Bulgaria to Investigate Crypto Trading Companies

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Bulgaria to Investigate Crypto Trading Companies

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The Bulgarian government has announced plans to investigate the operations of crypto-selling entities operating within the country, according to local news outlet Novinite.

While normally, the objective of such investigation is to locate any fraudulent activities, the objective of the current inspection will involve assuring that these companies are complying with tax and social security regulation of the country. The government is taking this step after following the common notion that cryptocurrencies are used for revenue concealment and tax evasion across the world.

The Bulgarian National Revenue Agency (NRA) will be the responsible body looking into the operations of these companies which will mostly involve cryptocurrency exchanges and P2P trading websites. The agency has already assigned “control actions” or checks to nine platforms.

The NRA will use the information from the audit of these companies to see whether or not the users involved in trading on these exchanges have filed for the income obtained on these platforms. In Bulgarian jurisdiction, the sale of cryptocurrency investments is supposed to be declared in annual tax returns with the overall profit taxed up to 10% under the existing Corporate Income Tax Act.

While the tax rate is considerably lower than other European countries and even USA itself, the agency may have reason to believe that some individuals or companies could be using these platforms to hide their income from the authorities.

Cryptocurrency taxation is a heavily debated-topic around the world with Bulgaria being no exception. However, given the lower tax rate, the government feels that it is justified in pursuing cases against any possible offenders in the sector.


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