Authors: Ivan Toskov and Svetoslav Yordanov

The article makes an overview of the solidary liability in accordance to article 177 of the VAT Law and  the effect on the local business in case of its incorrect implementation by the Tax Administration.

The article discusses issues related to the implementation of the solidary liability provided in article 177 of the VAT Law, a measure used by the Bulgarian State as a reaction against the frauds with Value Added Tax. In the article are analyzed the prerequisites provided in the Law for applying this type of liability, and in particular its subjective side, namely ‘the fact of knowing’ by the taxable person that the due VAT shall not be paid to the State, or under certain circumstances - the legal presumption for ‘obligation of knowing’. There is also an overview of the overall effect on business in cases of incorrect implementation of the solidary liability by the Tax Administration. Some recommendations are given by the authors what taxable persons should do trying to prevent becoming subject of the solidary liability.