The new Civil Procedure Code entered in effect on 1st March 2008. The draft was adopted by the National Assembly on 6th July 2007 and promulgated in the State Gazette on 20th July 2007. Even before its entering in effect, the currently effective CPC was repeatedly amended. Less than three years after its entering into force, few amendments are already done as two of these amendments have changed the CPC in all his parts.

This was necessitated by the imperfections in the organization of the procedural relations under the effective CPC. Its practical application proved that there are serious gaps in the legislation, and hypotheses, which are not provided for and covered by the regulatory framework.

Here is an example, clearly illustrating the above.

Article 446 of the effective CPC provides for the opportunity to direct the enforcement to the employment remuneration of the debtor. Two hypotheses are identified, depending on whether the received remuneration is below or above the established amount of the minimum salary for the country.

Let us consider par. 1, item 2 of article 446 CPC, covering the case of debtor’s employment remuneration, which is higher than the minimum salary for the country. In this hypothesis, the legislator connects the amount, which may be deducted by the employer in case of receipt of a distress notice to that effect, with the amount of the tax, due by the debtor under the Physical Persons Income Tax Act. If the debtor has no dependent children, a sum to the amount of the tax, due under the act, is deducted. Here is the text of the currently effective article 446:

Art. 446 (current version) (1) If the execution is directed to employment remuneration or other labour remuneration, as well to a pension, whose amount is above the minimum salary, there may be deducted, if the income of the debtor is:

1. up to the amount of the minimum salary – the surplus above the guaranteed minimum income, provided that the debtor has no children, and half of this surplus, if the debtor has dependent children;
2. above the amount of the minimum salary – the double amount of the due tax under the Physical Persons Income Tax Act, if the debtor has no children, and the amount of the due tax under the Physical Persons Income Tax Act, if the debtor has dependent children.

What would happen, however, when the debtor is a person, exercising his/her right to tax concessions under article 18 of the PPITA, and, as a result of these concessions, his/her employment remuneration is exempt from taxation? This is not an abstract, but quite real and frequent hypothesis. The persons with duly recognized reduced fitness for work within 50% and above 50% are entitled to such tax concessions. If such a person receives a salary to the amount of BGN 450, for example, his/her employment income shall not be charged with a tax, because after making the calculations pursuant to PPITA, providing for that matter, the tax base comes up to zero. This practically means that the remuneration of this person shall not be charged with a tax.Upon receipt of a distress notice from a receiver for deduction from the employment remuneration of such a person, the employer will face the impossibility to determine the sum, which may be deducted. The provision of article 446, par. 1, item 2 CPC stipulates that it is the product of the sum of the tax, due under PPITA, and the number 2, respectively, 1. In both cases, the amount of the sum to be deducted is zero.Does it mean that no deductions shall be made from the salary of such a person? Of course, not. Article 446 CPC deals with an initiated execution process, which, in turn, presupposes a successfully concluded claim proceedings – the presence of a writ of execution or another deed, subject to execution, i.e. there is an undoubtedly established reasonability of the claimants claim. There is a gap in the legislation.

At present, a draft law for amendment of CPC is filed at the National Assembly. One of the amendments, provided for therein, is the amendment of article 446, aiming at the overcoming of this legislative gap, which was presented herein above. Here is the text of the envisaged amendment:

„Article 446 (draft law for amendment of CPC) (1) If the execution is directed to the employment remuneration or any other labour remuneration, as well as to a pension, whose amount is above the minimum salary, there may only be deducted:

1. if the sentenced person receives up to BGN 300 per month – 1/4 part, if the person has no children, and 1/5, if the person has dependent children;
2. if the sentenced person receives between BGN 300 and BGN 600 per month – 1/3 part, if the person has no children, and 1/4, if the person has dependent children;
3. if the sentenced person receives between BGN 600 and BGN 1200 per month – 1/2 part, if the person has no children, and 1/3, if the person has dependent children;
4. if the sentenced person receives above BGN 1200 per month – the surplus above BGN 600, if the person has no children, and the surplus above BGN 800, if the person has dependent children.”

As evident from the above-cited extract of the draft law for amendment of CPC, the amount of the sum, which shall be deducted from the employment remuneration of the debtor, shall be connected with fixed sums – as was the case under the repealed CPC, however, to a higher amount as compared thereto. This is the correct legislative decision. Thus, there will be prevented the absurd situation, where a receivable, upheld by the court, may not be satisfied due to the impossibility to calculate the amount of the sums, subject to deduction by the employer.

* This article is current toward march, 2008.

The amendment in art.446 CPC has been accepted in the text indicated as a draft law above, and has been published in State Gazette, 50 from 30.05.2008. This amendment is in force as of 01.03.2008.