Bulgaria: FATCA agreement between Bulgaria and the US
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Bulgaria: FATCA agreement between Bulgaria and the US

koleva.jpg

Rossitza Koleva

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, for the US side, by H.E. Marcie Ries, the US Ambassador. With this agreement, Bulgaria shall become a part of the worldwide exchange of information in compliance with the the Foreign Account Tax Compliance Act ( FATCA). FATCA was voted and passed by the US Congress in 2010 and it is a tool for the Internal Revenue Service (IRS) to control and prevent cross-border tax evasion from citizens of the US through off-shore accounts and with financial assets abroad.

It is recommended that Bulgarian taxable persons analyse their FATCA status to verify whether they belong to the category of the so-called intergovernmental agreements (IGA). The IGAs form the framework between the relevant country's government and the US about the implementation of the rules that will be set up. The IGAs are of two types: according to the first type (Model 1 IGA), institutions report to their governments, and then, the respective governments hand over that information to the IRS, while under the second type (Model 2 IGA) the institutions report directly to the IRS on their clients. If the result of the analysis shows that a certain institution belongs to the category of a reporting Bulgarian financial institution, then the entity should undertake the following measures: register with the IRS system before January 1 2015, review its client list in order to identify financial accounts of US persons and entities that are controlled by US persons, and submit annual reports according to the instructions in the relevant IGA.

It is more than evident that the signed agreement between the governments of Bulgaria and the US will certainly have a positive role with the valuable contribution of enhancing the international banking business and, of course, tax transparency, as well as helping to prevent and effectively fight tax evasion.

Rossitza Koleva (rossitza.koleva@eurofast.eu)

Eurofast Global, Sofia office

Tel: +359 2 988 69 78

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
HSBC has settled a claim originally worth £240m relating to a failed film tax relief scheme without admitting liability or wrongdoing
Their prediction comes after the IRS announced it would send compliance letters to large foreign companies emphasising their US tax obligations
Gift this article