On 13.08.2019 the State Gazette published amendments to Tax-Insurance Procedure Code regarding the implementation of the mandatory transfer pricing documentation.

For the purposes of transfer pricing, the scope of Paragraph 1, item 3, point (f) of the Additional Provisions is limited, as companies or persons holding more than 25% of the voting shares are considered as related persons (and not companies or persons holding more than 5% as it is provided regarding all other provisions of Tax Insurance Procedure Code).

Also, for the purposes of transfer pricing provisions, non-personified companies are treated as corporate bodies.


Who are the persons obliged to prepare transfer pricing documentation?

  1. Local corporate bodies
  2. Foreign corporate bodies engaged in economic activity in the Republic of Bulgaria through a place of economic activity
  3. Sole entrepreneur


Exceptions are provided for the following groups of persons:

  1. Persons exempt from taxation with corporate tax;
  2. Persons who carry our activity subject to taxation with alternative tax under Tax-Insurance Procedure Code;
  3. Persons who do not carry out controlled transactions or who carry out controlled transactions only in Bulgaria;
  4. Persons not exceeding the following indicators as at 31 December of the previous year:

–  assets with balance-sheet value at the amount of BGN 38,000,000, and

– net sales income – BGN 76 million, or

– average number of staff for the reporting period – 250 people


Where mandatory transfer pricing documentation is required, a local file and a summary file should be prepared. The local file should be prepared by the local enterprise, and the summary file should be prepared by the ultimate parent or another enterprise in the group.


The local file should be prepared by 31.03. of the year following the year in which controlled transactions are carried out.


The liable person must have a summary file of the ultimate parent for the tax year in which the controlled transactions are concluded, not later than 12 months from the deadline for drafting the local file.


The local and the summary files should be updated annually.


In case of non-fulfillment of the obligation to prepare a local file, a property sanction is provided inTax-Insurance Procedure Codeof up to 0.5 % of the total value of the transactions, for which the documentation had to be prepared.

A person who does not have a summary files, when obliged to do so, can be punished with a property sanction in the amount of 5000 to 10,000 BGN.

In the case of repeated violation a pecuniary sanction in double amount is envisaged to impose.