Bulgarian Revenue Agency to audit cryptocurrency companies

January 15, 2019
Chris Wheal

Bulgaria’s relationship with cryptocurrency is complicated. The National Revenue Agency (NRA) is to begin inspecting cryptocurrency companies with the goal of finding out if crypto users are actually following the country’s tax laws.

According to the NRA, their primary concern lies in the anonymity of the digital transactions, since this means there can be the potential for fraud with the possibility of not paying taxes. The NRA has already investigated and given control action to nine Bulgarian companies, specifically the ones that offer their clients the option to buy and sell cryptocurrency.

After the initial investigations of the Bulgarian businesses and companies offering cryptocurrency are finished, the information collected from these Bulgarian cryptocurrency companies will be analyzed so tax authorities can figure out if social security and tax laws have been followed.

Bitcoin and other cryptocurrencies aren’t considered as currency or money by the Bulgarian government. In May 2017, Bitcoin accounts created in Bulgaria were banned by the Bulgarian banks, and the local law enforcement raided and seized more than 213,000 in Bitcoin, which at that time was valued at over 500 million USD.

Furthermore, the Bulgarian government has implemented a 10 percent tax, called “Bitcoin Tax,” meaning that Bulgarians are taxed on their profits made from cryptocurrency.

Additionally, Bulgaria has the Corporate Income Tax Act, and the NRA wants to make sure that the Bulgarian crypto companies are aware their profits from cryptocurrency can be taxed. Moreover, the NRA wants to make sure that the cryptocurrency users are including their crypto purchases and income in their tax returns so they can be taxed on their appropriate and accurate total annual tax base of 10 percent.

At the time of this writing, Bulgaria has 31 Bitcoin exchanges and three cryptocurrency ATMs.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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