On 6 December 2019, Law on Amendments to the Corporate Income Tax Act was published in the Official Gazette and it was adopted by the National Assembly on 21^st November 2019. Similar amendments in Controlled Foreign Company (CFC) and transfer pricing documentation measures were also included in the Law on Amendment and Supplementation of the Tax and Social Insurance Procedure Code published in 13 August 2019. The law shall enter into force on January 1, 2020. It regulates several changes in the Law:

Transfer Pricing Documentation

In accordance with the Law, as of tax year 2020, mandatory transfer pricing documentation is required, which consists of a master file and a local file. Companies who have not more than BGN 38 million of net book value of assets and net sales is below BGN 76 million up to 31 December of the previous year and in addition, they have 250 average employees during the reporting period will be exempted from the requirement to prepare transfer pricing documentation given that at least two of the conditions meet.

Hybrid Mismatches

Under the Law, hybrid mismatch measures in line with ATAD2 to address deduction without inclusion mismatches and double deduction mismatches was introduced. This Law also implements the exit tax measures of the EU Anti-Tax Avoidance Directive (ATAD1) and identifies the eligible persons to whom these rules apply.

Controlled Foreign Company

According to this Law, controlled foreign company (CFC) rules was amended and specifies the conditions for determining the persons to whom these rules apply.

VAT

The Law implements measures to comply with certain EU VAT rules and measures to reduce certain administrative burdens.