{"id":64002,"date":"2025-06-30T09:49:05","date_gmt":"2025-06-30T07:49:05","guid":{"rendered":"https:\/\/bakertillysee.com\/?p=64002"},"modified":"2025-06-30T09:49:05","modified_gmt":"2025-06-30T07:49:05","slug":"local-specifics-related-to-the-interpretation-of-transfer-pricing-rules-in-bulgaria-in-the-light-of-oecd-transfer-pricing-guidelines","status":"publish","type":"post","link":"https:\/\/bakertillysee.com\/bg\/insights\/local-specifics-related-to-the-interpretation-of-transfer-pricing-rules-in-bulgaria-in-the-light-of-oecd-transfer-pricing-guidelines\/","title":{"rendered":"Local specifics related to the interpretation of transfer pricing rules in Bulgaria in the light of OECD Transfer Pricing Guidelines"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8220;&#8220;]Transfer pricing is an important aspect of global commercial relationships that directly impacts the profitability and tax obligations of multinational businesses. A key concept in the international taxation is the arm&#8217;s length principle defined in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Generally, it states that transactions between related parties should be performed as if they were occurring between independent parties in order to ensure the proper application of market conditions at the level of intragroup relationships and to prevent tax avoidance.<\/p>\n<p>Although OECD Transfer Pricing Guidelines are widely accepted as a guidance and an interpretative tool of the TP rules in many countries, the tax authorities and courts in Bulgaria remain reserved. Unlike OECD Model Tax Convention on Income and Capital officially recognized on local level under Vienna Convention on the Law of Treaties, the application of TP Guidelines for interpretation purposes is still disputable due to lack of references in the local tax legislation and the fact that Bulgaria is not OECD member yet.<\/p>\n<p>In light of the above, the OECD TP Guidelines is often perceived by Bulgarian courts (including the Supreme Administrative Court) only as indicative guidance without binding force for the local tax administration. Preference is given to the local Ordinance H-9\/2006 on the manner and procedure for application of the methods for establishment of market prices (Ordinance H-9\/2006) and sometimes to the Transfer Pricing Manual of the Bulgarian National Revenue Agency.<\/p>\n<p>Nevertheless, the OECD clarifications regarding the arm&#8217;s length principle and main tax avoidance hypothesis are often taken into account in the judgements of the Bulgarian courts. For instance, based on the Guidelines local case law determines tax avoidance as an unlawful behavior of the participants involved in a controlled transaction, aimed at reducing or avoiding tax debt or obtaining a tax advantage over other independent taxpayers.<\/p>\n<p>In a conclusion, Bulgaria is an OECD candidate as of 2022 and its accession shall be finalized by 2026. It is expected that the future membership will eliminate uncertainties about the application of OECD TP Guidelines as an interpretative tool of the local TP legislative framework.[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text css=&#8220;&#8220;]Transfer pricing is an important aspect of global commercial relationships that directly impacts the profitability and tax obligations of multinational businesses. A key concept in the international taxation is the arm&#8217;s length principle defined in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Generally, it states that transactions between related parties&hellip;<\/p>\n","protected":false},"author":7,"featured_media":64003,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"episode_type":"","audio_file":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","date_recorded":"","explicit":"","block":"","filesize_raw":"","footnotes":""},"categories":[719],"tags":[],"class_list":["post-64002","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-bg","category-719","description-off"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.0 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Local specifics related to the interpretation of transfer pricing rules in Bulgaria in the light of OECD Transfer Pricing Guidelines - Baker Tilly South East Europe<\/title>\n<meta name=\"description\" content=\"The application of 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