Crypto and Taxes: Trading on a Foreign Exchange No Longer Means Anonymity

Bulgarian tax authorities will receive more information about crypto-asset transactions carried out by Bulgarian taxpayers, including when they use service providers outside the country.

The change follows the final adoption at second reading of amendments to the Tax and Social Security Procedure Code, which expand the automatic exchange of information between tax administrations.

What is changing?

The new rules are part of the broader European framework aimed at increasing tax transparency for crypto-assets.

Providers that fall within the scope of the requirements will collect and report certain information about their clients and their crypto-asset transactions. This information may be exchanged between the tax administrations of EU Member States and other participating jurisdictions.

This is particularly important for Bulgarian users who use foreign crypto platforms.

Using an exchange outside Bulgaria no longer means that information about transactions carried out through it remains beyond the reach of the Bulgarian tax authorities.

The crypto market is entering a new stage

The changes are part of a broader process that we are seeing across Europe.

MiCA established a common regulatory framework for crypto-asset service providers. At the same time, requirements relating to transparency, identification and information exchange are increasing.

This is gradually bringing the crypto sector closer to the standards that have existed in the traditional financial system for years.

For users, the conclusion is clear – choosing a platform is no longer just a matter of fees or the number of available assets. Regulation, transparency and who stands behind the platform are becoming increasingly important.

What about foreign exchanges?

For a long time, there was a perception that using a foreign exchange or card made crypto transactions significantly more difficult for local tax authorities to track.

With the expansion of automatic information exchange, this distinction is gradually disappearing.

Or, as we would put it a little less formally:

Congratulations to everyone who thought that using a foreign exchange or card would keep them hidden from the tax authorities. 🙂

The new reality is different – the crypto market is becoming increasingly regulated and transparent, regardless of where the platform is based.

What does this mean for users?

The changes do not automatically mean that every crypto transaction creates a tax liability. The tax treatment depends on the specific transactions and the circumstances of the individual concerned.

However, they clearly show the direction in which the sector is moving – more regulation, greater transparency and an increasingly smaller distinction between local and foreign providers when it comes to reporting.

In this environment, choosing a regulated platform becomes even more important.

Altcoins.bg is a Bulgarian crypto exchange and a crypto-asset service provider licensed by the Bulgarian Financial Supervision Commission under MiCA.

Bulgarian team, local support and operations within a regulated European environment.

The crypto market is changing. And the rules are changing with it.