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Bulgaria’s Cryptocurrency Landscape: Regulation, Licensing, and Compliance
In the ever-evolving world of cryptocurrencies, Bulgaria has emerged as a promising destination for businesses operating in this space. Despite the lack of explicit regulation, the country’s tax authorities have issued guidance considering cryptocurrencies as financial assets for taxation purposes.
Taxation
Individuals resident in Bulgaria are subject to personal income tax at a flat rate of 10% on taxable capital gains from selling cryptocurrencies. If an individual’s cryptocurrency trading activity is conducted systematically and serves as their main source of income, the gains are taxed as business income at a flat rate of 15%. Companies operating in Bulgaria include any capital gains from the sale of financial assets, including cryptocurrencies, in their corporate income tax base, with a corporate income tax rate of 10%.
VAT Exemption
The exchange of fiat currency for bitcoins and vice versa is considered a VAT-exempt transaction by the Bulgarian tax authorities, aligning with the Court of Justice of the European Union’s case law. However, this exemption contributes to the turnover calculation for determining the VAT registration threshold.
Obtaining a Cryptocurrency License in Bulgaria
The cost of a cryptocurrency license in Bulgaria varies depending on several factors, including the specific services offered and scale of operations. To obtain accurate information on the cost associated with obtaining a license, it is recommended to consult with a representative from InteliumLaw.
The timeline for obtaining a cryptocurrency license in Bulgaria involves several steps:
- Crypto company formation: typically takes around 14 days
- Authorization procedure (obtaining of a Bulgarian crypto license): typically takes around 14 days as well
- Overall process: can take between 3 to 6 weeks
Additional Services
InteliumLaw offers a range of additional services to support crypto businesses, including:
- Continuous legal support
- Industry insights
- Accounting services
These services aim to provide comprehensive support to cryptocurrency enterprises holding a ‘crypto license’ in Bulgaria, ensuring they navigate legal complexities, stay informed about industry changes, and receive expert assistance in accounting matters.
FAQ
- Is crypto regulated in Bulgaria? No, but certain aspects may fall under the purview of other financial licenses regulated by the Financial Supervision Commission (FSC) in Bulgaria.
- Do I need to be physically present to register a crypto business in Bulgaria? No, all processes can be done remotely.
- What are the AML/KYC requirements for crypto businesses in Bulgaria? Crypto businesses holding a ‘crypto license’ in Bulgaria are obliged to adhere to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
Conclusion
Bulgaria has emerged as a promising destination for cryptocurrency businesses, with a regulatory framework that supports the growth of this industry. With InteliumLaw’s expertise and support, crypto businesses can navigate the complexities of licensing and compliance, ensuring they operate in accordance with Bulgarian laws and regulations.