In its judgment of 3 July 2025, the Court of Justice of the European Union ruled on the compatibility with Union law of Bulgarian legislation which, for the same tax infringement (failure to issue a fiscal receipt), provides for both a coercive administrative measure (sealing of business premises and prohibition of access) and a financial penalty, imposed through separate, autonomous and uncoordinated procedures. Furthermore, the case deals with national provisions that impose a high and fixed minimum for financial penalties, without allowing the judge any room to adjust them according to the actual seriousness of the infringement.

The fined company had failed to record 85 sales transactions at a beach bar-restaurant. For each of these omissions, a financial penalty of BGN 500 (approximately EUR 250) was imposed, for a total of BGN 42,500, despite the total amount of evaded VAT being only BGN 268 (approximately EUR 134). In addition, the premises were sealed for 14 days due to a coercive administrative measure applied before the decision had become final.

The Court held that, in such circumstances, both measures (sealing and financial penalty) must be regarded as criminal in nature, in light of their severity and punitive function. Therefore, their combination, in the absence of coordination mechanisms and without guarantees ensuring respect for the principle of proportionality, violates Article 50 of the Charter of Fundamental Rights of the European Union (ne bis in idem), as well as Article 273 of the VAT Directive 2006/112 and Article 325 TFEU.

As for the second question raised by the national court, the Court found that Bulgarian legislation preventing the judge from reducing the financial penalty below a fixed minimum, even in the case of minor infringements, and not allowing replacement with milder penalties, is contrary to the principle of proportionality (Article 49(3) of the Charter).

 

(Comment by Chiara Francioso)