Are late interest costs and counterparty penalties recognized for tax purposes?
Contact us for a paid consultation – we respond quickly!
ZKPO regulates when interest and penalty expenses can be recognized or not recognized for tax purposes and to follow a transformation of the financial result.
According to the text of the law:
ZKPO Art. 26. The following accounting expenses are not recognized for tax purposes:
- (suppl. – SG No. 94 of 2012, in force from 01.01.2013) expenses for fines, confiscations, including under Art. 307a of the Criminal Code and other sanctions for violation of regulations, interest for overdue public state or municipal obligations;
To clarify the text related to relations between legal entities, there is an opinion of the National Revenue Agency, Sofia with Ex. No. 53-02-338.
If interest (including overdue interest) and penalties are not related to a violation of regulations – they are recognized for tax purposes and no conversion of the financial result follows.
Have questions? Contact us
Contact us today to discuss the best solution tailored to your inquiry!
