Follow-up: Mass Penalties and Sealing of Premises – 2026 the Businesses Have Strong Legal Grounds for Protection

In my last post, I shared my observations on the aggressive enforcement activity at the end of 2025. Today, at the beginning of the new year, I would like to provide several “weapons” to strengthen the legal protection of Bulgarian businesses against administrative arbitrariness.

Do not hesitate to object if you disagree with an Acts for establishing administrative violations, a Penalty decree, or an Order for a compulsory administrative measure (often the sealing/closure of premises) issued to your company for a tax violation.

There is no doubt that fiscal control is important to protect the legal order. The problem arises when the drive for revenue collection turns into “mechanical” sanctioning without an individual assessment of the case.

En masse, Bulgarian businesses, regardless of the scale, choose to pay the initial sanction even when they consider it unjust. While large corporations view payment as a “pragmatic” way to save administrative resources, small businesses often perceive it as a “cheaper” alternative to investing in specialized legal defense.

In both cases, however, this apparent peace is a strategic illusion.

Payment constitutes an admission of a committed violation, which places you in a hypothesis of “repeated violation”. This means that during a subsequent check or audit, the risk of an exponentially higher sanction is significantly increased, and the sealing of the business premises becomes justified. Appealing an unfairly imposed first sanction is an investment in the security of your business tomorrow.

More importantly, your defense is supported by three rulings of the Court of Justice of the European Union (CJEU), issued on Bulgarian cases:

• Case C-97/21 (MV-98) – establishes the principle of proportionality and the impermissibility of accumulating a sanction (fine) and the sealing of premises as it creates an excessive burden for the business.
• Case C-733/23 (“Beach and Bar Management” EOOD) – confirms that specific facts for the case must be considered upon determining a sanction. It establishes that even the minimum statutory penalty is excessively high if the damage to the state is insignificant – in this case, 85 sanctions of 500 BGN each (totaling 42,500 BGN or approximately €21,250) were imposed for unissued receipts, while the total VAT due on them was only 268.02 BGN (approximately €134).
• Case C-605/23 (“Ati-19” EOOD) – reaffirms the primacy of EU law, empowering national courts, on their own initiative, to set aside any active national provision that contradicts it.

These three rulings are a clear signal from the CJEU against administrative arbitrariness in our country. With them, the CJEU confirms that national revenue authorities cannot impose sanctions mechanically but must strictly observe the balance between the violation and the penalty. The fiscal interest of the state cannot justify measures that lead to an excessive financial burden or a punitive effect beyond reasonable limits.

At the beginning of 2026, the Euro is already a reality, and audits from the National Revenues for potential abuses are likely to intensify. Nevertheless, supranational standards for justice and predictability must be actively upheld.

Do not allow administrative pressure to jeopardize the stability of your business.

The law is on your side – use it strategically!