Bulgaria will file a complaint to the European Commission about Greece’s decision to impose a 26 percent tax on cross-border transactions between the neighbors, the government in Sofia said on Wednesday.
More than 1,400 Greek companies registered in Bulgaria, as well as Bulgarian companies exporting products to Greece will be affected by the measure aimed at reducing corporate tax avoidance, according to the Bulgarian government, which says the new tax is “discriminatory.”
The Greek Parliament last month introduced the withholding tax on Greek business transactions originating in Cyprus, Ireland and Bulgaria, all of which have lower corporate tax rates than Greece.
Bulgaria, the European Union’s poorest member, will lose nearly 800 million euros a year due to the tax, Deputy Finance Minister Kiril Ananiev has said.
The European Commission, which has three months to come out with a position on the complaint, said it was aware of the new tax and the concerns about its potential negative impact on the EU single market.
“We have received a letter from the Bulgarian authorities and we are analyzing it,” Commission spokeswoman Annika Breidthardt said.
“We await the legal interpretations provided by the ministerial decree to clarify the scope of the legislation. Once this assessment is made the Commission will take the necessary decision to ensure compliance with EU law if need be.”