All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Bulgaria: Bulgaria and the US agree on FATCA implementation

koleva.jpg

Rossitza Koleva

The Bulgarian National Revenue Agency and the US Department of Finance agreed on the text of the agreement between Bulgaria and the US, aimed at improving 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 the list of countries the US is having a FATCA agreement in force with. FATCA obliges all foreign financial institutions (FFIs) to provide information to the International Revenue Service (IRS) related to those financial accounts which belong to US taxpayers or foreign companies that are controlled by US taxpayers (with more than 10% direct or indirect participation). FFIs that do not participate in FATCA will be subject to 30% withholding tax in the US, which will make their operations on the US markets extremely difficult. Thus, US taxpayers who own financial assets abroad must declare them in the IRS and for this purpose FATCA introduces a regime according to which the FFIs can choose either to assist IRS (participating) or not (non-participating).

One of the essential obligations of the participating financial institutions is to register and receive a special identification number (GIIN). The registration may be done exclusively online via a safe, web -based system maintained by the IRS. The address for registration is www.irs.gov/fatca-registration.

The deadline for the registration of financial institutions located in countries which have signed the Model 1 agreement, Bulgaria being among them, has been prolonged until January 1 2015. Until that date, the financial institutions are not required to specify the GIIN and will not be subject to 30% withholding tax in the US. By the beginning of June, the IRS is expected to announce the list of the participating financial institutions which will be updated on monthly basis.

Rossitza Koleva (rossitza.koleva@eurofast.eu)

Eurofast Global, Sofia Office

Tel: +359 2 988 69 78

Website: www.eurofast.eu

More from across our site

The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
Businesses must ensure any alternative benchmark rate is included in their TP studies and approved by tax authorities, as Libor for the US ends in exactly a year.
Tax directors warn that a lack of adequate planning for VAT rule changes could leave businesses exposed to regulatory errors and costly fines.
Tax professionals have urged suppliers of goods from Great Britain to Northern Ireland to pause any plans to restructure their supply chains following the NI Protocol Bill.
Tax leaders say communication with peers is important for risk management, especially on how to approach regional authorities.
Advances in compliance tools in international markets and the digitalisation of global tax administrations are increasing in-house demand for technologists.
The US fast-food company has agreed to pay €1.25 billion to settle the French investigation into its transfer pricing arrangements over allegations of tax evasion.
HM Revenue and Customs said the UK pillar two legislation will be delayed until at least December 2023, while ITR reported on a secret Netflix settlement and an IMF study on VAT cuts.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree