Simeon Borisov Sakskoburggotski spent decades in exile in Egypt and Spain. Alamy
Simeon Borisov Sakskoburggotski spent decades in exile in Egypt and Spain. Alamy
Simeon Borisov Sakskoburggotski spent decades in exile in Egypt and Spain. Alamy
Simeon Borisov Sakskoburggotski spent decades in exile in Egypt and Spain. Alamy

Last tsar of Bulgaria loses palace property battle


Paul Peachey
  • English
  • Arabic

The last tsar of Bulgaria has lost a legal battle to secure the return of a mountain palace and hunting lodge that were seized by the country’s communist rulers when the monarchy was abolished 75 years ago.

Simeon Sakskoburggotski, who ascended the throne as Simeon II in 1943, when he was 6, spent 50 years in Egypt and Spain after the 1946 referendum in which 90 per cent of Bulgarians voted for a republic.

The former monarch claims that a series of royal residences and woodland should have been returned to his family’s control after a domestic court ruling in 1998 found the seizures were discriminatory and breached the right to property ownership.

The former tsar returned to Bulgaria full-time in 2001 and now lives in Vrana Palace on the edge of Sofia, a sprawling 2,000-sq-metre complex surrounded by botanical gardens that were donated to the state by the family.

Simeon Sakskoburggotski was 6 when ascended the throne as Simeon II in 1943. Photo: Wikimedia Commons
Simeon Sakskoburggotski was 6 when ascended the throne as Simeon II in 1943. Photo: Wikimedia Commons

But the palace – and other properties once owned by the monarchy – remain at the centre of a series of ownership battles.

The dispute bubbled below the surface after the king returned in 2001 to serve as prime minister for four years after setting up a political party promising to transform the country with radical economic ideas.

But the issue re-emerged when he left politics in 2009. After efforts were made to force Simeon II and his Spanish wife to leave Vrana, the former ruler in 2018 told Bulgarian media: “I feel humiliated. It is like the state will force me again into exile.”

The properties taken from the royals included a now-demolished, two-storey house in Sofia, four palaces, a hunting lodge and a thermal resort where the former tsar’s older sister, Maria-Luisa Borisova Chrobok, is currently listed as the owner, court documents show.

The former tsar and his sister – a German-Bulgarian citizen who now lives in the US − took the case to the European Court of Human Rights.

It ruled this week on two properties – the Sitnyakovo summer palace in the Rila mountains and a hunting lodge – and on the commercial exploitation of woodland on former royal land.

Vrana Palace near Sofia, Bulgaria. Alamy
Vrana Palace near Sofia, Bulgaria. Alamy

Eight judges of the court in Strasbourg, France unanimously dismissed the former royals’ claims to the two properties. It said domestic court rulings that went against them were not “arbitrary or manifestly unreasonable”.

But it ruled partially in favour of the family over a ban on logging income with damages to be decided at a later date. It ordered the Bulgarian government to pay €5,000 ($5,914) in costs.

The court ensures that members of the 47-state Council of Europe respect human rights enshrined in the European Convention on Human Rights.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

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South Korea

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

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Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
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Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.

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Updated: September 08, 2021, 1:55 PM