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’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.

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.

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.

Nevertheless, the OECD clarifications regarding the arm’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.

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.

ABOUT BAKER TILLY

Baker Tilly South East Europe is a leading firm of auditors, accountants, tax consultants and business advisors, operating in Cyprus, Bulgaria, Romania, Moldova and Greece. Country offices are independent member firms of Baker Tilly International; one of the Top 10 largest networks of the sector.
A blend of young graduates and mature professionals create a fresh, innovative and forward-looking working environment. Our people are at the forefront, with the firm nurturing a culture of continuous improvement, collaboration and inclusion.

 

CAREER OPPORTUNITIES

We invite applications from ambitious, highly motivated and hard-working professionals to join our Sofia office as Junior Auditors.

 

DUTIES AND RESPONSIBILITIES

• Provide support for projects/engagements of the department.
• Active involvement in various stages of audit process under the supervision of qualified auditors
• Assist in the preparation of relevant reports, ensuring accuracy and integrity of data.
• Inform the team member in charge about the status of the project/engagement.
• Keep up to date with key developments and trends related to own role.
• Comply with internal policies, practices, and procedures
• Undertake any other duties and responsibilities, as assigned by the management of the team.

 

REQUIREMENTS

• Undergraduate degree in a relevant field of study e.g. (Accounting, Economics etc.)
• Pursuing or interested to pursue an ACCA/ACA or equivalent professional qualification
• Excellent verbal and written communication skills in both Bulgarian and English.
• Very good knowledge of Microsoft Office suite.
• Results orientation and ability to work in a dynamic and team environment.
• Excellent communication and interpersonal skills
• Positive, mature and professional attitude.

 

REMUNERATION AND BENEFITS

• A competitive salary and benefits package will be offered to the successful candidates, depending on qualifications and experience.
• 100% coverage of ACA/ACCA/CFA professional qualifications cost.
• Paid educational leave for professional qualifications / certifications.
• Learning & Development activities.
• Additional health insurance.
• Food vouchers.
• Mobility and Secondment Opportunities within the region and international network.
• Unlimited progression opportunities on a structured career path.

 

APPLICATION PROCESS

If you are interested in joining our team, please submit your interest by completing our online application here.

 

Baker Tilly is an equal opportunities employer

ABOUT BAKER TILLY

Baker Tilly South East Europe is a leading firm of auditors, accountants, tax consultants and business advisors, operating in Cyprus, Bulgaria, Romania, Moldova and Greece. Country offices are independent member firms of Baker Tilly International; one of the Top 10 largest networks of the sector.

A blend of young graduates and mature professionals create a fresh, innovative and forward-looking working environment. Our people are at the forefront, with the firm nurturing a culture of continuous improvement, collaboration and inclusion.

 

CAREER OPPORTUNITIES

We invite applications from ambitious, highly motivated and hard-working professionals to join our Sofia office as Senior Auditors.

 

DUTIES AND RESPONSIBILITIES

• Provide audit services to local and international clients of various industries and sizes.
• Review small audit and accounts assignments for the attention of audit managers.
• Provide high quality client service, within predetermined budgets and timeframes.
• Cooperate with representatives of the client for audit planning purposes.
• Liaise with other departments of the firm to provide client support and advice, as required.
• Maintain excellent business relationships with existing customers, associates and governmental authorities.
• Identify client needs and areas of audit work.
• Provide training, coaching and support to more junior team members.
• Ensure compliance with internal policies and procedures.

 

REQUIREMENTS

• Bachelor’s degree in Accounting & Finance, or related field.
• Holder or studying towards a related professional qualification (i.e. ACCA).
• 2-4 years of related experience in the Audit department of an audit firm.
• Results orientation and ability to work in a dynamic and team environment.
• Excellent communication and interpersonal skills.
• Positive, mature and professional attitude.
• Excellent verbal and written communication skills in both Bulgarian and English.
• Computer literacy.

 

REMUNERATION AND BENEFITS

• A competitive salary and benefits package will be offered to the successful candidates, depending on qualifications and experience.
• ACCA Professional qualification, financially supported by the firm.
• Additional health insurance.
• Food vouchers.
• Other – telephone allowance, additional annual leave, etc.

 

APPLICATION PROCESS

If you are interested in joining our team, please submit your interest by completing our online application here.

 

Baker Tilly is an equal opportunities employer

ABOUT BAKER TILLY

Baker Tilly South East Europe is a leading firm of auditors, accountants, tax consultants and business advisors, operating in Cyprus, Bulgaria, Romania, Moldova and Greece. Country offices are independent member firms of Baker Tilly International; one of the Top 10 largest networks of the sector.
A blend of young graduates and mature professionals create a fresh, innovative and forward-looking working environment. Our people are at the forefront, with the firm nurturing a culture of continuous improvement, collaboration and inclusion.

 

CAREER OPPORTUNITIES

We invite applications from ambitious, highly motivated and hard-working professionals to join our Blagoevgrad office as Senior Accountant.

 

DUTIES AND RESPONSIBILITIES

• Provide high-quality accounting, bookkeeping and reporting to a portfolio of clients.
• Maintain and analyse the accounting records on a daily basis.
• Review all records and reconcile accounts.
• Prepare and submit monthly VAT, VIES, and INTRASTAT declarations.
• Process documents for VAT Return and prepare and submit all other statutory required declarations, statistical reports and Tax Return.
• Prepare Annual Financial Statements under National Accounting Standards or IFRS.
• Provide periodic management reports.
• Work effectively as a team member as sharing responsibility.

 

REQUIREMENTS

• Bachelor’s degree in accounting & finance or related field between 2-5 years of accountant experience would be considered as an advantage.
• Hand-on experience with month-end/year-end closing procedures.
• Excellent verbal and written communication skills in both English and Bulgarian.
• Detail-oriented, accurate, organized and reliable.
• Able to multitask and prioritize work effectively.
• Positive, mature and professional attitude.
• Very good knowledge of Microsoft Office suite, advanced Excel skills would be considered an advantage.

 

REMUNERATION AND BENEFITS

• A competitive salary and benefits package will be offered to the successful candidates, depending on qualifications and experience.
• 100% coverage of ACA/ACCA/CFA professional qualifications cost.
• Paid educational leave for professional qualifications / certifications.
• Learning & Development activities.
• Additional health insurance.
• Food vouchers.

 

APPLICATION PROCESS

If you are interested in joining our team, please submit your interest by completing our online application here.

 

Baker Tilly is an equal opportunities employer

Amendments to the Accountancy Act promulgated in SG No. 72 of 27.08.2024 entered into force retroactively – 06.07.2024, include a new obligation for sustainability reporting, higher thresholds for enterprise categories, new thresholds for mandatory financial audit, documentation in euros and in a foreign language.

 

I. Sustainability Reporting

Art. 1, para 3 of the Accountancy Act introduces the regulation of the applicable framework for sustainability reporting.

Large enterprises, as well as some small and medium-sized enterprises, should include in their activity reports information on the main intangible resources, how the enterprise depends on them and how they create value for the enterprise. They should also include a separate section with information related to sustainability issues (sustainability report).

The managers and members of the management body of the enterprise are responsible for carrying out an engagement for sustainability assurance by registered auditors.

The annual and consolidated reports of activity of enterprises are obliged to prepare and publish a sustainability report subject to a mandatory sustainability assurance engagement in accordance with the requirements of the Independent Financial Audit and Sustainability Assurance Act.

The report must contain quantitative and qualitative information that is disclosed in accordance with the requirements of the European Sustainability Reporting Standards. The sustainability report is part of the activity report and will be published in a single electronic reporting format.

 

II. Categorization of enterprises

The enterprise categories remain the same, with the thresholds for the indicators „book value of assets“ and „net sales revenue“ being increased.

The enterprise categories are determined based on values that do not exceed at least two of the indicators provided for in the Sustainability Act:

III. Thresholds for mandatory financial audit

The thresholds of the indicators for the annual and consolidated financial statements subject to audit are also changed. According to Art. 37, the reports of enterprises that as of December 31 of the reporting period exceed at least two of the following indicators will be subject to mandatory audit:

1. balance sheet value of assets – 4,000,000 BGN;
2. net sales revenue – 8,000,000 BGN;
3. average number of personnel for the reporting period – 50 people.

 

IV. Documents in euros and in a foreign language

With the amendment of Art. 5, the rule is introduced that accounting documents in enterprises must be drawn up in Bulgarian with Arabic numerals and in euros. They may also be drawn up in the relevant foreign language in foreign currency in cases of transactions agreed in foreign currency with foreign counterparties. When the transaction is agreed in a foreign currency, the equivalent in euros is determined by applying the central exchange rate of the Bulgarian National Bank on the date of the transaction to the amount in foreign currency.

Accounting documents received by enterprises in a foreign language are translated into Bulgarian, in cases where this is required for by law.

NB! Financial statements are drawn up in Bulgarian, with Arabic numerals and in thousands of euros.

*The rules are applied in accordance with the provisions of the LAW ON THE INTRODUCTION OF THE EURO IN THE REPUBLIC OF BULGARIA.

I. Redomiciliation

Redomiciliation is now possible under the procedure of Art. 265t et seq. of the Commerce Act.

A redomiciliation is carried out when a company with registered office in Republic of Bulgaria (the transforming company) transfers its registered office and adopts the legal form of a company that was established in accordance with the legislation of another Member State, has its registered office, central administration or principal place of business in another Member State and is of a type specified in Annex II of Directive (EU) 2017/1132 (the transformed company).

The process is also applicable for a company established under the law of another Member State (converting company), which moves its registered office to the Republic of Bulgaria and changes its legal form into a capital company (converted company), with the respective consequences of the conversion.

A redomiciliation cannot be carried out when:

1. any of the companies participating in the redomiciliation is registered office outside the European Union or the European Economic Area;
2. the law of the Member State applicable to any of the companies involved in the redomiciliation does not allow such a conversion;
3. any of the companies involved in the redomiciliation is an open-ended investment company;
4. the restructuring tools, powers and mechanisms, as well as crisis resolution measures provided for in Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014, apply to the converting company. establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council.

 

II. Expedited liquidation proceedings

Traders who meet six conditions can conduct expedited liquidation proceedings, without the multiple applications to various authorities, in a shorter time for the creditors to be satisfied.

According to Art. 274a. expedited liquidation proceedings of a company are conducted when the company is terminated by a decision of the general meeting and/or consent of the shareholders. For this, a decision to conduct expedited proceedings is also required, which is taken by the general meeting, when the company:

1. has not carried out any activity or has terminated its activity more than 12 months ago;
2. has not hired employees or has terminated its employment relationship with them more than 12 months ago;
3. has not been registered under the Value Added Tax Act or has terminated its registration more than 12 months ago;
4. has no outstanding liabilities to the state and municipalities;
5. there is no pending procedure for establishing tax liabilities and obligations for mandatory social security contributions, to which the National Revenue Agency is a party;
6. is not a defendant in court proceedings, a debtor in enforcement or order proceedings or no enforcement has been initiated against it under the Special Pledges Act or the Financial Collateral Contracts Act.

The company’s assets are distributed only when three months have passed from the day of the announcement of the invitation to the creditors in the trade register.

 

III. Branch of a foreign entity

The latest amendments to the Commercial Act, concerning a branch of a foreign entity, introduce the requirement to submit a copy of each annual financial statement of the foreign entity to the register after it has been entered or submitted in accordance with the legislation of the country where it is registered, except when data on this have been obtained through the system for interconnection of registers of the Member States.

The entry of certain data on the foreign entity may also be carried out ex officio on the basis of a notification from the register of another Member State in which the foreign person is entered, obtained through the system for interconnection of registers of the Member States.

 

IV. Capital and shares in accordance with the amendments to the Law on the Introduction of the Euro in the Republic of Bulgaria

In view of the upcoming changes and the introduction of the euro, Article 117 of the Commercial Act is amended.

The capital of a limited liability company cannot be less than 1 euro. It consists of the shares of the partners, which cannot be less than one euro cent.

We are thrilled to announce that Baker Tilly South East Europe has signed a Memorandum for Cooperation with the Association of Certified Fraud Examiners (ACFE) in Bulgaria!

This partnership marks the beginning of a strong collaboration focused on joint activities in the implementation of projects related to fraud detection and prevention, organization of events for the exchange of experiences and good practices of mutual interest.

Together, we aim to strengthen our efforts in combating fraud and fostering a culture of integrity and transparency. Stay tuned for more updates and upcoming events!

Unveiling the Vital Role of Internal Audit in Today’s Business Landscape

Article by: Nicoletta Savva – Manager, Governance, Risk and Compliance Services, Baker Tilly South East Europe

 

Why is Internal Audit even more relevant today?

Internal audit functions serve as the guardians of integrity, efficiency, and compliance, playing a pivotal role in safeguarding assets, enhancing transparency, driving strategic value, and providing valuable insights to improve organizational performance and resilience.

With technological developments, and regulatory complexities reshaping industries, organizations are exposed to a multitude of risks, from cyber threats to geopolitical instability. Internal auditors serve as proactive risk managers, constantly monitoring the evolving landscape and adapting audit plans and strategies to address emerging threats.

One should always remember that the fundamental mission of an internal auditor is to provide independent and objective assurance that risk management, governance, and internal control processes are effective and aligned with organizational objectives. By conducting comprehensive assessments and evaluations, internal auditors identify areas of vulnerability, recommend improvements, and help management mitigate or even neutralize risks before they escalate.

Moreover, in an era marked by heightened regulatory scrutiny and stakeholder expectations, internal audit functions serve as a critical line of defense against non-compliance and misconduct. By assessing adherence to laws, regulations, and industry standards, internal auditors help ensure that organizations operate ethically, transparently, and in accordance with legal requirements, thereby safeguarding their reputation and minimizing potential legal and financial liabilities.

Returning back to an earlier point, it is important to note that in today’s data-driven economy, where information is a valuable asset, internal audit plays a vital role in ensuring the integrity, confidentiality, and availability of data. With cyber-attacks becoming increasingly sophisticated and data breaches posing significant risks to organizations, internal auditors play a crucial role in evaluating the effectiveness of cybersecurity measures, assessing data governance frameworks, and promoting a culture of information security awareness.

With all the above in mind, we could summarize the importance of Internal Audit as an added value proposition to an organization. No other function provides actionable insights to improve operational efficiency, streamline processes, and optimize resource allocation.

To this effect, internal audit functions contribute to the overall governance structure of organizations by providing independent oversight and accountability. By identifying inefficiencies, redundancies, and areas for improvement, internal auditors help organizations enhance productivity, reduce costs, and achieve strategic objectives more effectively.

In conclusion, the importance of internal audit in today’s business landscape cannot be understated. Internal audit functions serve as indispensable partners in risk management, compliance, and performance improvement. By embracing the evolving role of internal audit and investing in robust audit capabilities, organizations can strengthen their resilience, enhance their reputation, and drive sustainable growth in an increasingly complex and uncertain world.

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