January 20 2022

Bulgaria Plans to Amend Corporate Income Tax Act and Implement Hybrid Mismatch Rules

Source: IBFD Tax Research Platform News

The Bulgarian parliament has approved at first reading the following amendments to the Corporate Income Tax Act:

  • implementation of the rules for hybrid mismatches provided in the Anti-Tax Avoidance Directive (2016/1164) (ATAD);
  • extension of the scope of application of the provisions for controlled foreign companies (CFCs) which will be applied to all Bulgarian taxable persons that are subject to corporate income tax in the country and have CFCs regardless of their form of taxation; and
  • clarification of the tax aspects of lease buy-back agreements, which are classified as operating leases under the International Accounting Standards.

As a next step, the proposal will be voted at second and final reading by the parliament.

The full text of the proposal, approved on 20 January 2021, is available here (in Bulgarian only).