News from Bulgaria

  • Bulgaria implements CbC reporting into legislation
    CbC reporting was implemented in the Bulgarian Legislation via its introduction in the Act to Amend and Supplement the Tax and Social Security Procedure Code (TSSPC), published in issue 63 of the State Gazette on 04.08.2017. Bulgarian tax authorities are trying to implement stricter rules to combat tax avoidance. Through the introduction of the CbC report in the Bulgarian legislation...
  • To Petya or NotPetya; this is how to protect yourself!
    A new ransomware has risen and is spreading across Europe like wild fire. This new malware is creating chaos across businesses, from supermarkets to shipping ports, ad agencies and law firms. The new ransomware - code named “NotPateya” - shares some very similar characteristics to a very recent malware “Wannacry”. About NotPateya NotPateya gets its name from an older malware...
  • Clarifications published on dividends paid between Bulgaria and Moldova
    Moldova has recently clarified certain requirements related to the taxation of dividends distributed during the period 2008-2015 to residents of Bulgaria, in the context of the application of the double tax treaty concluded between the two countries in 1998. According to the treaty, Bulgarian residents who hold at least 51 % of the capital of a dividend-distributing Moldavian company are...
  • Bulgaria amends VAT Law
    Recent important amendments to the Bulgarian Law on Value Added Tax (VAT) have become applicable as of January 1, 2017. The amendments are related to mixed supplies of assets and immovable property, tour operator margin scheme, obligation for VAT registration in case of inheritance as well as changes in the rules for supplies made by a person acting in his...
  • Purchasing a real estate in Bulgaria could be risky
    In the last 20 years over 300,000 Russian citizens have bought a so-called second home in the Republic of Bulgaria. Studies show that 25 percent of them are willing to relocate permanently in Bulgaria. About 500,000 properties have been purchased and the amount of Russian investments in real estate has been estimated to range between 4 and 5 billion US...
  • Bulgaria exempts food donations from VAT; introduces conditions for exemption
    On November 8, 2016, the new Bulgarian VAT system applicable to free food donations was published in the Official Gazette of Bulgaria.  The Law will be applicable as of January 1, 2017 and will result in VAT-free supply of food donations to food banks, under conditions. Food banking and related activities in Bulgaria include donations of food from manufacturers and...
  • Bulgarian Transfer Pricing Regulations
    Bulgaria fully applies the OECD Transfer Pricing Guidelines. Bulgarian transfer pricing rules were initially introduced in the Corporate Income Tax Act (CITA), Tax and Social Security Procedures Code (TSSPC), as well as in the Ordinance № H-9 for implementation of the TP methods, issued by the Minister of Finance on 29 August 2006. Following international trends, a Manual providing guidance...
  • Bulgaria changes calculation method of penalties for non-publishing of financial statements
    The publication of annual financial statements in the trade register is often neglected by Bulgarian trading enterprises. This is partly due to the lack of effective penalties imposed by authorities over the years. However, the latest changes affecting the publication of financial statements aim to remedy the situation. Effectively, all companies are required to submit their AFS to the trade...
  • Bulgaria amends VAT Law; requires liquid fuel traders to provide collateral
    A recent amendment to the Bulgarian Law on Value Added Tax (VAT) introduces a new obligation for traders of liquid fuels to provide security/collateral when making such supplies. The aim is to prevent VAT frauds when trading with liquid fuels. The amendments to the VAT Act introduce a mechanism whereby the liquid fuel traders will be obliged to provide to...
  • VAT Deduction of Holding Companies
    On July 16th, 2015, the CJEU issued its judgment concerning the VАT deduction of holding compаnies. The decision, also, gives us the аnswer whether legаl entities without legаl personаlity are in a position to be included аs pаrt of а VАT group. A cruciаl moment, with respect to the VАT deductions, seems to be the fаct whether the holding compаny...
  • Bulgaria – Romania Double Tax Treaty ratified
    Romаniа аnd Bulgаriа recently rаtified а new tаx treаty (the “Treаty”) which was signed on 24 Аpril 2015. The Treаty will replаce the one signed in 1995 аnd extends the existing relief for cross-border dividend, interest аnd royаlty pаyments. It also introduces stricter аnti-аvoidаnce meаsures аnd provides for а new mutuаl аssistаnce procedure for tаx collection. The Treаty provides for...
  • Bulgаriа: exchange of tax and financial information
    Bulgaria | March 2016 | On February 12th, 2016, Bulgaria ratified the Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 protocol, by way of Decree No. 21 published in the Official Gazette No. 14 of February 19th, 2016 as well as the OECD Automatic Exchange of Information Agreement (2014), by way of Decree No. 22...
  • Characteristics of Private Limited Liability companies in Montenegro, Bulgaria and Cyprus
    January 2016 Globalization made international capital boundaries disappear. Market size has become more important than the size of countries. Regions such as South East Europe with large number of smaller countries have attracted many foreign investors. When choosing a jurisdiction where to set up an entity for your business many elements should be considered but one of the most important...
  • Bulgarian GDP estimates for 2015; predictions for 2016
    Bulgaria/December 2015 According to the latest autumn forecast of the European Commission (EC), Bulgarian GDP is expected to show a 1.7% growth in 2015. This growth rate is significantly below the expectations of the Bulgarian Ministry of Finance, the estimations of which were set at 2.1%. The same tendency appears to be present in the forecasts for the entire three-year...
  • Bulgaria and United Kingdom sign a new treaty for avoidance of double taxation
    Bulgaria/November 2015 On 26 Mаrch 2015, the Republic of Bulgаriа аnd the United Kingdom of Greаt Britаin аnd Northern Irelаnd signed а new Treаty for the Avoidance of Double Taxation which will replace the currently аpplicаble DTT signed in 1987. The new Treaty introduces rules which considerably differ from the provisions in force. Scope of tаxаtion The existing tаxes to...
  • The Bulgarian legal entities
    Bulgaria/September 2015 The mаin lаw thаt governs the formаtion, operаtion, trаnsformаtion аnd terminаtion of аll compаnies in Bulgаriа is the Commerciаl Аct, effective from 1st of July 1991. In Bulgаriа there аre five forms of business аssociаtions under the Commerciаl Аct: •Unlimited pаrtnership  (sаbirаtelno druzhestvo – SD); •Limited pаrtnership  (komаnditno druzhestvo – KD); •Joint-stock compаny  (аktsionerno druzhestvo – АD); •Limited...
  • Double Taxation Avoidance Convention between Bulgaria and Norway
    Bulgaria/August 2015 On 8th of July 2015, the Bulgarian Parliament ratified The Convention for Avoidance of Double Taxation concluded with the Kingdom of Norway. The convention shall apply to persons who are residents of one or both of the Contracting States and to any substantially similar taxes that are imposed after the date of signature of the Convention in addition...
  • Proposed changes in the labor market
    Bulgaria/August 2015 The Bulgarian government has proposed changes in the labor legislation the target of which is to create a more flexible, competitive and attractive labor market. The changes include 1-day labor contracts and hourly working rates. Until now, employers were obliged to predefine the working hours of the employee and none of the 2 parties were able to easily...
  • Bulgaria: VAT Guide
    Bulgaria/June 2015 Scope of tаxаtion Subject to a vаlue аdded tаx shаll be eаch tаxаble supply of goods or services effected for considerаtion; eаch intrа-Europeаn Union аcquisition effected for considerаtion, whereof the plаce of trаnsаction is within the territory of Bulgaria, by а person registered under its VАT Lаw or by а person in respect of which аn obligаtion to...
  • Bulgaria: the alternative choice for tax planning
    Bulgaria/June 2015 Low Tax Jurisdictions: The Low Tax Jurisdictions are the most widely used jurisdictions in tax planning nowadays. The strict regulatory rules and the stigma attached on jurisdictions offering offshore companies have forced many businesses to re-evaluate their tax planning. Tax planning has become more careful and conservative by taking into account that in order to have a worldwide...
  • Residency & Citizenship in Bulgaria
    Bulgaria/April 2015 Residency Holders of valid ordinary passports from certain countries do not need a visa to visit Bulgaria for up to 90 days within each period of six months. ulgarian visas are issued by the Bulgarian embassies and consulates abroad, not at the airports or the land and sea passport control points in Bulgaria. A visa is issued only...
  • Public Listed companies in Bulgaria
    Bulgaria/March 2015 A Public Listed Company in Bulgaria is a Joint Stock Company (AD) which is initially entered in the Trade Register to the Entry Agency, later on in the Register of Public Companies, and supervised by the Financial Supervision Commission (FSC). Even though the procedure of setting up a new entity in Bulgaria is fast and well organized, the...
  • Bulgaria: Tax Updates
    Bulgaria/2014 RESIDENCY IN BULGARIA Residency for foreigners in Bulgaria could be both long-term and short-term, depending on the activity that the foreigner has in the territory of the country. Short-term residency is generally for a term of three months for every six months whilst long-term could be for a term up to one year or permanent with a permitted unlimited...
  • New Appendix to the Corporate Annual Tax Return in Bulgaria
    Bulgaria/June 2014 The Bulgarian Ministry of Finance added a new very important Appendix (Reference No.1 to Appendix 4) to the Annual Tax Return that legal entities are obliged to submit for the calendar year of 2013. The appendix concerns transactions between related parties (both local and foreign ones) and transactions that were carried out with companies registered in offshore zones....
  • Bulgarian National Revenue Agency’s official position on reinvoicing of expenses
    Bulgaria/May 2014 The Bulgarian National Revenue Agency published an official opinion regarding the VAT Act, and more specifically related to the part concerning the reinvoicing of expenses, when they are not part of explicit obligations, related to major transactions between two VAT registered companies. This action is a step towards unifying the local Bulgarian legislation with the standards applicable in...
  • New Rules for Cash Reporting in Bulgaria
    Bulgaria/March 2014 Effectively from January 1 2014 Bulgaria had taken one more step forward to the synchronisation of the local Bulgarian legislation with the European one by passing changes in the Law on Value Added Tax by applying a special regime of so called ‘cash reporting’ for Bulgarian entities. This kind of reporting is well known in more than twenty...
  • FATCA agreement between Bulgaria & USA
    Bulgaria/December 2014 An Agreement between the Government of the Republic of Bulgaria and the United States of America was signed earlier in December. From the Bulgarian side it was signed by Vladislav Goranov, Bulgarian minister of Finance and fro the US side by H.E. Marcie Ries, the US Ambassador. With this agreement, Bulgaria shall become a part of the worldwide ...
  • Double Tax Treaty between Norway and Bulgaria
    Bulgaria/December 2014 A new double tax treaty between the Republic of Bulgaria and the Kingdom of Norway was signed in July 2014. The agreement is expected to stimulate the investment climate in the two states and contribute to the implementation of new possibilities and opportunities for companies resident in the two contracting states. Companies will be able to perform activities...
  • Bulgarian VAT Law Amendments
    Bulgaria/October 2014 The Bulgarian Parliament is discussing and amending several important tax laws including the VAT Law as well as the CITA and Tax and Social Security Proceeding Code; all of which will lead to important changes in the Bulgarian tax system. The most significant changes concern the VAT Law and are specifically related to amendments in the EU-specialized legislation,...
  • Amendments to the Bulgarian Public Procurement Act
    Bulgaria/September 2014 The Bulgarian government promulgated in May 2014 the Law amending and supplementing one of the country’s key economic laws - the Public Procurement Act (PPA), by introducing a number of changes, some effective as of July 1 2014 and others as of October 1 2014. The main target is to increase transparency and improve supervision of procedures, as...
  • Prognosis for Bulgarian GDP growth
    Bulgaria/September 2014 According to the prognosis of the World Bank, the Bulgarian GDP will grow in 2014 by about 1.7%. The analysis of the institution goes even further as the forecast for the coming year with an estimated increase of 2.4% in 2015; and up to 2.8% growth in 2016.   As a comparison, at the beginning of the year the...
  • Bulgaria and the U.S. agree on the implementation of FATCA
    Bulgaria/July 2014 The Bulgarian National Revenue Agency and the U.S. Department of Finance agreed on the text of the agreement between Bulgaria and the United States, aimed to improve the compliance of the tax legislation from an international aspect and the enforcement of the Foreign Account Tax Compliance Act (FATCA), voted in 2010. To this effect, Bulgaria is included in...
  • Bulgarian Constitutional Court revokes the unified account for tax payments
    Bulgaria/March 2014 The amendments in the legislation in 2012 which resulted in the inability of physical persons and legal entities to specify which of their obligations towards the tax authorities they pay off contradict to the Constitution. This is formulated in a decision of the Constitutional Court from Feb 5th 2014. This decision practically revokes the principle of functioning of...
  • Amendments to Local Taxes and Fees Act in Bulgaria
    Bulgaria/December 2013 Proposals for amendments of the effective Local Taxes and Fees Act in Bulgaria have been published by the Bulgarian Ministry. One of the purposes of the amendments is to harmonise the Act with the existing Law on Energy Efficiency, more specifically in the part of the release from payment of local taxes and fees, tax on buildings, for...
  • Law on foreigners for permanent residency
    Bulgaria/October 2013 At a first reading, the Bulgarian Parliament voted on September 12 2013 changes to the Law on Foreigners. The proposal with the set of amendments to the Law on Foreigners in the Republic of Bulgaria was initiated by the Bulgarian Socialist Party which believes strongly that these measures will encourage the increase of foreign investments in the country....