Over 7 billion euros have been lost to Bulgaria’s budgets – they have flowed to offshore companies –

/ world today news/ BGN 14 billion (over EUR 7 billion) have been lost to Bulgaria‘s budgets since the beginning of the transition until now, because they have flowed to offshore areas.

Losses for the European Union (EU) are measured in trillions. “That’s why Europe is leading a debate on offshore zones. We responded to it and prepared a law” – this is how the head of the budget committee Yordan Tsonev presented to the deputies of the committee a draft, popularly known as the law on offshore zones, which was adopted in the first reading, writes the newspaper “24 chasa “.

It is recalled that it was developed by him and the MP from DPS Delyan Peevski. The purpose of the project is to prohibit offshore companies from operating in important areas of the economy and to eliminate deviations in taxation, Tsonev reasoned.

It prohibits offshore companies from participating in public procurement, privatization, asking for concessions, licenses for credit institutions, insurance activity, mobile operator, publishing newspapers, etc. Between the two readings, it will also be considered whether investment intermediaries will be included in the prohibited activities, as well as rules for participation in trading on the stock exchange.

A 35% tax on transactions with companies registered in offshore areas is also foreseen. Taxation will be carried out if the party to the transaction and the recipient of the transfer is a company registered in such a zone with which Bulgaria does not have an agreement to avoid double taxation.

The draft has also laid down criteria for evaluating which transaction is carried out for tax evasion. One of them, for example, is the conclusion of contracts at prices lower than market prices. According to the project, areas where the profit tax is more than 60% lower than that in our country will be considered for a preferential tax regime – i.e. companies pay 4%. The project placed in the group of taxable transactions and companies registered in Belgium and the Netherlands, which were not offshore, but were “tax hooligans”, as Tsonev defined them.

Deputy Finance Minister Lyudmila Petkova stated that the proposed law would not affect respectable business and defended the project in her personal capacity, but did not present an official position of the department.