National revenue agency is launching inspections of the cryptocurrency traders

The National Revenue Agency (NRA) is launching inspections of companies whose subject-matter is the sale of cryptocurrencies. The objective is to establish whether companies and their clients comply with tax and social security legislation. Tax inspectors will also investigate the principle of operating platforms for the purchase and sale of such assets. Since transactions related to trading with virtual currencies are anonymous, there is a real risk of revenue concealment and tax evasion.

The Agency has conducted a survey of Bulgarian companies trading with cryptocurrency through web sites and has already initiated control actions against 9 such companies. The information gathered as a result of the inspections will be carefully analyzed and on this basis it will be ascertained whether the companies involved in the trading of cryptocurrency have declared the income of the transactions with such assets.

Natural persons’ incomes from a sale or exchange of virtual currency are declared with the annual tax return and tax on the total annual tax base (10%) is due. For the purpose of tax treatment, income from the sale of the currency is treated as income from the sale of a financial asset. The profits that commercial companies make from this type of activity are also subject to taxation under the Corporate Income Tax Act.

The deadline for filing the annual tax returns for the income of natural persons acquired in 2019 expires on 30 April. Within the same time limit, the due tax is payable. The deadline for companies to file annual corporate tax declarations is 31 March 2019.