An intergovernmental agreement (IGA) for the implementation of the Foreign Account Tax Compliance Act (FATCA) requirements was signed between Bulgaria and the United States on December 9, 2014. Bulgaria has formally signed up to the US FATCA rules just over six months after the two countries concluded a transitional “in substance” agreement.
The US and Bulgaria reached an “in substance” agreement in April 2014, under which the US temporarily regarded Bulgaria as complying with the FATCA provisions, pending the completion of final preparations in Bulgaria. Countries that entered “in substance” agreements with the USA before July 1, 2014, were given until the end of December to sign a formal intergovernmental agreement (IGA). This agreement has now been successfully concluded and signed by the two countries.
Under the agreement, Foreign Financial Institutions (FFIs) in Bulgaria will report the information required under FATCA on accounts of US citizens or entities to the Bulgaria Government, which in turn will report the information to the IRS. This agreement is reciprocal, meaning that the United States will also provide similar tax information to the Bulgaria Government regarding individuals and entities from Bulgaria with accounts in the United States.
