Common Reporting Standard or (CRS) in Bulgaria

Starting in 2012, political interest has increasingly focussed on the opportunities provided by automatic exchange of information. Automatic exchange of information involves the systematic and periodic transmission of “bulk” taxpayer information by the source country to the residence country concerning various categories of income (e.g. dividends, interest, etc.).

On February 2014, upon an initiative of the Organization for Economic Cooperation and Development (OECD) the G20 Finance Ministers endorsed the Common Reporting Standard for automatic exchange of tax information, shortly known as Common Reporting Standard or “CRS”. The Standard calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis.

On May 2014, OECD Declaration on Automatic Exchange of Information in Tax Matters was endorsed by all 34 member countries along with several non-member countries. More than 65 jurisdictions publicly committed to implementation, with more than 40 having committed to a specific and ambitious timetable leading to the first automatic information exchanges in 2017. Between these so called “early adopters” was Bulgaria.

On 29 October 2014, 51 jurisdictions, 39 of which were represented at ministerial level, signed a multilateral competent authority agreement to automatically exchange information based on Article 6 of the Multilateral Convention. Subsequent signatures of the agreement, including a signing ceremony in the margins of the OECD Ministerial meeting (June 2015), brings the total number of jurisdictions to 61.

Despite Bulgaria was among those countries, that committed to implement CRS starting from January 2016, latter have never signed the multilateral competent authority agreement. Thus, the time-frame for implementation of CRS in Bulgaria remains unclear. One thing is for sure – even with all political effort in hand, to adopt the reporting standard in the internal legislation, following the constitutional procedure it will take at least two to tree years for Bulgaria to implement CRS. Such political will however is more than questionable, having in mind the fragmentation of the Bulgarian parliament. The incapability of the Bulgarian Revenue Agency to adopt and implement such complex administrative procedure, makes the unlimited delay for CRS implementation in Bulgaria the most likely scenario.

Comments

Comments powered by Disqus