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Bulgaria Passes EU-Aligned Crypto Tax Law

Bulgaria’s parliament has officially adopted sweeping amendments to its tax code, forcing cryptocurrency platforms to disclose complete client profiles and transaction histories to state revenues. The unanimous legislative vote brings the country into alignment with broader European Union transparency standards designed to eliminate offshore digital asset tax shelters.

Parliamentary Approval and Legislative Timeline

Bulgarian legislators in Sofia have passed pivotal amendments to the Tax and Social Security Procedure Code, officially mandating that virtual asset platforms submit detailed user profiles and transaction records directly to the National Revenue Agency.

Introduced by the Cabinet, the measure completed its second and final reading in the 240-member chamber on September 9 with overwhelming backing—149 votes in favor, zero opposed, and 10 abstentions.

This legislative update incorporates two key European Union directives into domestic law, formalizing Bulgaria’s adoption of the Directive on Administrative Cooperation, commonly known as DAC8.

Although the European Commission established a transposed deadline of December 31, 2025—with operational enforcement beginning January 1, 2026—Sofia’s parliamentary finalization arrived slightly behind the initial target timeframe.

Scope of Mandated Reporting

The updated statutory framework obliges all active digital asset intermediaries operating within the jurisdiction to register with state administrators and systematically file verified client information.

Collectable personal identifying attributes include:

Full name and official home address
Place and date of birth
Unique tax identification numbers (TIN)
Designated tax residency status

Beyond identity collection, entities must transmit itemized ledgers for every digital currency processed. Mandatory disclosures encompass overall gross monetary values, executed volume units, conversion counts relative to fiat currencies, and direct crypto-to-crypto swaps.

Furthermore, external transfers originating from regulated exchanges toward unhosted self-custody wallets are flagged under these disclosure rules, though purely private wallet-to-wallet activity outside intermediary touchpoints remains exempt from continuous oversight.

European Alignment and Global Enforcement

The primary objective behind the European framework is combating cross-border tax evasion enabled by pseudonymous digital transactions. Under the interconnected system, information gathered by Bulgarian administrators can be shared automatically across EU member nations whenever users hold foreign tax residences.

Data collection by service entities began in early 2026, leading up to the first full annual reporting cycle in 2027 and subsequent cross-border information exchanges scheduled before September 30, 2027.

Existing account holders have until January 1, 2027, to complete self-certification forms; failure to comply after two formal warnings within a 60-day window can trigger account restrictions.

This domestic rollout mirrors broader global initiatives, such as the OECD’s Crypto-Asset Reporting Framework (CARF), which launched data collection across 48 non-EU jurisdictions in 2026.

Similar strategies are being executed worldwide: the United Kingdom’s HM Revenue and Customs expects international transfer exchanges starting mid-2027 to harvest substantial undisclosed tax revenues, while Indian authorities recently tightened account verification requirements under updated FATCA and Common Reporting Standard guidelines.

Market Reactions and Compliance Burden

The passage of the bill has sparked lively debate across the financial sector. Proponents emphasize that closing long-standing reporting gaps levels the playing field and deters illegal tax avoidance.

Conversely, privacy advocates and small fintech operators warn that extensive personal data accumulation creates heightened cybersecurity exposure and imposes heavy compliance costs, which could potentially strain smaller startups and alter regional competitiveness within the Balkan financial technology landscape.