site.btaParliament Supplements Act Ratifying OECD Convention on Mutual Administrative Assistance in Tax Matters

The National Assembly Thursday adopted on first and second reading a bill supplementing the Act Ratifying the Convention on Mutual Administrative Assistance in Tax Matters. The Convention is a multilateral agreement developed jointly by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe; Bulgaria signed it in 2015.

Deputy Finance Minister Lyudmila Petkova explained that the bill aims to update the list of taxes in Annex A of the Convention (Taxes to Which the Convention Would Apply) with three taxes: primary surtax, secondary surtax, and national surtax, thereby implementing the global minimum tax in national law. In her words, the inclusion of these taxes will provide Bulgaria with the necessary legal basis to implement mechanisms for international administrative cooperation and the exchange of tax information, namely: automatic exchange of information, exchange of information upon request, spontaneous exchange, simultaneous audits, participation in foreign audits, debt collection, and others.

This is necessary in view of the exchange of information between tax administrations, including the exchange of centralized information following Bulgaria’s accession to the multilateral agreement among competent authorities for the exchange of information under the applicable OECD global rules against base erosion. Once the law enters into force, Bulgaria must notify the OECD, Petkova explained.

The reasoning for the bill reads that Bulgaria has incorporated the global minimum tax rules into the Corporate Income Tax Act, Part 5A (Taxation of Multinational and Large Domestic Groups of Enterprises with an Additional Tax and a National Additional Tax), through a primary surtax, a secondary surtax, and a national surtax. The taxes have been in effect since January 1, 2024 and January 1, 2025, respectively.