The mutual agreement procedure (‘MAP’) is an administrative procedure for resolving difficulties/issues related to the interpretation, application and elimination of taxation not in accordance with the Double Taxation Conventions (DTC) concluded by Bulgaria or the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/463/EEC) (‘Arbitration Convention’). The procedure is conducted between the competent authorities of the Contracting States and the taxpayers are not directly involved in it but are notified in a timely manner about its progress and outcome.
The legal basis for conducting the procedure are the provisions on the mutual agreement procedure provided for in the relevant DTC or in the Arbitration Convention.
All DTCs concluded by Bulgaria provide for MAP provisions. These provisions are based on the Model Tax Convention of the Organization for Economic Cooperation and Development (OECD), with some deviations from this Model existing in a limited number of conventions.
The Arbitration Convention applies to avoid double taxation where, based on a transfer pricing adjustment, profits which are included in the profits of an enterprise of a Contracting State are also included or are also likely to be included in the profits of an enterprise of another Contracting State. The Convention also applies to the attribution of profits to a permanent establishment.
More Information: https://nap.bg/en/page?id=711