Scientific paper ID 2570 : 2024/3

This article examines a relatively common scheme for draining VAT and social security from commercial companies. The creation of a number of fictitious relationships between the contracting authority (real company and bogus companies). For the purposes of the article, the following are considered: Social insurance code, VAT, Law on Limitation of Cash Payments, Accounting Law and an example from judicial practice. A case study with subcontracting of construction work from one commercial company to a number of phantom subcontractors was considered. With the adoption in 2011 of the Law on Limitation of Cash Payments, certain restrictions were placed that payments on the territory of the country can only be made by transfer or payment to a payment account, when they are of a value equal to or exceeding BGN 10,000. When the value is below BGN 10,000, but can be considered as part of interconnected payment transactions on the same basis, the total value of which is equal to or exceeds BGN 10,000.