Implementation of FATCA on national level

The Bulgarian Council of Ministers submitted to the Bulgarian Parliament a proposal to implement the Foreign Account Tax Compliance Act ("FATCA") through changes in the Bulgarian Social Security Code.

The proposed changes will effectively lead to the creation of an automated data sharing system between the Bulgarian and the US internal revenue agencies. The information shall relate to bank accounts held in Bulgarian financial institutions by (i) US citizens, and (ii) foreign entities controlled by taxable persons in the US. The information that must be disclosed includes:

• identifying features of the principal of the bank account, including name, address, tax number and account number;
• available funds in the account; and
• information about the financial institution itself.

In addition to the mandatory-shared information, the proposed amendments also impose well-defined obligations with respect to the procedures which financial institutions should take to determine whether FATCA applies to an account and/or is subject to notification to the Bulgarian tax authorities.

Bulgarian financial institutions should observe the changes and mandatory obligations, and prepare their internal systems and policies for compliance with the new provisions.