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16.03.2020

State of emergency in Bulgaria - labour, global mobility and tax aspects


On 13 March 2020 Bulgaria declared a state of emergency as part of the global effort to stop the spread of COVID-19.

As part of the adopted measures, employers were asked to enforce "home offices" where possible. There are restrictions applied to public institutions, shops and restaurants. Many public events were banned. In addition, all flights from and to Spain and Italy shall be stopped as of 24:00 on Tuesday, 17 March 2020. More destinations may be included in the near future.

How would this affect your business? The possible implications may be more than your HR or tax department could predict:


Labour

  • Additional agreements to the labour agreements should be concluded if you implement fully or partially distant working plans, where specific conditions and procedures should be agreed between the employer and the employee.
  • The Bulgarian Labour Code provides for mandatory and recommendable requisites thereto.
  • If your business should decrease or cease operations – this may lead to severe labour implications in terms of termination of employment contracts and payment of compensations.
  • In some of the above cases, your organization may also need to negotiate and conclude agreements with the labour unions.

Global mobility and Tax

  • Where travelling restrictions are applied, Bulgarian employees located abroad / foreign employees located in Bulgaria may face various immigration consequences related to their temporary / permanent residence status.
  • Visa extensions may be required, with difficulties to be granted, e.g. lack of possibility to apply for them remotely.
  • The tax and social insurance status of employees located to work in another country and forced to stay more than 183 days in this country would likely change.

Specific Health Measures

  • All individuals entering the Bulgarian territory from China, Italy, Spain and South Korea should be quarantined for 2 weeks as of the date of entrance.
  • The breach of the quarantine restrictions can lead to both criminal liability - up to five years in prison and a fine amounting up to € 25 000.
  • All persons entering Bulgaria are examined individually and further monitored for symptoms.