Bulgarian Tax Authority to Inspect Crypto Exchanges and Traders
The National Revenue Agency of Bulgaria is preparing to conduct inspections on cryptocurrency trading platforms and their customers. The authority wants to make sure that both are fulfilling their obligations under the country’s tax and social security laws.
The tax service plans to investigate companies that have declared the
trading of digital assets as their core business activity, Bulgarian media reported quoting an official announcement. It also wants to find out more about how these platforms operate.
The main concern is that the transactions related to the
exchange of virtual currencies are anonymous. This, according to the regulator, comes with risks of revenue concealment and tax evasion.
The National Revenue Agency (NRA) has already conducted a study of the Bulgarian entities working in the sector. The tax authority said it has assigned “control actions” in regards to nine companies.
Once the checks are completed, tax officials will analyze the data gathered for the users of these platforms. The main task is to determine whether these taxpayers have reported their income from cryptocurrency transactions.
In Bulgaria, profits from crypto trading are treated as income from the sale of financial assets. Private individuals are expected to declare these revenues on their annual tax returns. A flat income tax rate of 10 percent is applied to the positive balance from these transactions in fiat currency.
Profits earned by businesses are subject to taxation under the Corporate Income Tax Act, with the same tax rate. Bulgarian residents are obliged to file their tax declarations and pay their taxes for the previous year by April 30. Annual corporate tax returns should be submitted by March 31, 2019.