SOFIA (Bulgaria), March 30 (SeeNews) – Bulgaria's finance ministry said on Monday it has notified the European Commission that Greece has adopted amendments to its tax legislation introducing a preferential tax regime for Bulgaria and two other countries.
Greece has introduced a 26% withholding tax on all transactions originating from sources in Bulgaria, Ireland and Cyprus because the corporate tax regime in these three countries are more favourable than in Greece, the ministry said in a statement, quoting a letter from finance minister Vladislav Goranov to EU Commissioner for taxation Pierre Moscovici.
"Moreover, it it assumed that all transactions originating from sources in the three EU countries mentioned intend tax fraud or tax evasion based again only on the more favourable tax conditions in these member states," Goranov added. "Obviously, such a taxation reform is discriminatory and disproportionate to the intended goals."
According to the Bulgarian finance minister, the corporate income taxation could not be treated separately due to the fact that it is a part of the integrated model of the tax system, which each and every EU member state defines.
“[...] the permission of such practice in an EU member state would have an immense negative impact and would compromise and impair the overall functioning of the EU internal market,” Goranov also said.