Bulgaria has one of the most stable tax environments in Europe. The government has maintained low rates and simple regimes. The corporate and income tax rates remain unchanged at the flat rate of 10% with no planned changes for 2013."The revenue is stable ...
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Bulgaria has one of the most stable tax environments in Europe. The government has maintained low rates and simple regimes. The corporate and income tax rates remain unchanged at the flat rate of 10% with no planned changes for 2013.
"The revenue is stable in Bulgaria so the government decided not to increase the rates but to invest in measures for compliance," said Georgi Sarakostov, a Deloitte partner.
Unlike many European jurisdictions, taxpayers do not have to file transfer pricing documentation. "We see some stable increase in activity and interest but do not have a major problem with the authority on this area. This is one of the areas that Bulgaria approaches relatively adequately," adds Sarakostov.
One area of transfer pricing that is being discussed at government level is advance pricing agreements (APA). Tax professionals say there is a lack of legal certainty as APAs are not available at the moment. Another subject of live debate is the lack of binding tax rulings.
The Ministry of Finance is also reviewing VAT relief for company cars. A change to allow recovery of VAT is expected to take effect in 2013. "We do not have the administrative sources to assess what is for private or business use so there is no recovery of VAT."
Bulgaria's double tax treaties have also undergone procedural changes. The VAT reimbursement procedure has been shortened by half and is now a three month process. "This is important for business because it is an important area of cash flow for businesses," said Gugushev.
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