On 16 September 2022, Bulgaria deposited to the Organization for Economic Co-operation and Development ("OECD") an instrument for ratification of the Multilateral Convention on the Implementation of Measures Related to Tax Treaties for the Prevention of Base Erosion and Profit Shifting (also known as “the MLI Instrument”). It will enter into force for Bulgaria on 1 January 2023.
The bill on the ratification of the MLI Instrument was submitted to the National Assembly in April 2022. The Ratification of the Multilateral Convention on the Implementation of Measures Related to Tax Treaties to Prevent Base Erosion and Profit Shifting Act was passed by the National Assembly on 10 June 2022. The act itself outlines which reservations and notifications Bulgaria has chosen to use and which treaties will be amended accordingly.
The Convention has been in force since 1 July 2018. It is an international agreement prepared by the OECD, which aims to facilitate the renegotiation of already existing Tax Treaties for the avoidance of double taxation between the States that have acceded to the Convention. The international instrument allows the States Parties to the Convention to change, amend or add provisions from its material scope in the already existing Tax Treaties. A total of 64 Treaties concluded between Bulgaria and other countries will be covered by the MLI Convention.