Bulgaria’s Ministry of Finance on 11 November 2025 published a new transfer pricing ordinance in the State Gazette of the Republic of Bulgaria.
The new ordinance will enter into force on 1 January 2026 and will replace the current ordinance, which is based on the 1995 version of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax.
The new ordinance is designed to fully align Bulgaria’s transfer pricing rules with the latest OECD transfer pricing guidelines. The ordinance explicitly provides that its provisions are to be interpreted and applied in accordance with the OECD transfer pricing guidelines in their most up-to-date version, reinforcing their role as the authoritative reference for interpreting Bulgaria’s transfer pricing rules and supporting an ambulatory approach to interpretation.
The new transfer pricing ordinance provides detailed rules on:
Gergana Ahtchieva
BDO in Bulgaria
The new ordinance will enter into force on 1 January 2026 and will replace the current ordinance, which is based on the 1995 version of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax.
The new ordinance is designed to fully align Bulgaria’s transfer pricing rules with the latest OECD transfer pricing guidelines. The ordinance explicitly provides that its provisions are to be interpreted and applied in accordance with the OECD transfer pricing guidelines in their most up-to-date version, reinforcing their role as the authoritative reference for interpreting Bulgaria’s transfer pricing rules and supporting an ambulatory approach to interpretation.
The new transfer pricing ordinance provides detailed rules on:
- identifying the commercial or financial relations among associated enterprises and the conditions and economically relevant circumstances attaching to those relations so that the controlled transaction is accurately delineated, and as part of these – on the analysis of risk in a controlled transaction;
- Nonrecognition of a transaction when it lacks commercial rationality;
- Selecting the most appropriate transfer pricing method given the circumstances of a case (replacing the previous hierarchy of transfer pricing methods), including when the transactional profit split method may be selected and applied and when a method other than the five OECD-recognised transfer pricing methods may be selected and applied;
- Selecting independent comparables, addressing timing issues of comparability, comparability adjustments, determining the arm’s length range (including narrowing the range when comparability issues cannot be otherwise resolved), and determining the point in the range with reference to which transfer pricing adjustments shall be calculated;
- Analysing intragroup services transactions and pricing them;
- The DEMPE (development, enhancement, maintenance, protection, exploitation) analysis of hard-to-value intangibles;
- Economically significant characteristics of financial transactions and their analysis from the perspectives of all parties involved, using credit rating estimates and conditions relevant to assessing if a loan should be requalified as capital; and
- Tax control and the circumstances under which the revenue authorities may disregard the taxpayer’s analysis, including when it is incomplete or not provided timely.
Gergana Ahtchieva
BDO in Bulgaria