BULGARIA Law and Practice Contributed by: Todor Banchev Todorov and Victoriya Grishina, Banchev and Grishina Law Firm
9. Dispute Prevention 9.1 Advance Pricing Agreements
8.2 Application Deadlines In Bulgaria, a request for a mutual agreement proce - dure (MAP) must generally be submitted within three years from the first notification of the action resulting in taxation not in accordance with the applicable tax treaty, in line with the OECD Model Tax Convention and the provisions of most Bulgarian double tax trea - ties. For disputes falling within the scope of the EU Tax Dispute Resolution Directive, the same three-year deadline applies, calculated from the receipt of the first formal notice of the disputed tax measure. 8.3 Mandatory Binding Arbitration Mandatory binding arbitration is available in Bulgaria primarily within the EU context. It applies under the EU Arbitration Convention (for transfer pricing and permanent establishment disputes) and the EU Tax Dispute Resolution Directive, where arbitration may be initiated if the mutual agreement procedure does not resolve the dispute within the prescribed timeframe. Outside the EU framework, mandatory binding arbitra - tion is not generally available. Bulgaria has not adopt - ed a broad arbitration mechanism under its bilateral tax treaties and has not opted into mandatory arbi - tration under the OECD Multilateral Instrument (MLI). As a result, arbitration in non-EU cases depends on the specific provisions of the relevant tax treaty and remains relatively limited in practice.
Bulgaria does not have a formal advance pric - ing agreement (APA) programme established under domestic law. As a result, taxpayers cannot obtain binding unilateral, bilateral or multilateral APAs from the Bulgarian tax authorities. Some tax certainty may instead be sought through informal pre-filing discussions, general interpretative guidance of the National Revenue Agency, or through mutual agreement procedures (MAP) under applicable tax treaties, particularly in cross-border transfer pric - ing disputes. 9.2 Other Mechanisms Bulgaria does not operate a formal co-operative com - pliance or enhanced engagement programme for inter - national tax matters. However, taxpayers may seek individual written tax rulings or interpretative opinions from the National Revenue Agency, which, while not generally binding on third parties, provide practical guidance and a degree of comfort if the facts are fully and accurately disclosed. In cross-border contexts, additional certainty may be achieved through mutual agreement procedures (MAP) under applicable tax treaties and EU dispute resolution mechanisms. In practice, tax certainty in Bulgaria remains largely ex post, achieved through audits and litigation rather than advance clearance mechanisms.
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