Several legislative updates will support the legal profession in Bulgaria, according to Gugushev & Partners Partner Dafinka Stoycheva, with the push toward green energy, (another) pending government change, and a landmark CJEU decision also at the top of the agenda for lawyers in the country.
“During the past year, a lot has changed for the legal profession,” Stoycheva begins. “The old legislation concerning the legal profession was a bit outdated. Many outstanding proposals were in place, for a while now, from lawyers' associations,” she adds, with the amendments being “timely, since there is a high number of jurists per capita in the country, and there were a number of challenges they were facing.”
“To begin with, the government increased the legally recognized costs of lawyers,” Stoycheva points out, adding that the taxes will be lower, compared to previous years. “This is a good update, considering that, during the COVID-19 pandemic, our profession suffered with courts being closed and businesses holding off on their disputes, while law firms still had their expenses going. For more than two years the lawyers looked forward to this change,” she notes.
Another big update is that, since 2021, lawyers can establish sole law firms, with the ban on being executive directors and/or managers in companies also lifted, Stoycheva says. “This will enable lawyers to be more competitive and not be limited by the law if they want to grow other services or be leaders in the businesses of tomorrow.”
Something else, talked about not only by lawyers, is that the VAT registration threshold could be raised to BGN 100,000, from 2023. “This will be a big relief for many small businesses and professions, including lawyers, who have the burden to have their own accountant in a very early stage of their growth, as the current threshold is BGN 50,000. The amendment was accepted at first reading, however, a mandatory derogation from the EU is required to bring it into action,” she explains.
As for the politics, Stoycheva notes “the current climate in Bulgaria is a bit complicated. We are yet again moving toward the election of a new government, probably in October, which would be the fourth time in the last year and a half.”
According to Stoycheva, in Bulgaria, like elsewhere, energy is a hot topic. “Some of the most important challenges are related to the shifting focus on renewable energy. There are significant efforts to reduce the dependence on fossil fuels.” She adds, that “the EU Commission proposal suggests that increasing renewable energy by 45% is the target for 2030. Bulgaria will also strive to achieve a 27% share from renewables in gross final consumption by 2030.”
Finally, Stoycheva highlights a recent decision of the CJEU that introduced changes in Bulgarian legislation: “the dispute was related to the registration of geographic indications for agriculture products,” she notes. “Following the CJEU ruling, the Bulgarian supreme court confirmed that the registration for agricultural products is admissible only at the EU level – and not at a national one. The decision was followed by introducing changes to legislation, having an impact on all the companies in the Bulgarian market. This was one of those rare cases when Bulgaria applied to the CJEU to settle a dispute and is an important precedent for that reason as well,” she concludes.