Bulgaria’s Ministry of Finance signed a country-by-country (CbC) exchange agreement with the US on 30 May, 2024.

The automatic exchange of CbC reports will enhance international tax transparency and aid tax administrations in targeting resources to identify, monitor, and address high-risk cases of tax evasion by large multinationals.

The agreement was signed by Lyudmila Petkova, Deputy Prime Minister and Minister of Finance, Bulgaria, and HE Kenneth Merten, the Ambassador of the United States of America to Bulgaria.

“Administrative cooperation is an effective tool to counter tax avoidance and only a coordinated effort of countries around the world can achieve this goal. The conclusion of the agreement for exchanging country-by-country reports between the Republic of Bulgaria and the United States of America is another important step in this direction. This agreement is long-awaited by business representatives as it will result in reducing the administrative burden and will create an anxiety-free and predictable business environment”, said Petkova.

“Thanks to the agreement, our country will be receiving information about the revenues, activities, assets and taxes of the major US multinational groups operating in our country. The obligation for the local subsidiaries of these groups to file country-by-country reports under the Tax and Social Security Procedural Code will also be abolished, as this information will be exchanged on a reciprocal basis between the two countries,” she added.

Bulgaria and the USA are honoring their commitments under the Organisation for Economic Co-operation and Development (OECD) and the G20 Plan to combat base erosion and profit shifting through this agreement.