Identifier
Created
Classification
Origin
05SOFIA626
2005-04-04 10:32:00
UNCLASSIFIED
Embassy Sofia
Cable title:  

BULGARIA: NEXT STEP ON NEGOTIATING A DOUBLE

Tags:  EFIN ECON PREL BU 
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UNCLAS SOFIA 000626 

SIPDIS


STATE FOR E, D, R. WILSON; EB/IFD/OIA M. ROCHE AND EUR/NCE

S. BRANDON
TREASURY FOR PATRICIA BROWN, VIMAL ATUKORALA

E.O. 12958: N/A
TAGS: EFIN ECON PREL BU
SUBJECT: BULGARIA: NEXT STEP ON NEGOTIATING A DOUBLE
TAXATION TREATY


UNCLAS SOFIA 000626

SIPDIS


STATE FOR E, D, R. WILSON; EB/IFD/OIA M. ROCHE AND EUR/NCE

S. BRANDON
TREASURY FOR PATRICIA BROWN, VIMAL ATUKORALA

E.O. 12958: N/A
TAGS: EFIN ECON PREL BU
SUBJECT: BULGARIA: NEXT STEP ON NEGOTIATING A DOUBLE
TAXATION TREATY



1. SUMMARY. Bulgarian tax authorities will meet with
officials from U.S. Treasury in Washington on April 19-20 to
review technical issues and determine when formal
negotiations of a Treaty for the Avoidance of Double
Taxation (DTT) should begin. Deputy Secretary Zoellick lent
his support to a DTT during his meetings here on March 30
with the President, Prime Minister and Foreign Minister
(septel to follow.) The Embassy and the GOB see this as a
top priority and appreciate Treasury's willingness to move
forward. END SUMMARY


2. DTT negotiations were a topic of discussion with the
President, Prime Minister and Foreign Minister during the
recent visit of the Deputy Secretary to Sofia. Secretary
Zoellick personally committed to working with the Bulgarians
and Treasury to get the negotiations started.


3. Deputy Minister of Finance Stamen Tassev recently met
with U.S. Department of Treasury Tax officials to discuss
next steps in the possible negotiation of a DTT between the
U.S. and Bulgaria. Tassev told us his meeting with
Treasury's International Tax officials in Washington in mid-
March were positive and useful. According to Tassev, both
sides agreed to a rough outline of next steps. Treasury and
GOB tax officials will meet on April 19-20 in Washington to
compare tax regimes. If they do not find "critical
differences," they will proceed with a joint press statement
- perhaps to be released in May - announcing the beginning
of technical meetings towards a DTT. The GOB is eager to
keep momentum going on this issue and begin the process
while the current government is still in power. Tassev said
the Ministry of Finance's American law firm, Patton Boggs,
will meet with White House officials on April 6 to express
satisfaction with progress on this issue, and to discuss
unrelated issues.


4. According to Tassev, U.S. Treasury has raised questions
regarding the relatively low volume of trade between the
U.S. and Bulgaria. However, the GOB feels the DTT is needed
in order to increase two-way trade and investment, and to
show U.S. support for Bulgaria as a trusted ally. In
addition, Tassev plans to use the negotiations as a tool in
his effort to convince Parliament to strengthen Bulgaria's
tax code.


5. COMMENT: The GOB is pleased with recent movement toward
negotiation of a DTT, and eager to publicly announce this
ahead of the June general elections. They have pushed this
as a major deliverable in return for GOB support in Iraq and
Afghanistan, and have raised it at all levels of the USG -
most recently with Deputy Secretary Zoellick, who said he
would assist in any way possible. We place the successful
completion of a DTT among the top deliverables for Bulgaria.
Embassy appreciates Treasury's efforts and offers any
assistance in facilitating negotiations. END COMMENT.