The Committee on Budget and Finance of the National Assembly has approved, at a second reading, a Bill for Amendment and Supplementation of the Tax-Insurance Procedure Code (TIPC). The primary objective of the adopted provisions is to grant tax authorities access to information regarding individuals who utilize crypto-assets, thereby ensuring tax efficiency.

The new legislative changes provide for tax authorities within the European Union, as well as in partner countries, to engage in the mutual exchange of information concerning individuals trading in crypto-assets. To comply with these requirements, companies operating in the crypto-asset sector will be required to register and provide relevant data in one of the member states. In practice, these steps incorporate the requirements of European directives concerning administrative cooperation and the automatic exchange of information for tax purposes into national legislation.

The bill introduces specific obligations for crypto-asset service providers registered and licensed in Bulgaria. They will be required to provide the Executive Director of the National Revenue Agency (NRA) with identification data for each of their users, including:

  • Personal data: full names, address, date and place of birth;
  • Tax information: the member state or partner jurisdiction where the person is a tax resident, and their corresponding tax identification number;
  • Operational data: information on each type of crypto-asset for which the provider has executed transactions, transfers, and exchanges.

During the discussions between the first and second reading, Konstantin Prodanov from "Progressive Bulgaria" submitted a proposal to introduce a three-month period from the date of the law's promulgation. During this time, crypto-asset service providers and financial institutions will be required to fulfill their obligations for customer due diligence. Deputy Minister of Finance Lyudmila Petkova clarified that this amendment is necessary because the European directive has been in effect since January 1 of this year. Without such a transition period, providers would be in violation of the law, which is set to come into force retroactively as of January 1, 2026.

The Committee on Budget and Finance unanimously rejected the proposals in the draft law that would have allowed the Minister of Environment and Water, as well as the directors of the respective Regional Inspectorates of Environment and Water (RIEW), to request the disclosure of social security information. The Chairman of the Budget Committee, Konstantin Prodanov, explained that opinions had been received from the Ministry of Environment and Water (MEW) and the Ministry of Finance. The reasoning provided by the financial ministry stated that there is no current need for MEW representatives to have such authority, which led to the removal of those provisions.

Additionally, the bill includes the introduction of Organisation for Economic Co-operation and Development (OECD) standards regarding transfer pricing, as well as requirements from a European directive for the automatic exchange of information related to the top-up tax for large multinational enterprise groups. During the discussion, Vladislav Goranov from GERB-UDF raised the question of whether it is time for the Ministry of Finance to rewrite the TIPC in its entirety, due to the numerous amendments made over the years. Lyudmila Petkova agreed with the recommendation, noting that the original structure of the TIPC, focused on the functions of the NRA, is being compromised by the provisions regarding information exchange. She added that the possibility of creating a separate law dedicated to the exchange of tax information, which would consolidate all such provisions, is being discussed with the NRA.

At the beginning of the meeting, the committee approved without debate a Bill for Supplementation of the Law on Ratification of the Convention on Mutual Administrative Assistance in Tax Matters, as amended by the Protocol of Amendment, which entered into force on June 1, 2011. The bill was adopted with 18 votes "in favor," and zero "against" or "abstentions." The changes expand the scope of the Convention to include the primary, secondary, and national top-up tax, providing a legal framework for the centralized filing and exchange of information regarding the global minimum tax.