Bulgaria’s crypto regulations are not precise, and crypto is yet to be considered a legal tender in the country. However, the Bulgarian government allows crypto trading, which is liable to taxation for corporate and individual accounts in the country.
In 2014, the Bulgarian National Revenue Agency released a statement outlining the fiscal treatment of crypto for legal entities and private investors. The release closely mirrors the EU crypto regulations.
Other national institutions in Bulgaria, like the Bulgarian Commercial Register, Banks, and others, have also taken their stance on crypto and other crypto-related business in early 2017. Their decisions stem from personal reasons, which are not subjective to state regulations.
For instance, only a few banks allowed individual investors and companies to open crypto-related bank accounts. However, most banks later terminated many crypto-related accounts at the beginning of December 2017.
According to Bulgaria’s First Investment Bank, the termination is partly due to influence from international banks like Commerzbank and JP Morgan Chase’s refusal to accept crypto transactions anymore.
The Bulgarian crypto regulations journey has been full of ups and downs. Although Crypto activities are allowed to take place in the country, the Bulgaria government’s attitude towards cryptocurrency is dormant.
Cypro Tax in Bulgaria
Crypto taxation in Bulgaria is treated the same way as revenue generated from financial assets. The Bulgarian National Revenue Agency conducts taxation, and the process does not separate tax on crypto to fiat or crypto to crypto transactions. Every trading activity is taxable irrespective of the mode of trading. Individuals and companies must report their trading activities in their annual tax returns.
Taxpayers are to file their Annual tax returns in Bulgaria on the 30th of April, the year after the year of profit realization. Crypto tax is calculated by subtracting the whole year’s loss from the entire year’s profit.
Crypto tax rate in Bulgaria
Bulgaria’s individual crypto tax rate differs from the corporate tax rate. Crypto tax on individual portfolios or investments is 10% annually, while the tax rate on corporate investment is pegged at 15% annually.
Requirement for licensing crypto in Bulgaria
In Bulgaria, no license or documentation is required for crypto exchange platforms to operate in the country.
However, suppose a Finance startup or company wants to trade cryptocurrency as part of its financial products or conduct crypto-related services as part of its financial services. In that case, such a company must obtain a license from Bulgaria’s designated institution.
According to the Bulgarian Commission for Financial Supervision and Bulgarian National Bank. Crypto is not yet qualified as electronic money or financial instruments in the country. The Bulgarian government urged its citizens to be careful with crypto activities, most notably due to its high volatility.
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