Bulgaria: the act on the economic and financial relations with companies registered in preferential tax regime jurisdictions

Alessandro PasutBULGARIA

The act on the economic and financial relations with companies registered in preferential tax regime jurisdictions, the persons related to them and their beneficial owners entered into force on 1 January 2014. Its main goal is to prevent tax avoidance and not to permit the acquiring of public funds and management of financial resources by companies, which are registered in preferential tax regime jurisdictions.

The Act imposes a prohibition for companies, registered in preferential tax regime jurisdictions, and the persons related to them, to be directly or indirectly involved in certain activities. Following the entry into force of the Act, companies registered in preferential tax regime jurisdictions will no longer be able to be shareholders in companies that carry out licensing activity, to participate in privatization, concession or public procurement, to acquire lands and forests from the state forest funds, etc.

The prohibition is applicable to any person related to the companies registered in preferential tax regime jurisdictions as well, i.e. companies that have direct or indirect control over such legal entities, as well as their subsidiaries.

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