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Automatic exchange of financial information in the field of taxation (FATCA, CRS and DAC 2)

The Bulgarian legislation introduces the rules for automatic exchange of financial information in the field of taxation, transposed Directive 2014/107/EU at the Council of 9 December 2014 amending Directive 2011/16/EU as regards the mandatory automatic exchange of information in the field of taxation (Directive 2014/107/ЕС-DAC 2) and the Common Standard Reporting Standard (CRS) of the Organization for Economic Cooperation and Development (OECD), accepted and published on 13 February 2014. The new amendments to the TSPC are in line with the agreement signed between the Government of the Republic of Bulgaria and the Government of the United States of America (USA) on 5 December 2014.The Agreement on improving international tax compliance and the implementation of the Foreign Account Tax Compliance Act - Act on Compliance with the Tax Legislation in relation to US overseas accounts), ratified by law (SG, issue 47 of 2015).

Under the rules for automatic exchange of financial information, Bulgaria must systematically provide to the other countries involved in this exchange, financial information in the field of taxation concerning their taxable persons. For this purpose, the Bulgarian financial institutions should provide the National Revenue Agency (NRA) with statutory information, which they will provide to the relevant competent tax authority in the country where the person is resident for tax purposes.

In order to fulfill obligations stemming from the TIPC, the investment intermediary Varchev Finance EOOD,financial institution in its capacity to provide information, applies procedures for a complex check of the financial accounts maintained by the intermediary. The complex valuation procedures apply to both new and existing accounts, which are both persons and entities (legal entities or legal arrangements, including commercial companies, partnerships, trusts or foundations). The purpose of the complex review is to collect data to allow the verification to be carried out and to determine whether the account holder is the person for whom the information is provided according to the TIPC rules, ie whether it is a resident for Tax purposes of any of the countries involved in the automatic exchange of financial information. In this regard, when opening account "Varchev Finance" EOOD provides to its clients a Declaration to fill for the purposes of automatic exchange of financial information under Art.142 paragraph 1 of the TIPC (in a form approved by the Executive Director of the NRA):

DECLARATION for individuals
DECLARATION for legal entities

as may request the provision of other evidence. With respect to the existing accounts, Varchev Finance EOOD may decide whether to require additional information from its clients, including the requirement to fill in and submit such a statement.

Information about FATCA's goals

By signing and ratifying the Tax Compliance Agreement and the FATCA Implementation, financial institutions in the Republic of Bulgaria are considered as implementing FATCA.

Varchev Finance EOOD is approved by US tax authority, a financial institution that applies FATCA and is registered in the official Internet Portal of US Federal Revenue Agency (IRS) and holds a Global Intermediary Identification Number (GIIN): UAJ7RT.99999.SL.100.

More information about the automatic exchange of financial information for tax purposes can be found on the NRA's website: http://portal.nap.bg/page?id=673

More information about FATCA can be found on the IRS website: https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca

More information about CRS can be found on the OECD website: http://www.oecd.org/tax/exchange-of-tax-information/standard-for-automatic-exchange-of-financial-account-information-for-tax-matters-9789264216525-en.htm