On 5 June 2019, the parliament voted at first reading amendments to the Tax and Social Security Procedure Code, as follows:
- the introduction of mandatory transfer pricing documentation requirements; and
- implementation of the EU Tax Dispute Resolution Directive (2017/1852) of 10 October 2017 on tax dispute resolution mechanisms in the European Union.
As regards the introduction of mandatory transfer pricing documentation requirements, the following changes were made to the initial proposal of the Ministry of Finance of 5 November 2018:
- the threshold for preparing mandatory transfer pricing documentation on loan transactions has been lowered to amounts of BGN 1 million (BGN 2 million in the initial proposal) or interest payments exceeding BGN 50,000 (BGN 100,000 suggested initially);
- the thresholds for a number of different transactions (e.g. goods, services, intangibles, loans) will be determined for each controlled transaction; only in specific cases, the transactions will be bundled (the initial proposal suggested that thresholds be calculated for each category of transaction with all related parties); and
- the first period for which transfer pricing documentation must be prepared will be 2020 (the initial proposal suggested that the first period be 2019).
As a next step, the proposal must be voted by parliament at second reading. Further developments will be reported when they occur.