Bulgaria, Romania to update double taxation agreement

Bulgaria, Romania to update double taxation agreement

 

By Clive Leviev-Sawyer of the Sofia Globe

Bulgaria’s Cabinet has approved a draft proposal to update the memorandum on avoiding double taxation with Romania, replacing the current agreement signed in 1994, and mandated Finance Minister Petar Chobanov to negotiate and sign the new deal.

The issue was first discussed during a joint meeting of the Bulgarian and Romanian governments in November 2013, co-chaired by Romanian prime minister Victor Ponta and his Bulgarian counterpart Plamen Oresharski.

The current agreement on avoiding double taxation and preventing tax evasion was signed “under different economic conditions and legal regulations in the area of taxation,” the Bulgarian Government’s media service said in a statement.

“This makes it an inefficient instrument to deal with cases in the domain of international double taxation and does not create sufficient stimulus for bilateral economic and investment co-operation between the two countries,” the statement said.

The new agreement, in line with the guidelines of the Organisation for Economic Co-operation and Development, will apply an entirely new model of distributing the tax burden, which will help improve bilateral relations, stimulate economic co-operation and investment, the Government’s press service said, without giving further details.

(Bulgarian Finance Minister Petar Chobanov. Photo: minfin.bg)