site.btaFinance Minister Refers 26% Tax Introduced by Greece on Transactions from Bulgaria to EC

Finance Minister Refers 26% Tax Introduced by Greece on Transactions from Bulgaria to EC

Sofia, March 30 (BTA) - Minister of Finance Vladislav Goranov
sent a letter to the European Commissioner for Economic and
Financial Affairs, Taxation and Customs, Pierre Moscovici,
Goranov's ministry said Monday in a press release.

The letter presents the position of the Republic of Bulgaria in
regard to the compatibility with EU law of the provisions of
Articles 23, 65 and 66 of the Income Tax Code of the Hellenic
Republic No 4172/2013, amended and supplemented by Law No
4321/2015, as well as of the issued on the grounds of Article 65
 (6) and (7) of the Code decision of the Greek Minister of
Finance which established the list of the countries with
preferential tax regime.

Minister Goranov expresses his strong concern that the tax
provisions adopted by Greece are incompatible with the law of
the European Union and infringe the fundamental principles laid
down in the Treaty on the Functioning of the European Union. In
the letter he points out that the introduction of a 26 per cent
withholding tax on all transactions with a source from Bulgaria,
 as well as from Ireland and Cyprus, is discriminatory and
disproportionate to the pursued goal. Thus it is assumed by
presumption that the transactions are performed with the purpose
 of tax fraud or tax evasion only on the basis of the fact that
the corporate taxation regimes in these three countries are more
 favourable than the taxation regime in Greece.

Corporate income taxation cannot be considered as an isolated
issue as it is part of the tax system model that each Member
State establishes in accordance with national and common
European goals and priorities while complying with the EU law.
Allowing a EU Member State to have such a practice would have an
 extremely strong negative effect and would undermine the
overall functioning of the Community internal market, the letter
 says further.