The Bulgarian Parliament has completed the final voting on the amendment to the legislation regarding cryptocurrency reporting, requiring cryptocurrency service providers to submit users' identities, tax residency information, and transaction data to the national tax authorities. This move is aimed at aligning the country's system with the EU's framework for the exchange of cryptocurrency-related tax information.

149 votes in favor of passage

This amendment was proposed by the Cabinet and was passed in the second reading of parliament with 149 votes in favor, 0 votes against, and 10 abstentions. The new regulations require companies that provide crypto asset services locally to complete registration and submit information about their registered users to the Bulgarian National Tax Service.

The scope of declaration includes not only customer identities but also transaction activities. The platform is required to collect and submit information such as names, addresses, dates and places of birth, tax identification numbers, and the locations of tax residents.

Covers buying and selling, transfers, and coin-to-coin exchanges

In terms of transaction data, the declared content will cover the buying, selling, transferring, and exchanging of crypto assets, as well as transactions between crypto assets and fiat currencies or other crypto assets. Enterprises are also required to summarize the total transaction amount, the number of transactions completed, and the number of transactions related to the buying and selling of fiat currencies by asset category.

Coin-to-coin transactions are also included in the reporting scope. If users transfer assets from the reporting platform to external addresses, such transactions may also be part of the reporting system. Therefore, some transfer records involving self-hosted wallets may appear in the data submitted by the platform.

However, the rules do not require service providers to continuously report on-chain activities that occur solely between self-hosted wallets. In other words, pure self-hosted transactions that are outside of the platform's visibility range are not automatically included in the regular reporting process.

The requirements imposed by the EU came into effect this year.

This legislative amendment corresponds to the eighth edition of the European Union's 'Administrative Cooperation Directive', which is DAC8. This framework includes crypto assets within the scope of tax information declaration, requiring member states to complete their national legislation by December 31, 2025, and to implement it from January 1, 2026.

According to this schedule, Bulgaria's final approval is more than eight months later than the original legislative deadline set by the European Union. Under the current arrangements, service providers have been collecting reportable information since January 1, 2026, and the data for the first full year is expected to enter the formal submission and cross-border exchange phase in 2027.

The design of the EU is such that if a user's tax residency is in another participating jurisdiction, the national tax authorities can transfer the data submitted by the platform to that corresponding country. The European Commission has previously stated that this system is mainly intended to address issues of tax evasion and tax avoidance arising from cross-border transactions of crypto assets.

Failure to provide information as required or restrictions in place.

According to the European framework, existing individual customers are generally required to submit a valid tax residency self-certification by January 1, 2027. If a customer still fails to submit the required documents within 60 days after two reminders from the platform, service providers may take restrictive measures against their account. Subsequent penalties and enforcement will be handled by each country in accordance with its own national regulations.

Apart from the European Union, the CARF promoted by the Organization for Economic Co-operation and Development (OECD) is also expanding the scope of encrypted tax information exchange. This framework is aimed at jurisdictions outside the EU, and as of 2026, 48 judicial jurisdictions have already commenced data collection, with most expected to start exchanging information in 2027.

This means that encrypted tax filings are shifting from being regulated by a single country to involving cross-border collaboration. For exchanges, brokers, and other centralized intermediaries, customer identification, verification of tax residency, and transaction tracking are becoming clearer compliance requirements.