BULGARIA Trends and Developments Contributed by: Todor Banchev Todorov and Victoriya Grishina, Banchev and Grishina Law Firm
Introduction of SAF-T Reporting in Bulgaria The adoption of a Standard Audit File for Tax (SAF-T) reporting regime marks a structural transformation in Bulgaria’s tax control architecture. Introduced through amendments to the Tax and Social Security Procedure Code in March 2025 and with administrative ordinanc - es, mandatory SAF-T reporting will apply from 2026 for large enterprises, with phased extension to other taxpayers through 2030. SAF-T requires periodic submission of detailed, machine-readable accounting and transactional data. This includes granular information on sales and purchase invoices, payments, accounting entries and other operational data. The reform significantly expands the NRA’s capacity for automated cross- checks, anomaly detection and real-time data analyt - ics. The shift from reactive, document-based audits to data-driven, pre-emptive control mechanisms alters the risk profile for taxpayers. Discrepancies between VAT declarations, accounting ledgers, transfer pricing documentation and logistics records can be identi - fied more rapidly and systematically. The likelihood of earlier audit initiation and of formal reassessment procedures increases correspondingly. Importantly, SAF-T does not operate in isolation. It forms part of an integrated compliance ecosystem that includes euro-transition oversight, fiscal control over high-risk goods and enhanced transfer pricing regulation. Data consistency across multiple regula - tory layers becomes a central compliance imperative. In this environment, audit defence strategies require earlier engagement. Proactive data reconciliation, internal control testing and scenario planning become critical to mitigating exposure. Procedural manage - ment during audits, including challenges to evidentiary standards and proportionality of information requests, will likely become more prominent as digital enforce - ment intensifies. New Transfer Pricing Ordinance A new Transfer Pricing Ordinance (Ordinance No H-3), superseding the 2006 framework and bringing national regulations in line with the most recent OECD
Transfer Pricing Guidelines, has been enacted in Bul - garia since 1 January 2026. The reform represents a comprehensive methodological modernisation of the transfer pricing regime. The Ordinance introduces structured rules for accu - rate delineation of controlled transactions, empha - sising economic substance over contractual form. It formalises detailed functional and risk analysis and reinforces the requirement to apply the most appro - priate transfer pricing method based on case-specific facts. While the reform enhances clarity and alignment with international standards, it also increases audit scru - tiny. The emphasis on substance and comparability analysis reduces tolerance for formalistic documenta - tion unsupported by operational reality. The availability of SAF-T data further strengthens the NRA’s capacity to test the consistency of accounting outcomes, intra- group pricing policies and VAT treatment. Transfer pricing reviews are therefore likely to become more technically sophisticated and data-intensive. Inconsistencies between financial statements, VAT reporting and intercompany agreements may serve as entry points for broader reassessments. Businesses engaged in cross-border transactions should reassess transfer pricing models, update documentation frameworks and ensure alignment between operational structures and pricing policies. From a dispute perspective, early preparation of robust comparability analyses and clear articulation of economic rationale become essential components of audit defence. Implementation of the 15% Global Minimum Tax As of 1 January 2024, Bulgaria has enacted the EU global minimum tax regime under Directive (EU) 2022/2523. This regime imposes a 15% minimum effective corporate tax rate on large multinational and domestic groups, regardless of Bulgaria’s 10% statu - tory corporate income tax rate. Applicable to groups with consolidated annual rev - enue of at least EUR750 million in at least two of the last four fiscal years, the regime operates through the
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