Transfer pricing in Bulgaria at a glance
|Are there specific transfer pricing regulations?||Yes|
|Submission deadline upon request||14 days|
|Annual update required||No|
|Official language requirements||Bulgarian|
|Potential impact of penalties||EUR 128 to EUR 256|
Bulgarian tax law
Rules for transfer pricing in Bulgaria are based upon:
- Corporate Income Tax Act
- Ordinance H-9/14 August 2006 on the procedure for application on transfer pricing methods
Rules for transfer pricing in Bulgaria generally follow the OECD Transfer Pricing Guidelines.
Accepted methods are:
- the comparable uncontrolled price (CUP) method;
- the resale price method;
- the cost plus method;
- the profit split method, and
- the transactional net margin method (TNMM).
Priority of methods
The CUP method is the preferred method together with the other traditional methods. When the traditional methods can’t be used the transactional methods can be applied.
Rules for transfer pricing in Bulgaria do not provide specific transfer pricing documentation requirements. Generally, the OECD requirements are to be followed.
Documentation should be submitted in Bulgarian.
Requirements to prepare documentation annually
There is no requirement to prepare the documentation annually.
Submission deadline upon request by tax authorities
Rules for transfer pricing in Bulgaria only provide for a deadline to submit documentation when the request is made during the course of a tax audit. In such case the documentation should be submitted within 14 days after a request has been made. This period could be longer is specifically mentioned by the tax authorities.
Advanced Pricing Agreements
Rules for transfer pricing in Bulgaria do not provide for an option to obtain for an Advanced Pricing Agreement.
Rules for transfer pricing in Bulgaria provide for penalties if a taxpayer fails to comply with the documentation requirements. This penalty will be between EUR 128 and EUR 256.