Press Release: Direct taxation: The European Commission requests that Bulgaria end discriminatory tax treatment of foreign governmental, municipal and corporate bonds

The European Commission formally requested Bulgaria to change its tax provisions according to which income from Bulgarian governmental, municipal and corporate bonds are exempt from tax, whereas no such exemption is granted for similar bonds issued abroad. The Commission considered that these rules are incompatible with the EC Treaty, which guarantees the free movement of capital. The request took the form of a reasoned opinion (second step of the infringement procedure provided for in Article 226 of the EC Treaty). If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the European Court of Justice.