Bulgaria stands its ground in tax dispute with Greece

Bulgaria and Greece have presented their cases to the European Commission in a tax dispute case threatening to strain cross-border transactions between the two neighbours, which the Commission is expected to rule on in August.

Authorities in Sofia object to Greek plans to levy a 26 per cent tax on all transactions carried out by Greek companies with firms in countries with “preferential tax regimes”, which is defined as countries with lower corporate tax rates than Greece.

Greece’s list includes three EU member states – Bulgaria, Cyprus and Ireland – and Bulgaria’s Finance Ministry has argued that the Greek tax rules breached EU’s internal market rules, including the principle of free movement of capital.

Under the new Greek rules, the tax would be charged up-front and companies will have three months to obtain a rebate by proving that the transaction was a routine commercial operation, rather than a deal meant to avoid paying taxes in Greece.

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(Photo: Darren Shaw/sxc.hu)

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