Bulgaria proposes cashless construction payments and procurement changes

The Bulgarian Ministry of Finance has proposed a mandate requiring all payments between participants in the construction sector to be made via bank transfers. The proposal, currently under public discussion, aims to cover contracts for construction, installation, material deliveries, and equipment. The Ministry stated that the measure is intended to improve the traceability of financial flows and prevent revenue concealment, undeclared employment, and the use of fictitious expenses, noting that the sector frequently utilizes subcontractors who are small enterprises or individuals.

Separately, the Bulgarian government has approved changes to public procurement regulations regarding inflation indexation. Under the new rules, advance payments for public projects will no longer be subject to indexation. While the size of contract price indexation will still be determined quarterly based on a formula involving material prices and minimum wages, advances are considered preliminary payments to initiate work and thus will not be adjusted for inflation. The changes aim to provide greater clarity by calculating indexation from the moment work is performed rather than upon its acceptance.