It was recently revealed that Bulgaria emerged as the country with the second largest amount of Bitcoins in the world. The strangest thing about these numbers is that the Bulgarian government itself has at least 213.000 Bitcoin. At current prices, the value of these Bitcoins is over €667 million! In other words, if its government chose to convert these cryptocurrencies into regular money, they could cover a large part of the country’s GDP.
The Bulgarian government gained this “small” treasure after an incident in which Bulgarian authorities seized Bitcoin during an operation to track down an international group of hackers who had committed various “cybercrimes”.
The fate of these Bitcoin still remains unclear. Perhaps the Bulgarian government has chosen to put them up for auction, as is often the case in the US, or to use them in some other way.
The “Crypto Industry” in Bulgaria
Bulgaria is actively involved in the “FinTech” sector, i.e. the “economic technology” sector, which includes cryptocurrency trading. Apart from the significant number of crypto exchange companies currently operating in Bulgaria, the country is also one of the few where international crypto conferences are held every year. It is also one of the few countries that have 2 “two-way” cryptocurrency ATMs in its capital. And what is that? Two-way crypto ATMs are ATMs where you can buy and sell cryptocurrencies such as Bitcoin, Ether, and Litecoin among others, and redeem them either in euros, dollars or Bulgarian levs.
The truth is that Bulgaria is a popular destination for online businesses, as it offers an affordable and well-trained workforce, while at the same time is one of the most competitive tax environments in the Balkans, perhaps in Europe in general. Bulgaria also imposes the lowest corporate and personal income tax in the EU, with a rate of just 10%!
How are cryptocurrencies taxed in Bulgaria?
Trading with cryptocurrencies in Bulgaria is treated the same way as other financial assets. Therefore, any profits made from Bitcoin transactions will be subject to a 10% tax, which as mentioned above is the lowest in the EU.) Transactions and conversions from cryptos to cryptos must be reported to the financial authorities annually.