Bulgaria Requires CbC Reports By Year End

Bulgaria has said that multinationals covered by the country’s new transfer pricing country-by-country reporting regime should submit their first report by December 31, 2017.

Through Order 3LIY-1410, Bulgaria’s National Revenue Agency has newly set out the rules concerning country-by-country documentation, including who the reporting obligations apply to and how to submit the relevant documentation.

In August 2017, the Government enacted into law a new CbC reporting requirement to implement the OECD’s recommendations under Action 13 of the base erosion and profit shifting project. CbC reporting requires multinational enterprises to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.

According to the Order, the first CbC report, for a fiscal year starting on January 1, 2016, and ending on December 31, 2016, must be submitted by December 31, 2017.

These dates apply if the report is being submitted by the ultimate parent entity of the multinational group resident for tax purposes in Bulgaria, required if its income as reported in financial statements exceeds BGN100m (USD59.6m) on a consolidated basis. Reporting starts a year later if the report is to be submitted by a Bulgaria-resident constituent entity of a multinational group, for which CbC documentation is required if group revenues on a consolidated basis exceed the local currency equivalent of EUR750m, about BGN1.46bn.

It is expected that taxpayers will be able to begin submitting the required documentation from December 1, 2017.