Mandatory transfer pricing documentation
Recent amendments in the Bulgarian Tax and Social Security Procedure Code (TSSPC), promulgated in the State Gazette in August 2019, provide for mandatory preparation of transfer pricing documentation, justifying the arm’s-length nature of related-party transactions.
Bulgarian entities, as well as foreign entities acting through permanent establishments (PEs) in Bulgaria, which participate in cross-border related-party transactions and meet certain criteria (exceed certain thresholds), will be required to prepare transfer pricing documentation.
The transfer pricing documentation shall comprise a Local file and a Group Master file (if the company is part of a multinational group). The contents of the documentation are explicitly listed in the TSSPC.
The first year for which a Local file should be available is 2020 (i.e. the documentation should be prepared by 31 March 2021).