVID-19, if needed, will be imposed via an amendment of the Health Act, allowing the Minister of Health to issue specific quarantine orders if necessary.
Unlike the orders during the state of emergency, these orders will be subject to appeal. Legislative amendments are expected as well with respect to the social and economic measures necessary to mitigate the negative consequences of the health crisis.
All rights and preferential regimes, introduced during the state of emergency e.g. the 60/40 compensation scheme for employers, will remain in effect until 13 July 2020.
The state of emergency restrictions have been relaxed step by step since 21 April – first with respect to regular medical consultations of children and pregnant women as well as to non-emergency surgeries and consultations in hospitals. The farmers markets are now open again. Since 1 May the national parks welcome visitors again, with social distancing of at least 2 meters As of 6 May, 2020, restaurants, cafés and the like are open for business again, at least in part – they are allowed to serve clients if they have open-air areas (e.g. terraces and gardens) provided that they can ensure 1,5 meter between the tables. Pools and beach complexes are open as well, if they can provide at least 5 m between each placement.
Currently, Bulgaria has relatively low mortality rates compared to other countries in the European Union with only 82 people out of 1316 current patients with COVID-19.
Measures to avoid bank loan defaults
The Bulgarian National Bank has approved a plan proposed by the main commercial banks in Bulgaria in line with the guidance of the European Banking Authority for handling COVID-19 crisis.
As of 10 April 2020, borrowers have the option to suspend entirely or in part the payments on bank loans for a period of up to 6 months but in any case, not later than 31 December 2020.
This option is exercised upon request of the borrower subject to approval of the bank provided that by 1 March 2020 the borrower either has duly paid all obligations or is in delay of up to 90 days. Borrowers can suspend payment of interest, or principal, or all payment on the loan altogether.
However, this is not a moratorium as advertised by the banks – each suspension is approved upon discretion of the bank and the borrowers will pay interest for the deference period, which ultimately will increase their costs for the loan.
Support of local farmers
Bulgarian government issued Ruling No. 70 of 14 April 2020 imposing certain obligations on food store chains to purchase products from local producers such as milk, honey, meat and eggs until 31 December 2020.
The measures apply to chains with stores in at least three districts in Bulgaria and producers located within the same district or in those adjacent to it. Payments to suppliers are to be made within 14 days after delivery; no commissions can be required by the farmers.
The measure is intended to support small local producers who experience intense hardship as a result of the COVID-19 related restrictions.
While initially the organization of the food store chains reacted strongly against the measure, following emergency consultations with the government, as of 15 April 2020, all involved declared they will work together towards supporting local farmers to the benefit of Bulgarian consumers.
Tax related measures
Longer periods for filing declarations for corporate and income tax until 30 June 2020 are approved. During the state of emergency, no penalty interest shall accrue on tax dues, no enforcement shall be initiated either; the pending enforcement procedures will be suspended. The requirements for VAT and social security reporting and payment remain without change.