Agreement between the Government of the United States of America and the 

Government of the Republic of Bulgaria to Improve International Tax Compliance and 

to Implement FATCA

Whereas, the Government of the United States of America and the Government of the 

Republic of Bulgaria (each, a “Party,” and together, the “Parties”) desire to conclude an 

agreement to improve international tax compliance;

Whereas, Article 25 of the Convention between the Government of the United States of 

America and the Government of the Republic of Bulgaria for the Avoidance of Double 

Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the 

“Convention”), along with a Protocol, done at Washington on February 23, 2007, authorizes 

the exchange of information for tax purposes, including on an automatic basis;

Whereas, the United States of America enacted provisions commonly known as the Foreign 

Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for financial 

institutions with respect to certain accounts;

Whereas, the Government of the Republic of Bulgaria is supportive of the underlying policy 

goal of FATCA to improve tax compliance;

Whereas, FATCA has raised a number of issues, including that Bulgarian financial 

institutions may not be able to comply with certain aspects of FATCA due to domestic legal 

impediments; 

Whereas, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for Bulgarian financial institutions;

Whereas, the Parties desire to conclude an agreement to improve international tax compliance 

and provide for the implementation of FATCA based on domestic reporting and automatic 

exchange pursuant to the Convention, and subject to the confidentiality and other protections 

provided for therein, including the provisions limiting the use of the information exchanged 

under the Convention;

Now, therefore, the Parties have agreed as follows:

Article 1

Definitions

1. For purposes of this agreement and any annexes thereto (“Agreement”), the following 

terms shall have the meanings set forth below:

a) The term “United States” means the United States of America, including the 

States thereof, but does not include the U.S. Territories. Any reference to a 

“State” of the United States includes the District of Columbia.

b) The term “U.S. Territory” means American Samoa, the Commonwealth of 

the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or 

the U.S. Virgin Islands.
c) The term “IRS” means the U.S. Internal Revenue Service.

d) The term “Bulgaria” means the Republic of Bulgaria. 

e) The term “Partner Jurisdiction” means a jurisdiction that has in effect an 

agreement with the United States to facilitate the implementation of FATCA. 

The IRS shall publish a list identifying all Partner Jurisdictions.

f) The term “Competent Authority” means:

(1) in the case of the United States, the Secretary of the Treasury or his 

delegate; and

(2) in the case of Bulgaria, the Minister of Finance or an authorized 

representative.

g) The term “Financial Institution” means a Custodial Institution, a Depository 

Institution, an Investment Entity, or a Specified Insurance Company.

h) The term “Custodial Institution” means any Entity that holds, as a 

substantial portion of its business, financial assets for the account of others. 

An entity holds financial assets for the account of others as a substantial 

portion of its business if the entity’s gross income attributable to the holding of 

financial assets and related financial services equals or exceeds 20 percent of 

the entity’s gross income during the shorter of: (i) the three-year period that 

ends on December 31 (or the final day of a non-calendar year accounting 

period) prior to the year in which the determination is being made; or (ii) the 

period during which the entity has been in existence.

i) The term “Depository Institution” means any Entity that accepts deposits in 

the ordinary course of a banking or similar business. 

j) The term “Investment Entity” means any Entity that conducts as a business 

(or is managed by an entity that conducts as a business) one or more of the 

following activities or operations for or on behalf of a customer:

(1) trading in money market instruments (cheques, bills, certificates of 

deposit, derivatives, etc.); foreign exchange; exchange, interest rate 

and index instruments; transferable securities; or commodity futures 

trading;

(2) individual and collective portfolio management; or

(3) otherwise investing, administering, or managing funds or money on 

behalf of other persons.

This subparagraph 1(j) shall be interpreted in a manner consistent with similar 

language set forth in the definition of “financial institution” in the Financial 

Action Task Force Recommendations.
k) The term “Specified Insurance Company” means any Entity that is an 

insurance company (or the holding company of an insurance company) that 

issues, or is obligated to make payments with respect to, a Cash Value 

Insurance Contract or an Annuity Contract.

l) The term “Bulgarian Financial Institution” means (i) any Financial 

Institution resident in Bulgaria, but excluding any branch of such Financial 

Institution that is located outside Bulgaria, and (ii) any branch of a Financial 

Institution not resident in Bulgaria, if such branch is located in Bulgaria.

m) The term “Partner Jurisdiction Financial Institution” means (i) any 

Financial Institution established in a Partner Jurisdiction, but excluding any 

branch of such Financial Institution that is located outside the Partner 

Jurisdiction, and (ii) any branch of a Financial Institution not established in the 

Partner Jurisdiction, if such branch is located in the Partner Jurisdiction.

n) The term “Reporting Bulgarian Financial Institution” means any Bulgarian

Financial Institution that is not a Non-Reporting Bulgarian Financial 

Institution.

o) The term “Non-Reporting Bulgarian Financial Institution” means any 

Bulgarian Financial Institution, or other Entity resident in Bulgaria, that is 

described in Annex II as a Non-Reporting Bulgarian Financial Institution or 

that otherwise qualifies as a deemed-compliant FFI or an exempt beneficial 

owner under relevant U.S. Treasury Regulations.

p) The term “Nonparticipating Financial Institution” means a nonparticipating 

FFI, as that term is defined in relevant U.S. Treasury Regulations, but does not 

include a Bulgarian Financial Institution or other Partner Jurisdiction Financial 

Institution other than a Financial Institution treated as a Nonparticipating 

Financial Institution pursuant to subparagraph 2(b) of Article 5 of this 

Agreement or the corresponding provision in an agreement between the 

United States and a Partner Jurisdiction.

q) The term “Financial Account” means an account maintained by a Financial 

Institution, and includes:

(1) in the case of an Entity that is a Financial Institution solely because it 

is an Investment Entity, any equity or debt interest (other than interests 

that are regularly traded on an established securities market) in the 

Financial Institution; 

(2) in the case of a Financial Institution not described in subparagraph 

1(q)(1) of this Article, any equity or debt interest in the Financial 

Institution (other than interests that are regularly traded on an 

established securities market), if (i) the value of the debt or equity 

interest is determined, directly or indirectly, primarily by reference to 

assets that give rise to U.S. Source Withholdable Payments, and (ii) the 

class of interests was established with a purpose of avoiding reporting 
in accordance with this Agreement; and

(3) any Cash Value Insurance Contract and any Annuity Contract issued or 

maintained by a Financial Institution, other than a noninvestmentlinked, nontransferable immediate life annuity that is issued to an 

individual and monetizes a pension or disability benefit provided under 

an account that is excluded from the definition of Financial Account in 

Annex II.

Notwithstanding the foregoing, the term “Financial Account” does not include 

any account that is excluded from the definition of Financial Account in 

Annex II. For purposes of this Agreement, interests are “regularly traded” if 

there is a meaningful volume of trading with respect to the interests on an 

ongoing basis, and an “established securities market” means an exchange that 

is officially recognized and supervised by a governmental authority in which 

the market is located and that has a meaningful annual value of shares traded 

on the exchange. For purposes of this subparagraph 1(q), an interest in a 

Financial Institution is not “regularly traded” and shall be treated as a 

Financial Account if the holder of the interest (other than a Financial 

Institution acting as an intermediary) is registered on the books of such 

Financial Institution. The preceding sentence will not apply to interests first 

registered on the books of such Financial Institution prior to July 1, 2014, and 

with respect to interests first registered on the books of such Financial 

Institution on or after July 1, 2014, a Financial Institution is not required to 

apply the preceding sentence prior to January 1, 2016.

r) The term “Depository Account” includes any commercial, checking, savings, 

time, or thrift account, or an account that is evidenced by a certificate of 

deposit, thrift certificate, investment certificate, certificate of indebtedness, or 

other similar instrument maintained by a Financial Institution in the ordinary 

course of a banking or similar business. A Depository Account also includes 

an amount held by an insurance company pursuant to a guaranteed investment 

contract or similar agreement to pay or credit interest thereon.

s) The term “Custodial Account” means an account (other than an Insurance 

Contract or Annuity Contract) for the benefit of another person that holds any 

financial instrument or contract held for investment (including, but not limited 

to, a share or stock in a corporation, a note, bond, debenture, or other evidence 

of indebtedness, a currency or commodity transaction, a credit default swap, a 

swap based upon a nonfinancial index, a notional principal contract, an 

Insurance Contract or Annuity Contract, and any option or other derivative 

instrument).

t) The term “Equity Interest” means, in the case of a partnership that is a 

Financial Institution, either a capital or profits interest in the partnership. In 

the case of a trust that is a Financial Institution, an Equity Interest is 

considered to be held by any person treated as a settlor or beneficiary of all or 

a portion of the trust, or any other natural person exercising ultimate effective 

control over the trust. A Specified U.S. Person shall be treated as being a 

beneficiary of a foreign trust if such Specified U.S. Person has the right to 
receive directly or indirectly (for example, through a nominee) a mandatory 

distribution or may receive, directly or indirectly, a discretionary distribution 

from the trust. 

u) The term “Insurance Contract” means a contract (other than an Annuity 

Contract) under which the issuer agrees to pay an amount upon the occurrence 

of a specified contingency involving mortality, morbidity, accident, liability, or 

property risk.

v) The term “Annuity Contract” means a contract under which the issuer agrees 

to make payments for a period of time determined in whole or in part by 

reference to the life expectancy of one or more individuals. The term also 

includes a contract that is considered to be an Annuity Contract in accordance 

with the law, regulation, or practice of the jurisdiction in which the contract 

was issued, and under which the issuer agrees to make payments for a term of 

years. 

w) The term “Cash Value Insurance Contract” means an Insurance Contract 

(other than an indemnity reinsurance contract between two insurance 

companies) that has a Cash Value greater than $50,000.

x) The term “Cash Value” means the greater of (i) the amount that the 

policyholder is entitled to receive upon surrender or termination of the 

contract (determined without reduction for any surrender charge or policy 

loan), and (ii) the amount the policyholder can borrow under or with regard to 

the contract. Notwithstanding the foregoing, the term “Cash Value” does not 

include an amount payable under an Insurance Contract as: 

(1) a personal injury or sickness benefit or other benefit providing 

indemnification of an economic loss incurred upon the occurrence of 

the event insured against; 

(2) a refund to the policyholder of a previously paid premium under an 

Insurance Contract (other than under a life insurance contract) due to 

policy cancellation or termination, decrease in risk exposure during the 

effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or 

(3) a policyholder dividend based upon the underwriting experience of the 

contract or group involved.

y) The term “U.S. Reportable Account” means a Financial Account maintained 

by a Reporting Bulgarian Financial Institution and held by one or more 

Specified U.S. Persons or by a Non-U.S. Entity with one or more Controlling 

Persons that is a Specified U.S. Person. Notwithstanding the foregoing, an 

account shall not be treated as a U.S. Reportable Account if such account is 

not identified as a U.S. Reportable Account after application of the due 

diligence procedures in Annex I.
z) The term “Account Holder” means the person listed or identified as the 

holder of a Financial Account by the Financial Institution that maintains the 

account. A person, other than a Financial Institution, holding a Financial 

Account for the benefit or account of another person as agent, custodian, 

nominee, signatory, investment advisor, or intermediary, is not treated as 

holding the account for purposes of this Agreement, and such other person is 

treated as holding the account. For purposes of the immediately preceding

sentence, the term “Financial Institution” does not include a Financial

Institution organized or incorporated in a U.S. Territory. In the case of a Cash 

Value Insurance Contract or an Annuity Contract, the Account Holder is any 

person entitled to access the Cash Value or change the beneficiary of the 

contract. If no person can access the Cash Value or change the beneficiary, the 

Account Holder is any person named as the owner in the contract and any 

person with a vested entitlement to payment under the terms of the contract. 

Upon the maturity of a Cash Value Insurance Contract or an Annuity Contract, 

each person entitled to receive a payment under the contract is treated as an 

Account Holder.

aa) The term “U.S. Person” means a U.S. citizen or resident individual, a 

partnership or corporation organized in the United States or under the laws of 

the United States or any State thereof, a trust if (i) a court within the United 

States would have authority under applicable law to render orders or 

judgments concerning substantially all issues regarding administration of the 

trust, and (ii) one or more U.S. persons have the authority to control all 

substantial decisions of the trust, or an estate of a decedent that is a citizen or 

resident of the United States. This subparagraph 1(aa) shall be interpreted in 

accordance with the U.S. Internal Revenue Code.

bb) The term “Specified U.S. Person” means a U.S. Person, other than: (i) a 

corporation the stock of which is regularly traded on one or more established 

securities markets; (ii) any corporation that is a member of the same expanded 

affiliated group, as defined in section 1471(e)(2) of the U.S. Internal Revenue 

Code, as a corporation described in clause (i); (iii) the United States or any 

wholly owned agency or instrumentality thereof; (iv) any State of the United 

States, any U.S. Territory, any political subdivision of any of the foregoing, or 

any wholly owned agency or instrumentality of any one or more of the 

foregoing; (v) any organization exempt from taxation under section 501(a) of 

the U.S. Internal Revenue Code or an individual retirement plan as defined in 

section 7701(a)(37) of the U.S. Internal Revenue Code; (vi) any bank as 

defined in section 581 of the U.S. Internal Revenue Code; (vii) any real estate 

investment trust as defined in section 856 of the U.S. Internal Revenue Code; 

(viii) any regulated investment company as defined in section 851 of the U.S. 

Internal Revenue Code or any entity registered with the U.S. Securities and 

Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 

80a-64); (ix) any common trust fund as defined in section 584(a) of the U.S.

Internal Revenue Code; (x) any trust that is exempt from tax under section 

664(c) of the U.S. Internal Revenue Code or that is described in section 

4947(a)(1) of the U.S. Internal Revenue Code; (xi) a dealer in securities, 

commodities, or derivative financial instruments (including notional principal 

contracts, futures, forwards, and options) that is registered as such under the 
laws of the United States or any State; (xii) a broker as defined in section 

6045(c) of the U.S. Internal Revenue Code; or (xiii) any tax-exempt trust 

under a plan that is described in section 403(b) or section 457(b) of the U.S. 

Internal Revenue Code. 

cc) The term “Entity” means a legal person or a legal arrangement such as a trust. 

dd) The term “Non-U.S. Entity” means an Entity that is not a U.S. Person.

ee) The term “U.S. Source Withholdable Payment” means any payment of 

interest (including any original issue discount), dividends, rents, salaries, 

wages, premiums, annuities, compensations, remunerations, emoluments, and 

other fixed or determinable annual or periodical gains, profits, and income, if 

such payment is from sources within the United States. Notwithstanding the 

foregoing, a U.S. Source Withholdable Payment does not include any payment 

that is not treated as a withholdable payment in relevant U.S. Treasury 

Regulations.

ff) An Entity is a “Related Entity” of another Entity if either Entity controls the 

other Entity, or the two Entities are under common control. For this purpose 

control includes direct or indirect ownership of more than 50 percent of the 

vote or value in an Entity. Notwithstanding the foregoing, Bulgaria may treat 

an Entity as not a Related Entity of another Entity if the two Entities are not 

members of the same expanded affiliated group as defined in section 

1471(e)(2) of the U.S. Internal Revenue Code.

gg) The term “U.S. TIN” means a U.S. federal taxpayer identifying number.

hh) The term “Controlling Persons” means the natural persons who exercise 

control over an Entity. In the case of a trust, such term means the settlor, the 

trustees, the protector (if any), the beneficiaries or class of beneficiaries, and 

any other natural person exercising ultimate effective control over the trust, 

and in the case of a legal arrangement other than a trust, such term means 

persons in equivalent or similar positions. The term “Controlling Persons” 

shall be interpreted in a manner consistent with the Financial Action Task 

Force Recommendations.

2. Any term not otherwise defined in this Agreement shall, unless the context otherwise 

requires or the Competent Authorities agree to a common meaning (as permitted by domestic 

law), have the meaning that it has at that time under the law of the Party applying this 

Agreement, any meaning under the applicable tax laws of that Party prevailing over a 

meaning given to the term under other laws of that Party.

Article 2

Obligations to Obtain and Exchange Information with Respect to U.S. Reportable 

Accounts

1. Subject to the provisions of Article 3 of this Agreement, Bulgaria shall obtain the 

information specified in paragraph 2 of this Article with respect to all U.S. Reportable 

Accounts and shall annually exchange this information with the United States on an 
automatic basis pursuant to the provisions of Article 25 of the Convention.

2. The information to be obtained and exchanged with respect to each U.S. Reportable 

Account of each Reporting Bulgarian Financial Institution is:

a) the name, address, and U.S. TIN of each Specified U.S. Person that is an 

Account Holder of such account and, in the case of a Non-U.S. Entity that, 

after application of the due diligence procedures set forth in Annex I, is 

identified as having one or more Controlling Persons that is a Specified U.S. 

Person, the name, address, and U.S. TIN (if any) of such entity and each such 

Specified U.S. Person;

b) the account number (or functional equivalent in the absence of an account 

number); 

c) the name and identifying number of the Reporting Bulgarian Financial 

Institution;

d) the account balance or value (including, in the case of a Cash Value Insurance 

Contract or Annuity Contract, the Cash Value or surrender value) as of the end 

of the relevant calendar year or other appropriate reporting period or, if the 

account was closed during such year, immediately before closure; 

e) in the case of any Custodial Account: 

(1) the total gross amount of interest, the total gross amount of dividends, 

and the total gross amount of other income generated with respect to 

the assets held in the account, in each case paid or credited to the 

account (or with respect to the account) during the calendar year or 

other appropriate reporting period; and 

(2) the total gross proceeds from the sale or redemption of property paid or 

credited to the account during the calendar year or other appropriate 

reporting period with respect to which the Reporting Bulgarian

Financial Institution acted as a custodian, broker, nominee, or 

otherwise as an agent for the Account Holder; 

f) in the case of any Depository Account, the total gross amount of interest paid 

or credited to the account during the calendar year or other appropriate 

reporting period; and

g) in the case of any account not described in subparagraph 2(e) or 2(f) of this 

Article, the total gross amount paid or credited to the Account Holder with 

respect to the account during the calendar year or other appropriate reporting 

period with respect to which the Reporting Bulgarian Financial Institution is 

the obligor or debtor, including the aggregate amount of any redemption 

payments made to the Account Holder during the calendar year or other 

appropriate reporting period.

Article 3
Time and Manner of Exchange of Information

1. For purposes of the exchange obligation in Article 2 of this Agreement, the amount 

and characterization of payments made with respect to a U.S. Reportable Account may be 

determined in accordance with the principles of the tax laws of Bulgaria. 

2. For purposes of the exchange obligation in Article 2 of this Agreement, the 

information exchanged shall identify the currency in which each relevant amount is 

denominated.

3. With respect to paragraph 2 of Article 2 of this Agreement, information is to be 

obtained and exchanged with respect to 2014 and all subsequent years, except that:

a) the information to be obtained and exchanged with respect to 2014 is only the 

information described in subparagraphs 2(a) through 2(d) of Article 2 of this 

Agreement; 

b) the information to be obtained and exchanged with respect to 2015 is the 

information described in subparagraphs 2(a) through 2(g) of Article 2 of this 

Agreement, except for gross proceeds described in subparagraph 2(e)(2) of 

Article 2 of this Agreement; and

c) the information to be obtained and exchanged with respect to 2016 and 

subsequent years is the information described in subparagraphs 2(a) through 

2(g) of Article 2 of this Agreement;

4. Notwithstanding paragraph 3 of this Article, with respect to each U.S. Reportable 

Account maintained by a Reporting Bulgarian Financial Institution as of June 30, 2014, and 

subject to paragraph 2 of Article 6 of this Agreement, Bulgaria is not required to obtain and 

include in the exchanged information the U.S. TIN of any relevant person if such U.S. TIN is 

not in the records of the Reporting Bulgarian Financial Institution. In such a case, Bulgaria

shall obtain and include in the exchanged information the date of birth of the relevant person, 

if the Reporting Bulgarian Financial Institution has such date of birth in its records.

5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 of 

this Agreement shall be exchanged within nine months after the end of the calendar year to 

which the information relates. 

6. The Competent Authorities of Bulgaria and the United States shall enter into an 

agreement or arrangement under the mutual agreement procedure provided for in Article 24 

of the Convention, which shall:

a) establish the procedures for the automatic exchange obligations described in 

Article 2 of this Agreement; 

b) prescribe rules and procedures as may be necessary to implement Article 5 of 

this Agreement; and

c) establish as necessary procedures for the exchange of the information reported 

under subparagraph 1(b) of Article 4 of this Agreement.
7. All information exchanged shall be subject to the confidentiality and other protections 

provided for in the Convention, including the provisions limiting the use of the information 

exchanged.

Article 4

Application of FATCA to Bulgarian Financial Institutions

1. Treatment of Reporting Bulgarian Financial Institutions. Each Reporting 

Bulgarian Financial Institution shall be treated as complying with, and not subject to 

withholding under, section 1471 of the U.S. Internal Revenue Code if Bulgaria complies with 

its obligations under Articles 2 and 3 of this Agreement with respect to such Reporting 

Bulgarian Financial Institution, and the Reporting Bulgarian Financial Institution:

a) identifies U.S. Reportable Accounts and reports annually to the Bulgarian

Competent Authority the information required to be reported in paragraph 2 of 

Article 2 of this Agreement in the time and manner described in Article 3 of 

this Agreement;

b) for each of 2015 and 2016, reports annually to the Bulgarian Competent 

Authority the name of each Nonparticipating Financial Institution to which it 

has made payments and the aggregate amount of such payments;

c) complies with the applicable registration requirements on the IRS FATCA 

registration website;

d) to the extent that a Reporting Bulgarian Financial Institution is (i) acting as a 

qualified intermediary (for purposes of section 1441 of the U.S. Internal 

Revenue Code) that has elected to assume primary withholding responsibility 

under chapter 3 of subtitle A of the U.S. Internal Revenue Code, (ii) a foreign 

partnership that has elected to act as a withholding foreign partnership (for 

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), 

or (iii) a foreign trust that has elected to act as a withholding foreign trust (for 

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), 

withholds 30 percent of any U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution; and 

e) in the case of a Reporting Bulgarian Financial Institution that is not described 

in subparagraph 1(d) of this Article and that makes a payment of, or acts as an 

intermediary with respect to, a U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution, the Reporting Bulgarian Financial 

Institution provides to any immediate payor of such U.S. Source Withholdable 

Payment the information required for withholding and reporting to occur with 

respect to such payment.

Notwithstanding the foregoing, a Reporting Bulgarian Financial Institution with respect to 

which the conditions of this paragraph 1 are not satisfied shall not be subject to withholding 

under section 1471 of the U.S. Internal Revenue Code unless such Reporting Bulgarian

Financial Institution is treated by the IRS as a Nonparticipating Financial Institution pursuant 

to subparagraph 2(b) of Article 5 of this Agreement. 
2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall 

not require a Reporting Bulgarian Financial Institution to withhold tax under section 1471 or 

1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant 

account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to 

close such account, if the U.S. Competent Authority receives the information set forth in 

paragraph 2 of Article 2 of this Agreement, subject to the provisions of Article 3 of this 

Agreement, with respect to such account.

3. Specific Treatment of Bulgarian Retirement Plans. The United States shall treat as 

deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes of sections 

1471 and 1472 of the U.S. Internal Revenue Code, Bulgarian retirement plans described in 

Annex II. For this purpose, a Bulgarian retirement plan includes an Entity established or 

located in, and regulated by, Bulgaria, or a predetermined contractual or legal arrangement, 

operated to provide pension or retirement benefits or earn income for providing such benefits 

under the laws of Bulgaria and regulated with respect to contributions, distributions, 

reporting, sponsorship, and taxation. 

4. Identification and Treatment of Other Deemed-Compliant FFIs and Exempt 

Beneficial Owners. The United States shall treat each Non-Reporting Bulgarian Financial 

Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for 

purposes of section 1471 of the U.S. Internal Revenue Code. 

5. Special Rules Regarding Related Entities and Branches That Are 

Nonparticipating Financial Institutions. If a Bulgarian Financial Institution, that otherwise 

meets the requirements described in paragraph 1 of this Article or is described in paragraph 3 

or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents 

such Related Entity or branch from fulfilling the requirements of a participating FFI or 

deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has 

a Related Entity or branch that is treated as a Nonparticipating Financial Institution solely due 

to the expiration of the transitional rule for limited FFIs and limited branches under relevant 

U.S. Treasury Regulations, such Bulgarian Financial Institution shall continue to be in 

compliance with the terms of this Agreement and shall continue to be treated as a deemedcompliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 of the 

U.S. Internal Revenue Code, provided that:

a) the Bulgarian Financial Institution treats each such Related Entity or branch as 

a separate Nonparticipating Financial Institution for purposes of all the 

reporting and withholding requirements of this Agreement and each such 

Related Entity or branch identifies itself to withholding agents as a 

Nonparticipating Financial Institution;

b) each such Related Entity or branch identifies its U.S. accounts and reports the 

information with respect to those accounts as required under section 1471 of 

the U.S. Internal Revenue Code to the extent permitted under the relevant laws 

pertaining to the Related Entity or branch; and

c) such Related Entity or branch does not specifically solicit U.S. accounts held 

by persons that are not resident in the jurisdiction where such Related Entity 

or branch is located or accounts held by Nonparticipating Financial 
Institutions that are not established in the jurisdiction where such Related 

Entity or branch is located, and such Related Entity or branch is not used by 

the Bulgarian Financial Institution or any other Related Entity to circumvent 

the obligations under this Agreement or under section 1471 of the U.S. 

Internal Revenue Code, as appropriate.

6. Coordination of Timing. Notwithstanding paragraphs 3 and 5 of Article 3 of this 

Agreement: 

a) Bulgaria shall not be obligated to obtain and exchange information with 

respect to a calendar year that is prior to the calendar year with respect to 

which similar information is required to be reported to the IRS by participating 

FFIs pursuant to relevant U.S. Treasury Regulations; and

b) Bulgaria shall not be obligated to begin exchanging information prior to the 

date by which participating FFIs are required to report similar information to 

the IRS under relevant U.S. Treasury Regulations.

7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding 

Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, in 

implementing this Agreement, Bulgaria may use, and may permit Bulgarian Financial 

Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a 

corresponding definition in this Agreement, provided that such application would not 

frustrate the purposes of this Agreement.

Article 5

Collaboration on Compliance and Enforcement

1. Minor and Administrative Errors. The U.S. Competent Authority shall notify the 

Bulgarian Competent Authority when the U.S. Competent Authority has reason to believe 

that administrative errors or other minor errors may have led to incorrect or incomplete 

information reporting or resulted in other infringements of this Agreement. The Bulgarian

Competent Authority shall apply its domestic law (including applicable penalties) to 

obtain corrected and/or complete information or to resolve other infringements of this 

Agreement.

2. Significant Non-Compliance. 

a) The U.S. Competent Authority shall notify the Bulgarian Competent Authority 

when the U.S. Competent Authority has determined that there is significant 

non-compliance with the obligations under this Agreement with respect to a 

Reporting Bulgarian Financial Institution. The Bulgarian Competent 

Authority shall apply its domestic law (including applicable penalties) to 

address the significant non-compliance described in the notice. 

b) If such enforcement actions do not resolve the non-compliance within a period 

of 18 months after notification of significant non-compliance is first provided 

by the U.S. Competent Authority, the United States shall treat the Reporting 

Bulgarian Financial Institution as a Nonparticipating Financial Institution 

pursuant to this subparagraph 2(b).
3. Reliance on Third Party Service Providers. Bulgaria may allow Reporting 

Bulgarian Financial Institutions to use third party service providers to fulfill the obligations 

imposed on such Reporting Bulgarian Financial Institutions by Bulgaria, as contemplated in 

this Agreement, but these obligations shall remain the responsibility of the Reporting 

Bulgarian Financial Institutions.

4. Prevention of Avoidance. Bulgaria shall implement as necessary requirements to 

prevent Financial Institutions from adopting practices intended to circumvent the reporting 

required under this Agreement.

Article 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information 

Exchange and Transparency

1. Treatment of Passthru Payments and Gross Proceeds. The Parties are committed 

to work together, along with Partner Jurisdictions, to develop a practical and effective 

alternative approach to achieve the policy objectives of foreign passthru payment and gross 

proceeds withholding that minimizes burden. 

2. Documentation of Accounts Maintained as of June 30, 2014. With respect to U.S. 

Reportable Accounts maintained by a Reporting Bulgarian Financial Institution as of June 30, 

2014, Bulgaria commits to establish, by January 1, 2017, for reporting with respect to 2017 

and subsequent years, rules requiring Reporting Bulgarian Financial Institutions to obtain the 

U.S. TIN of each Specified U.S. Person as required pursuant to subparagraph 2(a) of Article 2 

of this Agreement.

Article 7

Consistency in the Application of FATCA to Partner Jurisdictions 

1. Bulgaria shall be granted the benefit of any more favorable terms under Article 4 or 

Annex I of this Agreement relating to the application of FATCA to Bulgarian Financial 

Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement 

pursuant to which the other Partner Jurisdiction commits to undertake the same obligations as 

Bulgaria described in Articles 2 and 3 of this Agreement, and subject to the same terms and 

conditions as described therein and in Articles 5 through 9 of this Agreement. 

2. The United States shall notify Bulgaria of any such more favorable terms, and such 

more favorable terms shall apply automatically under this Agreement as if such terms were 

specified in this Agreement and effective as of the date of the signing of the agreement 

incorporating the more favorable terms, unless Bulgaria declines in writing the application 

thereof.

Article 8

Consultations and Amendments

1. In case any difficulties in the implementation of this Agreement arise, either Party may 

request consultations to develop appropriate measures to ensure the fulfillment of this 

Agreement.
2. This Agreement may be amended by written mutual agreement of the Parties. Unless 

otherwise agreed upon, such an amendment shall enter into force through the same 

procedures as set forth in paragraph 1 of Article 10 of this Agreement.

Article 9

Annexes

The Annexes form an integral part of this Agreement.

Article 10

Term of Agreement

1. This Agreement shall enter into force on the date of Bulgaria’s written notification to 

the United States that Bulgaria has completed its necessary internal procedures for entry into 

force of this Agreement. 

2. Either Party may terminate this Agreement by giving notice of termination in writing 

to the other Party. Such termination shall become effective on the first day of the month 

following the expiration of a period of 12 months after the date of the notice of termination.

3. The Parties shall, prior to December 31, 2016, consult in good faith to amend this 

Agreement as necessary to reflect progress on the commitments set forth in Article 6 of this 

Agreement. 
In witness whereof, the undersigned, being duly authorized thereto by their respective 

Governments, have signed this Agreement. 

Done at [_____], in duplicate, in the English and Bulgarian languages, both texts being 

equally authentic, this [__] day of [_____], 20[__].

FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF THE 

REPUBLIC OF BULGARIA:
ANNEX I

DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. 

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS

2. General.

 

a) Bulgaria shall require that Reporting Bulgarian Financial Institutions apply the 

due diligence procedures contained in this Annex I to identify U.S. Reportable 

Accounts and accounts held by Nonparticipating Financial Institutions. 

b) For purposes of the Agreement,

(1) All dollar amounts are in U.S. dollars and shall be read to include the 

equivalent in other currencies.

(2) Except as otherwise provided herein, the balance or value of an 

account shall be determined as of the last day of the calendar year or other 

appropriate reporting period.

(3) Where a balance or value threshold is to be determined as of June 30, 

2014 under this Annex I, the relevant balance or value shall be determined as 

of that day or the last day of the reporting period ending immediately before 

June 30, 2014, and where a balance or value threshold is to be determined as 

of the last day of a calendar year under this Annex I, the relevant balance or 

value shall be determined as of the last day of the calendar year or other 

appropriate reporting period. 

(4) Subject to subparagraph E(1) of section II of this Annex I, an account 

shall be treated as a U.S. Reportable Account beginning as of the date it is 

identified as such pursuant to the due diligence procedures in this Annex I.

(5) Unless otherwise provided, information with respect to a U.S. 

Reportable Account shall be reported annually in the calendar year following 

the year to which the information relates.

 

c) As an alternative to the procedures described in each section of this Annex I, 

Bulgaria may permit Reporting Bulgarian Financial Institutions to rely on the 

procedures described in relevant U.S. Treasury Regulations to establish whether an 

account is a U.S. Reportable Account or an account held by a Nonparticipating 

Financial Institution. Bulgaria may permit Reporting Bulgarian Financial Institutions 

to make such election separately for each section of this Annex I either with respect to 

all relevant Financial Accounts or, separately, with respect to any clearly identified 

group of such accounts (such as by line of business or the location of where the 

account is maintained). 

3. Preexisting Individual Accounts. The following rules and procedures apply for 

purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by 

individuals (“Preexisting Individual Accounts”).
5. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless 

the Reporting Bulgarian Financial Institution elects otherwise, either with respect to 

all Preexisting Individual Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Bulgaria provide 

for such an election, the following Preexisting Individual Accounts are not required to 

be reviewed, identified, or reported as U.S. Reportable Accounts:

(1) Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account with a balance or value that does not exceed $50,000 as of June 30, 

2014.

(2) Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account that is a Cash Value Insurance Contract or an Annuity Contract with a 

balance or value of $250,000 or less as of June 30, 2014.

(3) A Preexisting Individual Account that is a Cash Value Insurance 

Contract or an Annuity Contract, provided the law or regulations of Bulgaria

or the United States effectively prevent the sale of such a Cash Value 

Insurance Contract or an Annuity Contract to U.S. residents (e.g., if the 

relevant Financial Institution does not have the required registration under 

U.S. law, and the law of Bulgaria requires reporting or withholding with 

respect to insurance products held by residents of Bulgaria).

(4) A Depository Account with a balance of $50,000 or less.

b) Review Procedures for Preexisting Individual Accounts With a Balance or 

Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash Value 

Insurance Contract or Annuity Contract), But Does Not Exceed $1,000,000 

(“Lower Value Accounts”).

(1) Electronic Record Search. The Reporting Bulgarian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Bulgarian Financial Institution for any of the following U.S. indicia:

(A) Identification of the Account Holder as a U.S. citizen or 

resident;

(B) Unambiguous indication of a U.S. place of birth;

(C) Current U.S. mailing or residence address (including a U.S. 

post office box);

(D) Current U.S. telephone number;

(E) Standing instructions to transfer funds to an account maintained 

in the United States;

(F) Currently effective power of attorney or signatory authority 

granted to a person with a U.S. address; or
(G) An “in-care-of” or “hold mail” address that is the sole address 

the Reporting Bulgarian Financial Institution has on file for the 

Account Holder. In the case of a Preexisting Individual Account that is 

a Lower Value Account, an “in-care-of” address outside the United 

States or “hold mail” address shall not be treated as U.S. indicia. 

(2) If none of the U.S. indicia listed in subparagraph B(1) of this section 

are discovered in the electronic search, then no further action is required until 

there is a change in circumstances that results in one or more U.S. indicia 

being associated with the account, or the account becomes a High Value 

Account described in paragraph D of this section.

(3) If any of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, or if there is a change in circumstances 

that results in one or more U.S. indicia being associated with the account, then 

the Reporting Bulgarian Financial Institution must treat the account as a U.S. 

Reportable Account unless it elects to apply subparagraph B(4) of this section 

and one of the exceptions in such subparagraph applies with respect to that 

account.

(4) Notwithstanding a finding of U.S. indicia under subparagraph B(1) of 

this section, a Reporting Bulgarian Financial Institution is not required to treat 

an account as a U.S. Reportable Account if:

(A) Where the Account Holder information unambiguously 

indicates a U.S. place of birth, the Reporting Bulgarian Financial 

Institution obtains, or has previously reviewed and maintains a record 

of: 

(i) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form);

(ii) A non-U.S. passport or other government-issued 

identification evidencing the Account Holder’s citizenship or 

nationality in a country other than the United States; and

(iii) A copy of the Account Holder’s Certificate of Loss of 

Nationality of the United States or a reasonable explanation of: 

(i) The reason the Account Holder does not have 

such a certificate despite relinquishing U.S. citizenship; 

or

(ii) The reason the Account Holder did not obtain 

U.S. citizenship at birth.

(B) Where the Account Holder information contains a current U.S. 

mailing or residence address, or one or more U.S. telephone numbers 
that are the only telephone numbers associated with the account, the 

Reporting Bulgarian Financial Institution obtains, or has previously 

reviewed and maintains a record of:

(i) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); and

(ii) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder’s 

non-U.S. status.

(C) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the United 

States, the Reporting Bulgarian Financial Institution obtains, or has 

previously reviewed and maintains a record of:

(i) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); and

(ii) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder’s 

non-U.S. status.

(D) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a person 

with a U.S. address, has an “in-care-of” address or “hold mail” 

address that is the sole address identified for the Account Holder, or 

has one or more U.S. telephone numbers (if a non-U.S. telephone 

number is also associated with the account), the Reporting Bulgarian

Financial Institution obtains, or has previously reviewed and maintains 

a record of:

(i) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be 

on an IRS Form W-8 or other similar agreed form); or

(ii) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder’s 

non-U.S. status.

c) Additional Procedures Applicable to Preexisting Individual Accounts 

That Are Lower Value Accounts.

(1) Review of Preexisting Individual Accounts that are Lower Value 

Accounts for U.S. indicia must be completed by June 30, 2016. 

(2) If there is a change of circumstances with respect to a Preexisting 

Individual Account that is a Lower Value Account that results in one or more 
U.S. indicia described in subparagraph B(1) of this section being associated 

with the account, then the Reporting Bulgarian Financial Institution must treat 

the account as a U.S. Reportable Account unless subparagraph B(4) of this 

section applies.

(3) Except for Depository Accounts described in subparagraph A(4) of this 

section, any Preexisting Individual Account that has been identified as a U.S. 

Reportable Account under this section shall be treated as a U.S. Reportable 

Account in all subsequent years, unless the Account Holder ceases to be a 

Specified U.S. Person.

d) Enhanced Review Procedures for Preexisting Individual Accounts With a 

Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31 of 

2015 or Any Subsequent Year (“High Value Accounts”).

(1) Electronic Record Search. The Reporting Bulgarian Financial 

Institution must review electronically searchable data maintained by the 

Reporting Bulgarian Financial Institution for any of the U.S. indicia described 

in subparagraph B(1) of this section.

(2) Paper Record Search. If the Reporting Bulgarian Financial 

Institution’s electronically searchable databases include fields for, and capture 

all of the information described in, subparagraph D(3) of this section, then no 

further paper record search is required. If the electronic databases do not 

capture all of this information, then with respect to a High Value Account, the 

Reporting Bulgarian Financial Institution must also review the current 

customer master file and, to the extent not contained in the current customer 

master file, the following documents associated with the account and obtained 

by the Reporting Bulgarian Financial Institution within the last five years for 

any of the U.S. indicia described in subparagraph B(1) of this section:

(A) The most recent documentary evidence collected with respect 

to the account;

(B) The most recent account opening contract or documentation;

(C) The most recent documentation obtained by the Reporting 

Bulgarian Financial Institution pursuant to AML/KYC Procedures or 

for other regulatory purposes;

(D) Any power of attorney or signature authority forms currently in 

effect; and

(E) Any standing instructions to transfer funds currently in effect.

(3) Exception Where Databases Contain Sufficient Information. A 

Reporting Bulgarian Financial Institution is not required to perform the paper 

record search described in subparagraph D(2) of this section if the Reporting 

Bulgarian Financial Institution’s electronically searchable information 

includes the following:
(A) The Account Holder’s nationality or residence status;

(B) The Account Holder’s residence address and mailing address 

currently on file with the Reporting Bulgarian Financial Institution;

(C) The Account Holder’s telephone number(s) currently on file, if 

any, with the Reporting Bulgarian Financial Institution; 

(D) Whether there are standing instructions to transfer funds in the 

account to another account (including an account at another branch of 

the Reporting Bulgarian Financial Institution or another Financial 

Institution);

(E) Whether there is a current “in-care-of” address or “hold mail” 

address for the Account Holder; and

(F) Whether there is any power of attorney or signatory authority 

for the account. 

(4) Relationship Manager Inquiry for Actual Knowledge. In addition 

to the electronic and paper record searches described above, the Reporting 

Bulgarian Financial Institution must treat as a U.S. Reportable Account any 

High Value Account assigned to a relationship manager (including any 

Financial Accounts aggregated with such High Value Account) if the 

relationship manager has actual knowledge that the Account Holder is a 

Specified U.S. Person.

(5) Effect of Finding U.S. Indicia.

(A) If none of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value Accounts 

described above, and the account is not identified as held by a 

Specified U.S. Person in subparagraph D(4) of this section, then no 

further action is required until there is a change in circumstances that 

results in one or more U.S. indicia being associated with the account.

(B) If any of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value Accounts 

described above, or if there is a subsequent change in circumstances 

that results in one or more U.S. indicia being associated with the 

account, then the Reporting Bulgarian Financial Institution must treat 

the account as a U.S. Reportable Account unless it elects to apply 

subparagraph B(4) of this section and one of the exceptions in such 

subparagraph applies with respect to that account.

(C) Except for Depository Accounts described in subparagraph 

A(4) of this section, any Preexisting Individual Account that has been 

identified as a U.S. Reportable Account under this section shall be 

treated as a U.S. Reportable Account in all subsequent years, unless the 
Account Holder ceases to be a Specified U.S. Person. 

e) Additional Procedures Applicable to High Value Accounts.

(1) If a Preexisting Individual Account is a High Value Account as of June 

30, 2014, the Reporting Bulgarian Financial Institution must complete the 

enhanced review procedures described in paragraph D of this section with 

respect to such account by June 30, 2015. If based on this review such 

account is identified as a U.S. Reportable Account on or before December 31, 

2014, the Reporting Bulgarian Financial Institution must report the required 

information about such account with respect to 2014 in the first report on the 

account and on an annual basis thereafter. In the case of an account identified 

as a U.S. Reportable Account after December 31, 2014 and on or before June 

30, 2015, the Reporting Bulgarian Financial Institution is not required to 

report information about such account with respect to 2014, but must report 

information about the account on an annual basis thereafter.

(2) If a Preexisting Individual Account is not a High Value Account as of 

June 30, 2014, but becomes a High Value Account as of the last day of 2015 or 

any subsequent calendar year, the Reporting Bulgarian Financial Institution 

must complete the enhanced review procedures described in paragraph D of 

this section with respect to such account within six months after the last day of 

the calendar year in which the account becomes a High Value Account. If 

based on this review such account is identified as a U.S. Reportable Account, 

the Reporting Bulgarian Financial Institution must report the required 

information about such account with respect to the year in which it is 

identified as a U.S. Reportable Account and subsequent years on an annual 

basis, unless the Account Holder ceases to be a Specified U.S. Person.

(3) Once a Reporting Bulgarian Financial Institution applies the enhanced 

review procedures described in paragraph D of this section to a High Value 

Account, the Reporting Bulgarian Financial Institution is not required to reapply such procedures, other than the relationship manager inquiry described 

in subparagraph D(4) of this section, to the same High Value Account in any 

subsequent year.

(4) If there is a change of circumstances with respect to a High Value 

Account that results in one or more U.S. indicia described in subparagraph 

B(1) of this section being associated with the account, then the Reporting 

Bulgarian Financial Institution must treat the account as a U.S. Reportable 

Account unless it elects to apply subparagraph B(4) of this section and one of 

the exceptions in such subparagraph applies with respect to that account.

(5) A Reporting Bulgarian Financial Institution must implement 

procedures to ensure that a relationship manager identifies any change in 

circumstances of an account. For example, if a relationship manager is 

notified that the Account Holder has a new mailing address in the United 

States, the Reporting Bulgarian Financial Institution is required to treat the 

new address as a change in circumstances and, if it elects to apply 

subparagraph B(4) of this section, is required to obtain the appropriate 
documentation from the Account Holder.

f) Preexisting Individual Accounts That Have Been Documented for Certain 

Other Purposes. A Reporting Bulgarian Financial Institution that has previously 

obtained documentation from an Account Holder to establish the Account Holder’s 

status as neither a U.S. citizen nor a U.S. resident in order to meet its obligations 

under a qualified intermediary, withholding foreign partnership, or withholding 

foreign trust agreement with the IRS, or to fulfill its obligations under chapter 61 of 

Title 26 of the United States Code, is not required to perform the procedures described 

in subparagraph B(1) of this section with respect to Lower Value Accounts or 

subparagraphs D(1) through D(3) of this section with respect to High Value Accounts.

4. New Individual Accounts. The following rules and procedures apply for purposes 

of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and 

opened on or after July 1, 2014 (“New Individual Accounts”).

a) Accounts Not Required to Be Reviewed, Identified, or Reported. Unless 

the Reporting Bulgarian Financial Institution elects otherwise, either with respect to 

all New Individual Accounts or, separately, with respect to any clearly identified 

group of such accounts, where the implementing rules in Bulgaria provide for such an 

election, the following New Individual Accounts are not required to be reviewed, 

identified, or reported as U.S. Reportable Accounts:

(1) A Depository Account unless the account balance exceeds $50,000 at 

the end of any calendar year or other appropriate reporting period. 

(2) A Cash Value Insurance Contract unless the Cash Value exceeds 

$50,000 at the end of any calendar year or other appropriate reporting period. 

b) Other New Individual Accounts. With respect to New Individual Accounts 

not described in paragraph A of this section, upon account opening (or within 90 days 

after the end of the calendar year in which the account ceases to be described in 

paragraph A of this section), the Reporting Bulgarian Financial Institution must obtain 

a self-certification, which may be part of the account opening documentation, that 

allows the Reporting Bulgarian Financial Institution to determine whether the 

Account Holder is resident in the United States for tax purposes (for this purpose, a 

U.S. citizen is considered to be resident in the United States for tax purposes, even if 

the Account Holder is also a tax resident of another jurisdiction) and confirm the 

reasonableness of such self-certification based on the information obtained by the 

Reporting Bulgarian Financial Institution in connection with the opening of the 

account, including any documentation collected pursuant to AML/KYC Procedures.

(1) If the self-certification establishes that the Account Holder is resident 

in the United States for tax purposes, the Reporting Bulgarian Financial 

Institution must treat the account as a U.S. Reportable Account and obtain a 

self-certification that includes the Account Holder’s U.S. TIN (which may be 

an IRS Form W-9 or other similar agreed form).

(2) If there is a change of circumstances with respect to a New Individual 

Account that causes the Reporting Bulgarian Financial Institution to know, or 
have reason to know, that the original self-certification is incorrect or 

unreliable, the Reporting Bulgarian Financial Institution cannot rely on the 

original self-certification and must obtain a valid self-certification that 

establishes whether the Account Holder is a U.S. citizen or resident for U.S. 

tax purposes. If the Reporting Bulgarian Financial Institution is unable to 

obtain a valid self-certification, the Reporting Bulgarian Financial Institution 

must treat the account as a U.S. Reportable Account.

5. Preexisting Entity Accounts. The following rules and procedures apply for purposes 

of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Preexisting Accounts held by Entities (“Preexisting Entity Accounts”).

a) Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Bulgarian Financial Institution elects otherwise, either with 

respect to all Preexisting Entity Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Bulgaria provide 

for such an election, a Preexisting Entity Account with an account balance or value 

that does not exceed $250,000 as of June 30, 2014, is not required to be reviewed, 

identified, or reported as a U.S. Reportable Account until the account balance or value 

exceeds $1,000,000.

 

b) Entity Accounts Subject to Review. A Preexisting Entity Account that has 

an account balance or value that exceeds $250,000 as of June 30, 2014, and a 

Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014 but the 

account balance or value of which exceeds $1,000,000 as of the last day of 2015 or 

any subsequent calendar year, must be reviewed in accordance with the procedures set 

forth in paragraph D of this section. 

c) Entity Accounts With Respect to Which Reporting Is Required. With 

respect to Preexisting Entity Accounts described in paragraph B of this section, only 

accounts that are held by one or more Entities that are Specified U.S. Persons, or by 

Passive NFFEs with one or more Controlling Persons who are U.S. citizens or 

residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held by 

Nonparticipating Financial Institutions shall be treated as accounts for which 

aggregate payments as described in subparagraph 1(b) of Article 4 of the Agreement 

are reported to the Bulgarian Competent Authority.

d) Review Procedures for Identifying Entity Accounts With Respect to 

Which Reporting Is Required. For Preexisting Entity Accounts described in 

paragraph B of this section, the Reporting Bulgarian Financial Institution must apply 

the following review procedures to determine whether the account is held by one or 

more Specified U.S. Persons, by Passive NFFEs with one or more Controlling 

Persons who are U.S. citizens or residents, or by Nonparticipating Financial 

Institutions: 

(1) Determine Whether the Entity Is a Specified U.S. Person.

(A) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 
indicates that the Account Holder is a U.S. Person. For this purpose, 

information indicating that the Account Holder is a U.S. Person 

includes a U.S. place of incorporation or organization, or a U.S. 

address.

(B) If the information indicates that the Account Holder is a U.S. 

Person, the Reporting Bulgarian Financial Institution must treat the 

account as a U.S. Reportable Account unless it obtains a selfcertification from the Account Holder (which may be on an IRS Form 

W-8 or W-9, or a similar agreed form), or reasonably determines based 

on information in its possession or that is publicly available, that the 

Account Holder is not a Specified U.S. Person.

(2) Determine Whether a Non-U.S. Entity Is a Financial Institution.

(A) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a Financial Institution.

(B) If the information indicates that the Account Holder is a 

Financial Institution, or the Reporting Bulgarian Financial Institution 

verifies the Account Holder’s Global Intermediary Identification 

Number on the published IRS FFI list, then the account is not a U.S. 

Reportable Account. 

(3) Determine Whether a Financial Institution Is a Nonparticipating 

Financial Institution Payments to Which Are Subject to Aggregate 

Reporting Under Subparagraph 1(b) of Article 4 of the Agreement.

(A) Subject to subparagraph D(3)(b) of this section, a Reporting 

Bulgarian Financial Institution may determine that the Account Holder 

is a Bulgarian Financial Institution or other Partner Jurisdiction 

Financial Institution if the Reporting Bulgarian Financial Institution 

reasonably determines that the Account Holder has such status on the 

basis of the Account Holder’s Global Intermediary Identification 

Number on the published IRS FFI list or other information that is 

publicly available or in the possession of the Reporting Bulgarian

Financial Institution, as applicable. In such case, no further review, 

identification, or reporting is required with respect to the account. 

(B) If the Account Holder is a Bulgarian Financial Institution or 

other Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be 

reported as contemplated in subparagraph 1(b) of Article 4 of the 

Agreement. 

(C) If the Account Holder is not a Bulgarian Financial Institution or 

other Partner Jurisdiction Financial Institution, then the Reporting 
Bulgarian Financial Institution must treat the Account Holder as a 

Nonparticipating Financial Institution payments to which are 

reportable under subparagraph 1(b) of Article 4 of the Agreement, 

unless the Reporting Bulgarian Financial Institution:

(i) Obtains a self-certification (which may be on an IRS 

Form W-8 or similar agreed form) from the Account Holder 

that it is a certified deemed-compliant FFI, or an exempt 

beneficial owner, as those terms are defined in relevant U.S. 

Treasury Regulations; or

(ii) In the case of a participating FFI or registered deemedcompliant FFI, verifies the Account Holder’s Global 

Intermediary Identification Number on the published IRS FFI 

list.

(4) Determine Whether an Account Held by an NFFE Is a U.S. 

Reportable Account. With respect to an Account Holder of a Preexisting 

Entity Account that is not identified as either a U.S. Person or a Financial 

Institution, the Reporting Bulgarian Financial Institution must identify (i) 

whether the Account Holder has Controlling Persons, (ii) whether the Account 

Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of 

the Account Holder is a U.S. citizen or resident. In making these 

determinations the Reporting Bulgarian Financial Institution must follow the 

guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order 

most appropriate under the circumstances.

(A) For purposes of determining the Controlling Persons of an 

Account Holder, a Reporting Bulgarian Financial Institution may rely 

on information collected and maintained pursuant to AML/KYC 

Procedures.

(B) For purposes of determining whether the Account Holder is a 

Passive NFFE, the Reporting Bulgarian Financial Institution must 

obtain a self-certification (which may be on an IRS Form W-8 or W-9, 

or on a similar agreed form) from the Account Holder to establish its 

status, unless it has information in its possession or that is publicly 

available, based on which it can reasonably determine that the Account 

Holder is an Active NFFE.

(C) For purposes of determining whether a Controlling Person of a 

Passive NFFE is a U.S. citizen or resident for tax purposes, a 

Reporting Bulgarian Financial Institution may rely on: 

(i) Information collected and maintained pursuant to 

AML/KYC Procedures in the case of a Preexisting Entity 

Account held by one or more NFFEs with an account balance 

or value that does not exceed $1,000,000; or

(ii) A self-certification (which may be on an IRS Form W-8 
or W-9, or on a similar agreed form) from the Account Holder 

or such Controlling Person in the case of a Preexisting Entity 

Account held by one or more NFFEs with an account balance 

or value that exceeds $1,000,000. 

(D) If any Controlling Person of a Passive NFFE is a U.S. citizen or 

resident, the account shall be treated as a U.S. Reportable Account.

e) Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts.

(1) Review of Preexisting Entity Accounts with an account balance or 

value that exceeds $250,000 as of June 30, 2014 must be completed by June 

30, 2016.

(2) Review of Preexisting Entity Accounts with an account balance or 

value that does not exceed $250,000 as of June 30, 2014, but exceeds 

$1,000,000 as of December 31 of 2015 or any subsequent year, must be 

completed within six months after the last day of the calendar year in which 

the account balance or value exceeds $1,000,000.

(3) If there is a change of circumstances with respect to a Preexisting 

Entity Account that causes the Reporting Bulgarian Financial Institution to 

know, or have reason to know, that the self-certification or other 

documentation associated with an account is incorrect or unreliable, the 

Reporting Bulgarian Financial Institution must redetermine the status of the 

account in accordance with the procedures set forth in paragraph D of this 

section.

6. New Entity Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 

(“New Entity Accounts”). 

a) Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Bulgarian Financial Institution elects otherwise, either with 

respect to all New Entity Accounts or, separately, with respect to any clearly identified 

group of such accounts, where the implementing rules in Bulgaria provide for such 

election, a credit card account or a revolving credit facility treated as a New Entity 

Account is not required to be reviewed, identified, or reported, provided that the 

Reporting Bulgarian Financial Institution maintaining such account implements 

policies and procedures to prevent an account balance owed to the Account Holder 

that exceeds $50,000.

b) Other New Entity Accounts. With respect to New Entity Accounts not 

described in paragraph A of this section, the Reporting Bulgarian Financial Institution 

must determine whether the Account Holder is: (i) a Specified U.S. Person; (ii) a 

Bulgarian Financial Institution or other Partner Jurisdiction Financial Institution; (iii) 

a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those 

terms are defined in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or 
Passive NFFE. 

(1) Subject to subparagraph B(2) of this section, a Reporting Bulgarian

Financial Institution may determine that the Account Holder is an Active 

NFFE, a Bulgarian Financial Institution, or other Partner Jurisdiction Financial 

Institution if the Reporting Bulgarian Financial Institution reasonably 

determines that the Account Holder has such status on the basis of the Account 

Holder’s Global Intermediary Identification Number or other information that 

is publicly available or in the possession of the Reporting Bulgarian Financial 

Institution, as applicable. 

3. If the Account Holder is a Bulgarian Financial Institution or other 

Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be reported as 

contemplated in subparagraph 1(b) of Article 4 of the Agreement.

4. In all other cases, a Reporting Bulgarian Financial Institution must 

obtain a self-certification from the Account Holder to establish the Account 

Holder’s status. Based on the self-certification, the following rules apply:

 

5. If the Account Holder is a Specified U.S. Person, the Reporting 

Bulgarian Financial Institution must treat the account as a U.S. 

Reportable Account.

6. If the Account Holder is a Passive NFFE, the Reporting 

Bulgarian Financial Institution must identify the Controlling Persons 

as determined under AML/KYC Procedures, and must determine 

whether any such person is a U.S. citizen or resident on the basis of a 

self-certification from the Account Holder or such person. If any such 

person is a U.S. citizen or resident, the Reporting Bulgarian Financial 

Institution must treat the account as a U.S. Reportable Account.

7. If the Account Holder is: (i) a U.S. Person that is not a 

Specified U.S. Person; (ii) subject to subparagraph B(3)(d) of this 

section, a Bulgarian Financial Institution or other Partner Jurisdiction 

Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, 

or an exempt beneficial owner, as those terms are defined in relevant 

U.S. Treasury Regulations; (iv) an Active NFFE; or (v) a Passive 

NFFE none of the Controlling Persons of which is a U.S. citizen or 

resident, then the account is not a U.S. Reportable Account, and no 

reporting is required with respect to the account.

8. If the Account Holder is a Nonparticipating Financial 

Institution (including a Bulgarian Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution), then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be 

reported as contemplated in subparagraph 1(b) of Article 4 of the 

Agreement.
4. Special Rules and Definitions. The following additional rules and definitions apply 

in implementing the due diligence procedures described above:

a) Reliance on Self-Certifications and Documentary Evidence. A Reporting 

Bulgarian Financial Institution may not rely on a self-certification or documentary 

evidence if the Reporting Bulgarian Financial Institution knows or has reason to know 

that the self-certification or documentary evidence is incorrect or unreliable.

b) Definitions. The following definitions apply for purposes of this Annex I.

3. AML/KYC Procedures. “AML/KYC Procedures” means the customer 

due diligence procedures of a Reporting Bulgarian Financial Institution 

pursuant to the anti-money laundering or similar requirements of 

Bulgarian to which such Reporting Bulgarian Financial Institution is 

subject. 

4. NFFE. An “NFFE” means any Non-U.S. Entity that is not an FFI as 

defined in relevant U.S. Treasury Regulations or is an Entity described in 

subparagraph B(4)(j) of this section, and also includes any Non-U.S. 

Entity that is established in Bulgaria or another Partner Jurisdiction and 

that is not a Financial Institution.

5. Passive NFFE. A “Passive NFFE” means any NFFE that is not (i) an 

Active NFFE, or (ii) a withholding foreign partnership or withholding 

foreign trust pursuant to relevant U.S. Treasury Regulations.

6. Active NFFE. An “Active NFFE” means any NFFE that meets any of the 

following criteria:

a) Less than 50 percent of the NFFE’s gross income for the preceding 

calendar year or other appropriate reporting period is passive 

income and less than 50 percent of the assets held by the NFFE 

during the preceding calendar year or other appropriate reporting 

period are assets that produce or are held for the production of 

passive income;

b) The stock of the NFFE is regularly traded on an established 

securities market or the NFFE is a Related Entity of an Entity the 

stock of which is regularly traded on an established securities 

market;

c) The NFFE is organized in a U.S. Territory and all of the owners of 

the payee are bona fide residents of that U.S. Territory;

d) The NFFE is a government (other than the U.S. government), a 

political subdivision of such government (which, for the avoidance 

of doubt, includes a state, province, county, or municipality), or a 

public body performing a function of such government or a 

political subdivision thereof, a government of a U.S. Territory, an 
international organization, a non-U.S. central bank of issue, or an 

Entity wholly owned by one or more of the foregoing; 

e) Substantially all of the activities of the NFFE consist of holding (in 

whole or in part) the outstanding stock of, or providing financing 

and services to, one or more subsidiaries that engage in trades or 

businesses other than the business of a Financial Institution, except 

that an entity shall not qualify for NFFE status if the entity 

functions (or holds itself out) as an investment fund, such as a 

private equity fund, venture capital fund, leveraged buyout fund, or 

any investment vehicle whose purpose is to acquire or fund 

companies and then hold interests in those companies as capital 

assets for investment purposes;

f) The NFFE is not yet operating a business and has no prior 

operating history, but is investing capital into assets with the intent 

to operate a business other than that of a Financial Institution, 

provided that the NFFE shall not qualify for this exception after the 

date that is 24 months after the date of the initial organization of 

the NFFE;

g) The NFFE was not a Financial Institution in the past five years, and 

is in the process of liquidating its assets or is reorganizing with the 

intent to continue or recommence operations in a business other 

than that of a Financial Institution;

h) The NFFE primarily engages in financing and hedging transactions 

with, or for, Related Entities that are not Financial Institutions, and 

does not provide financing or hedging services to any Entity that is 

not a Related Entity, provided that the group of any such Related 

Entities is primarily engaged in a business other than that of a 

Financial Institution;

i) The NFFE is an “excepted NFFE” as described in relevant U.S. 

Treasury Regulations; or

j) The NFFE meets all of the following requirements:

(1) It is established and operated in its jurisdiction of 

residence exclusively for religious, charitable, scientific, 

artistic, cultural, athletic, or educational purposes; or it is 

established and operated in its jurisdiction of residence and it 

is a professional organization, business league, chamber of 

commerce, labor organization, agricultural or horticultural 

organization, civic league or an organization operated 

exclusively for the promotion of social welfare;

(2) It is exempt from income tax in its jurisdiction of 

residence; 
(3) It has no shareholders or members who have a 

proprietary or beneficial interest in its income or assets;

(4) The applicable laws of the NFFE’s jurisdiction of 

residence or the NFFE’s formation documents do not permit 

any income or assets of the NFFE to be distributed to, or 

applied for the benefit of, a private person or non-charitable 

Entity other than pursuant to the conduct of the NFFE’s 

charitable activities, or as payment of reasonable 

compensation for services rendered, or as payment 

representing the fair market value of property which the 

NFFE has purchased; and

(5) The applicable laws of the NFFE’s jurisdiction of 

residence or the NFFE’s formation documents require that, 

upon the NFFE’s liquidation or dissolution, all of its assets be 

distributed to a governmental entity or other non-profit 

organization, or escheat to the government of the NFFE’s 

jurisdiction of residence or any political subdivision thereof.

7. Preexisting Account. A “Preexisting Account” means a Financial 

Account maintained by a Reporting Bulgarian Financial Institution as of 

June 30, 2014.

c) Account Balance Aggregation and Currency Translation Rules.

(1) Aggregation of Individual Accounts. For purposes of determining 

the aggregate balance or value of Financial Accounts held by an individual, a 

Reporting Bulgarian Financial Institution is required to aggregate all Financial 

Accounts maintained by the Reporting Bulgarian Financial Institution, or by a 

Related Entity, but only to the extent that the Reporting Bulgarian Financial 

Institution’s computerized systems link the Financial Accounts by reference to 

a data element such as client number or taxpayer identification number, and 

allow account balances or values to be aggregated. Each holder of a jointly 

held Financial Account shall be attributed the entire balance or value of the 

jointly held Financial Account for purposes of applying the aggregation 

requirements described in this paragraph 1. 

(2) Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a 

Reporting Bulgarian Financial Institution is required to take into account all 

Financial Accounts that are maintained by the Reporting Bulgarian Financial 

Institution, or by a Related Entity, but only to the extent that the Reporting 

Bulgarian Financial Institution’s computerized systems link the Financial 

Accounts by reference to a data element such as client number or taxpayer 

identification number, and allow account balances or values to be aggregated. 

(3) Special Aggregation Rule Applicable to Relationship Managers. 

For purposes of determining the aggregate balance or value of Financial 

Accounts held by a person to determine whether a Financial Account is a High 

Value Account, a Reporting Bulgarian Financial Institution is also required, in 
the case of any Financial Accounts that a relationship manager knows, or has 

reason to know, are directly or indirectly owned, controlled, or established 

(other than in a fiduciary capacity) by the same person, to aggregate all such 

accounts.

(4) Currency Translation Rule. For purposes of determining the balance 

or value of Financial Accounts denominated in a currency other than the U.S. 

dollar, a Reporting Bulgarian Financial Institution must convert the U.S. dollar 

threshold amounts described in this Annex I into such currency using a 

published spot rate determined as of the last day of the calendar year 

preceding the year in which the Reporting Bulgarian Financial Institution is 

determining the balance or value.

h) Documentary Evidence. For purposes of this Annex I, acceptable 

documentary evidence includes any of the following:

(1) A certificate of residence issued by an authorized government body 

(for example, a government or agency thereof, or a municipality) of the 

jurisdiction in which the payee claims to be a resident.

(2) With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency thereof, or 

a municipality), that includes the individual’s name and is typically used for 

identification purposes.

(3) With respect to an Entity, any official documentation issued by an 

authorized government body (for example, a government or agency thereof, or 

a municipality) that includes the name of the Entity and either the address of 

its principal office in the jurisdiction (or U.S. Territory) in which it claims to 

be a resident or the jurisdiction (or U.S. Territory) in which the Entity was 

incorporated or organized.

(4) With respect to a Financial Account maintained in a jurisdiction with 

anti-money laundering rules that have been approved by the IRS in connection 

with a QI agreement (as described in relevant U.S. Treasury Regulations), any 

of the documents, other than a Form W-8 or W-9, referenced in the 

jurisdiction’s attachment to the QI agreement for identifying individuals or 

Entities.

(5) Any financial statement, third-party credit report, bankruptcy filing, or 

U.S. Securities and Exchange Commission report.

i) Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting Bulgarian

Financial Institution may presume that an individual beneficiary (other than the 

owner) of a Cash Value Insurance Contract receiving a death benefit is not a Specified 

U.S. Person and may treat such Financial Account as other than a U.S. Reportable 

Account unless the Reporting Bulgarian Financial Institution has actual knowledge, or 

reason to know, that the beneficiary is a Specified U.S. Person. A Reporting 

Bulgarian Financial Institution has reason to know that a beneficiary of a Cash Value 
Insurance Contract is a Specified U.S. Person if the information collected by the 

Reporting Bulgarian Financial Institution and associated with the beneficiary contains 

U.S. indicia as described in subparagraph (B)(1) of section II of this Annex I. If a 

Reporting Bulgarian Financial Institution has actual knowledge, or reason to know, 

that the beneficiary is a Specified U.S. Person, the Reporting Bulgarian Financial 

Institution must follow the procedures in subparagraph B(3) of section II of this 

Annex I.

j) Reliance on Third Parties. Regardless of whether an election is made under 

paragraph C of section I of this Annex I, Bulgaria may permit Reporting Bulgarian

Financial Institutions to rely on due diligence procedures performed by third parties, 

to the extent provided in relevant U.S. Treasury Regulations.

G. Alternative Procedures for New Accounts Opened Prior to Entry Into 

Force of this Agreement.

1. Applicability. If Bulgaria has provided a written notice to the United 

States prior to entry into force of this Agreement that, as of July 1, 2014, 

Bulgaria lacked the legal authority to require Reporting Bulgarian Financial 

Institutions either: (i) to require Account Holders of New Individual Accounts 

to provide the self-certification specified in section III of this Annex I, or (ii) 

to perform all the due diligence procedures related to New Entity Accounts 

specified in section V of this Annex I, then Reporting Bulgarian Financial 

Institutions may apply the alternative procedures described in subparagraph 

G(2) of this section, as applicable, to such New Accounts, in lieu of the 

procedures otherwise required under this Annex I. The alternative procedures 

described in subparagraph G(2) of this section shall be available only for those 

New Individual Accounts or New Entity Accounts, as applicable, opened prior 

to the earlier of: (i) the date Bulgaria has the ability to compel Reporting 

Bulgarian Financial Institutions to comply with the due diligence procedures 

described in section III or section V of this Annex I, as applicable, which date 

Bulgaria shall inform the United States of in writing by the date of entry into 

force of this Agreement, or (ii) the date of entry into force of this Agreement. 

If the alternative procedures for New Entity Accounts opened on or after July 

1, 2014, and before January 1, 2015, described in paragraph H of this section 

are applied with respect to all New Entity Accounts or a clearly identified 

group of such accounts, the alternative procedures described in this paragraph 

G may not be applied with respect to such New Entity Accounts. For all other 

New Accounts, Reporting Bulgarian Financial Institutions must apply the due 

diligence procedures described in section III or section V of this Annex I, as 

applicable, to determine if the account is a U.S. Reportable Account or an 

account held by a Nonparticipating Financial Institution.

2. Alternative Procedures. 

a) Within one year after the date of entry into force of this 

Agreement, Reporting Bulgarian Financial Institutions must: (i) with 

respect to a New Individual Account described in subparagraph G(1) 

of this section, request the self-certification specified in section III of 

this Annex I and confirm the reasonableness of such self-certification 
consistent with the procedures described in section III of this Annex I, 

and (ii) with respect to a New Entity Account described in 

subparagraph G(1) of this section, perform the due diligence 

procedures specified in section V of this Annex I and request 

information as necessary to document the account, including any selfcertification, required by section V of this Annex I. 

b) Bulgaria must report on any New Account that is identified 

pursuant to subparagraph G(2)(a) of this section as a U.S. Reportable 

Account or as an account held by a Nonparticipating Financial 

Institution, as applicable, by the date that is the later of: (i) September 

30 next following the date that the account is identified as a U.S. 

Reportable Account or as an account held by a Nonparticipating 

Financial Institution, as applicable, or (ii) 90 days after the account is 

identified as a U.S. Reportable Account or as an account held by a 

Nonparticipating Financial Institution, as applicable. The information 

required to be reported with respect to such a New Account is any 

information that would have been reportable under this Agreement if 

the New Account had been identified as a U.S. Reportable Account or 

as an account held by a Nonparticipating Financial Institution, as 

applicable, as of the date the account was opened.

c) By the date that is one year after the date of entry into force of 

this Agreement, Reporting Bulgarian Financial Institutions must close 

any New Account described in subparagraph G(1) of this section for 

which it was unable to collect the required self-certification or other 

documentation pursuant to the procedures described in subparagraph 

G(2)(a) of this section. In addition, by the date that is one year after 

the date of entry into force of this Agreement, Reporting Bulgarian

Financial Institutions must: (i) with respect to such closed accounts 

that prior to such closure were New Individual Accounts (without 

regard to whether such accounts were High Value Accounts), perform 

the due diligence procedures specified in paragraph D of section II of 

this Annex I, or (ii) with respect to such closed accounts that prior to 

such closure were New Entity Accounts, perform the due diligence 

procedures specified in section IV of this Annex I.

d) Bulgaria must report on any closed account that is identified 

pursuant to subparagraph G(2)(c) of this section as a U.S. Reportable 

Account or as an account held by a Nonparticipating Financial 

Institution, as applicable, by the date that is the later of: (i) September 

30 next following the date that the account is identified as a U.S. 

Reportable Account or as an account held by a Nonparticipating 

Financial Institution, as applicable, or (ii) 90 days after the account is 

identified as a U.S. Reportable Account or as an account held by a 

Nonparticipating Financial Institution, as applicable. The information 

required to be reported for such a closed account is any information 

that would have been reportable under this Agreement if the account 

had been identified as a U.S. Reportable Account or as an account held 
by a Nonparticipating Financial Institution, as applicable, as of the date 

the account was opened.

H. Alternative Procedures for New Entity Accounts Opened on or after July 

1, 2014, and before January 1, 2015. For New Entity Accounts opened on or after 

July 1, 2014, and before January 1, 2015, either with respect to all New Entity 

Accounts or, separately, with respect to any clearly identified group of such accounts, 

Bulgaria may permit Reporting Bulgarian Financial Institutions to treat such accounts 

as Preexisting Entity Accounts and apply the due diligence procedures related to 

Preexisting Entity Accounts specified in section IV of this Annex I in lieu of the due 

diligence procedures specified in section V of this Annex I. In this case, the due 

diligence procedures of section IV of this Annex I must be applied without regard to 

the account balance or value threshold specified in paragraph A of section IV of this 

Annex I.
Annex II

The following Entities shall be treated as exempt beneficial owners or deemed-compliant 

FFIs, as the case may be, and the following accounts are excluded from the definition of 

Financial Accounts.

This Annex II may be modified by a mutual written decision entered into between the 

Competent Authorities of Bulgaria and the United States: (1) to include additional Entities 

and accounts that present a low risk of being used by U.S. Persons to evade U.S. tax and that 

have similar characteristics to the Entities and accounts described in this Annex II as of the 

date of signature of the Agreement; or (2) to remove Entities and accounts that, due to 

changes in circumstances, no longer present a low risk of being used by U.S. Persons to

evade U.S. tax. Any such addition or removal shall be effective on the date of signature of 

the mutual decision, unless otherwise provided therein. Procedures for reaching such a 

mutual decision may be included in the mutual agreement or arrangement described in 

paragraph 6 of Article 3 of the Agreement. 

I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated 

as Non-Reporting Bulgarian Financial Institutions and as exempt beneficial owners for 

purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, other than with 

respect to a payment that is derived from an obligation held in connection with a 

commercial financial activity of a type engaged in by a Specified Insurance Company, 

Custodial Institution, or Depository Institution. 

A. Governmental Entity. The government of Bulgaria, any political subdivision of 

Bulgaria (which, for the avoidance of doubt, includes a state, province, county, or 

municipality), or any wholly owned agency or instrumentality of Bulgaria or any one 

or more of the foregoing (each, a “Bulgarian Governmental Entity”). This category is 

comprised of the integral parts, controlled entities, and political subdivisions of 

Bulgaria. 

1. An integral part of Bulgaria means any person, organization, agency, bureau, fund, 

instrumentality, or other body, however designated, that constitutes a governing 

authority of Bulgaria. The net earnings of the governing authority must be 

credited to its own account or to other accounts of Bulgaria, with no portion 

inuring to the benefit of any private person. An integral part does not include any 

individual who is a sovereign, official, or administrator acting in a private or 

personal capacity. 

2. A controlled entity means an Entity that is separate in form from Bulgaria or that 

otherwise constitutes a separate juridical entity, provided that:

a) The Entity is wholly owned and controlled by one or more Bulgarian

Governmental Entities directly or through one or more controlled entities; 

b) The Entity’s net earnings are credited to its own account or to the accounts of 

one or more Bulgarian Governmental Entities, with no portion of its income 

inuring to the benefit of any private person; and 
c) The Entity’s assets vest in one or more Bulgarian Governmental Entities upon 

dissolution. 

3. Income does not inure to the benefit of private personsif such persons are the 

intended beneficiaries of a governmental program, and the program activities are 

performed for the general public with respect to the common welfare or relate to 

the administration of some phase of government. Notwithstanding the foregoing, 

however, income is considered to inure to the benefit of private persons if the 

income is derived from the use of a governmental entity to conduct a commercial 

business, such as a commercial banking business, that provides financial services 

to private persons.

B. International Organization. Any international organization or wholly owned 

agency or instrumentality thereof. This category includes any intergovernmental 

organization (including a supranational organization) (1) that is comprised primarily 

of non-U.S. governments; (2) that has in effect a headquarters agreement with 

Bulgaria; and (3) the income of which does not inure to the benefit of private persons.

C. Central Bank. An institution that is by law or government sanction the principal 

authority, other than the government of Bulgaria itself, issuing instruments intended to 

circulate as currency. Such an institution may include an instrumentality that is 

separate from the government of Bulgaria, whether or not owned in whole or in part 

Bulgaria.

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be 

treated as Non-Reporting Bulgarian Financial Institutions and as exempt beneficial 

owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code.

A. Treaty-Qualified Retirement Fund. A fund established in Bulgaria, provided that 

the fund is entitled to benefits under an income tax treaty between Bulgaria and the 

United States on income that it derives from sources within the United States (or 

would be entitled to such benefits if it derived any such income) as a resident of 

Bulgaria that satisfies any applicable limitation on benefits requirement, and is 

operated principally to administer or provide pension or retirement benefits.

B. Broad Participation Retirement Fund. A fund established in Bulgaria to provide 

retirement, disability, or death benefits, or any combination thereof, to beneficiaries 

that are current or former employees (or persons designated by such employees) of 

one or more employers in consideration for services rendered, provided that the fund:

1. Does not have a single beneficiary with a right to more than five percent of the 

fund’s assets; 

2. Is subject to government regulation and provides annual information reporting 

about its beneficiaries to the relevant tax authorities in Bulgaria; and 

3. Satisfies at least one of the following requirements: 

a) The fund is generally exempt from tax in Bulgaria on investment income 

under the laws of Bulgaria due to its status as a retirement or pension plan; 
b) The fund receives at least 50 percent of its total contributions (other than 

transfers of assets from other plans described in paragraphs A through D of 

this section or from retirement and pension accounts described in 

subparagraph A(1) of section V of this Annex II) from the sponsoring 

employers; 

c) Distributions or withdrawals from the fund are allowed only upon the 

occurrence of specified events related to retirement, disability, or death (except 

rollover distributions to other retirement funds described in paragraphs A 

through D of this section or retirement and pension accounts described in 

subparagraph A(1) of section V of this Annex II), or penalties apply to 

distributions or withdrawals made before such specified events; or

d) Contributions (other than certain permitted make-up contributions) by 

employees to the fund are limited by reference to earned income of the 

employee or may not exceed $50,000 annually, applying the rules set forth in 

Annex I for account aggregation and currency translation.

C. Narrow Participation Retirement Fund. A fund established in Bulgaria to provide 

retirement, disability, or death benefits to beneficiaries that are current or former 

employees (or persons designated by such employees) of one or more employers in 

consideration for services rendered, provided that:

1. The fund has fewer than 50 participants; 

2. The fund is sponsored by one or more employers that are not Investment Entities 

or Passive NFFEs; 

3. The employee and employer contributions to the fund (other than transfers of 

assets from treaty-qualified retirement funds described in paragraph A of this 

section or retirement and pension accounts described in subparagraph A(1) of 

section V of this Annex II) are limited by reference to earned income and 

compensation of the employee, respectively; 

4. Participants that are not residents of Bulgaria are not entitled to more than 20 

percent of the fund’s assets; and 

5. The fund is subject to government regulation and provides annual information 

reporting about its beneficiaries to the relevant tax authorities in Bulgaria.

D. Pension Fund of an Exempt Beneficial Owner. A fund established in Bulgaria by 

an exempt beneficial owner to provide retirement, disability, or death benefits to 

beneficiaries or participants that are current or former employees of the exempt 

beneficial owner (or persons designated by such employees), or that are not current or 

former employees, if the benefits provided to such beneficiaries or participants are in 

consideration of personal services performed for the exempt beneficial owner.

E. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity that is 

a Bulgarian Financial Institution solely because it is an Investment Entity, provided 
that each direct holder of an Equity Interest in the Entity is an exempt beneficial 

owner, and each direct holder of a debt interest in such Entity is either a Depository 

Institution (with respect to a loan made to such Entity) or an exempt beneficial owner.

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant 

FFIs. The following Financial Institutions are Non-Reporting Bulgarian Financial 

Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 

of the U.S. Internal Revenue Code. 

A. Financial Institution with a Local Client Base. A Financial Institution satisfying 

the following requirements:

1. The Financial Institution must be licensed and regulated as a financial institution 

under the laws of Bulgaria; 

2. The Financial Institution must have no fixed place of business outside of Bulgaria. 

For this purpose, a fixed place of business does not include a location that is not 

advertised to the public and from which the Financial Institution performs solely 

administrative support functions;

3. The Financial Institution must not solicit customers or Account Holders outside 

Bulgaria. For this purpose, a Financial Institution shall not be considered to have 

solicited customers or Account Holders outside Bulgaria merely because the 

Financial Institution (a) operates a website, provided that the website does not 

specifically indicate that the Financial Institution provides Financial Accounts or 

services to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders, or (b) advertises in print media or on a radio or television 

station that is distributed or aired primarily within Bulgaria but is also incidentally 

distributed or aired in other countries, provided that the advertisement does not 

specifically indicate that the Financial Institution provides Financial Accounts or 

services to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders; 

4. The Financial Institution must be required under the laws of Bulgaria to identify 

resident Account Holders for purposes of either information reporting or 

withholding of tax with respect to Financial Accounts held by residents or for 

purposes of satisfying Bulgaria’s AML due diligence requirements; 

5. At least 98 percent of the Financial Accounts by value maintained by the Financial 

Institution must be held by residents (including residents that are Entities) of 

Bulgaria or a Member State of the European Union;

6. Beginning on or before July 1, 2014, the Financial Institution must have policies 

and procedures, consistent with those set forth in Annex I, to prevent the Financial 

Institution from providing a Financial Account to any Nonparticipating Financial 

Institution and to monitor whether the Financial Institution opens or maintains a 

Financial Account for any Specified U.S. Person who is not a resident of Bulgaria

(including a U.S. Person that was a resident of Bulgaria when the Financial 

Account was opened but subsequently ceases to be a resident of Bulgaria) or any 
Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens 

who are not residents of Bulgaria; 

7. Such policies and procedures must provide that if any Financial Account held by a 

Specified U.S. Person who is not a resident of Bulgaria or by a Passive NFFE with 

Controlling Persons who are U.S. residents or U.S. citizens who are not residents 

of Bulgaria is identified, the Financial Institution must report such Financial 

Account as would be required if the Financial Institution were a Reporting 

Bulgarian Financial Institution (including by following the applicable registration 

requirements on the IRS FATCA registration website) or close such Financial 

Account;

8. With respect to a Preexisting Account held by an individual who is not a resident 

of Bulgaria or by an Entity, the Financial Institution must review those Preexisting 

Accounts in accordance with the procedures set forth in Annex I applicable to 

Preexisting Accounts to identify any U.S. Reportable Account or Financial 

Account held by a Nonparticipating Financial Institution, and must report such 

Financial Account as would be required if the Financial Institution were a 

Reporting Bulgarian Financial Institution (including by following the applicable 

registration requirements on the IRS FATCA registration website) or close such 

Financial Account;

9. Each Related Entity of the Financial Institution that is a Financial Institution 

must be incorporated or organized in Bulgaria and, with the exception of any 

Related Entity that is a retirement fund described in paragraphs A through D of 

section II of this Annex II, satisfy the requirements set forth in this paragraph A; 

and 

10. The Financial Institution must not have policies or practices that discriminate

against opening or maintaining Financial Accounts for individuals who are

Specified U.S. Persons and residents of Bulgaria.

B. Local Bank. A Financial Institution satisfying the following requirements:

1. The Financial Institution operates solely as (and is licensed and regulated under 

the laws of Bulgaria as) (a) a bank or (b) a credit union or similar cooperative 

credit organization that is operated without profit;

2. The Financial Institution’s business consists primarily of receiving deposits from 

and making loans to, with respect to a bank, unrelated retail customers and, with 

respect to a credit union or similar cooperative credit organization, members, 

provided that no member has a greater than five percent interest in such credit 

union or cooperative credit organization;

3. The Financial Institution satisfies the requirements set forth in subparagraphs A(2) 

and A(3) of this section, provided that, in addition to the limitations on the website 

described in subparagraph A(3) of this section, the website does not permit the 

opening of a Financial Account;
4. The Financial Institution does not have more than $175 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken 

together, do not have more than $500 million in total assets on their consolidated 

or combined balance sheets; and

5. Any Related Entity must be incorporated or organized in Bulgaria, and any 

Related Entity that is a Financial Institution, with the exception of any Related 

Entity that is a retirement fund described in paragraphs A through D of section II 

of this Annex II or a Financial Institution with only low-value accounts described 

in paragraph C of this section, must satisfy the requirements set forth in this 

paragraph B. 

C. Financial Institution with Only Low-Value Accounts. A Bulgarian Financial 

Institution satisfying the following requirements:

1. The Financial Institution is not an Investment Entity;

2. No Financial Account maintained by the Financial Institution or any Related 

Entity has a balance or value in excess of $50,000, applying the rules set forth in 

Annex I for account aggregation and currency translation; and 

3. The Financial Institution does not have more than $50 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken 

together, do not have more than $50 million in total assets on their consolidated or 

combined balance sheets. 

D. Qualified Credit Card Issuer. A Bulgarian Financial Institution satisfying the 

following requirements:

1. The Financial Institution is a Financial Institution solely because it is an issuer of 

credit cards that accepts deposits only when a customer makes a payment in 

excess of a balance due with respect to the card and the overpayment is not 

immediately returned to the customer; and

2. Beginning on or before July 1, 2014, the Financial Institution implements policies 

and procedures to either prevent a customer deposit in excess of $50,000, or to 

ensure that any customer deposit in excess of $50,000, in each case applying the 

rules set forth in Annex I for account aggregation and currency translation, is 

refunded to the customer within 60 days. For this purpose, a customer deposit 

does not refer to credit balances to the extent of disputed charges but does include 

credit balances resulting from merchandise returns.

IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special 

Rules. The Financial Institutions described in paragraphs A through E of this section are 

Non-Reporting Bulgarian Financial Institutions that shall be treated as deemed-compliant 

FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, 

paragraph F of this section provides special rules applicable to an Investment Entity. 

A. Trustee-Documented Trust. A trust established under the laws of Bulgaria to the 

extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting 
Model 1 FFI, or Participating FFI and reports all information required to be reported 

pursuant to the Agreement with respect to all U.S. Reportable Accounts of the trust.

B. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial 

Institution described in subparagraph B(1) or B(2) of this section having a sponsoring 

entity that complies with the requirements of subparagraph B(3) of this section. 

1. A Financial Institution is a sponsored investment entity if (a) it is an Investment 

Entity established in Bulgaria that is not a qualified intermediary, withholding 

foreign partnership, or withholding foreign trust pursuant to relevant U.S. 

Treasury Regulations; and (b) an Entity has agreed with the Financial Institution

to act as a sponsoring entity for the Financial Institution. 

2. A Financial Institution is a sponsored controlled foreign corporation if (a) the 

Financial Institution is a controlled foreign corporation organized under the laws 

of Bulgaria that is not a qualified intermediary, withholding foreign partnership, 

or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; (b) 

the Financial Institution is wholly owned, directly or indirectly, by a Reporting 

U.S. Financial Institution that agrees to act, or requires an affiliate of the Financial 

Institution to act, as a sponsoring entity for the Financial Institution; and (c) the 

Financial Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all Account 

Holders and payees of the Financial Institution and to access all account and 

customer information maintained by the Financial Institution including, but not 

limited to, customer identification information, customer documentation, account 

balance, and all payments made to the Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity is authorized to act on behalf of the Financial Institution 

(such as a fund manager, trustee, corporate director, or managing partner) to 

fulfill applicable registration requirements on the IRS FATCA registration 

website; 

b) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect 

to the Financial Institution, the sponsoring entity registers the Financial 

Institution pursuant to applicable registration requirements on the IRS FATCA 

registration website on or before the later of December 31, 2015 and the date 

that is 90 days after such a U.S. Reportable Account is first identified; 

d) The sponsoring entity agrees to perform, on behalf of the Financial Institution, 

all due diligence, withholding, reporting, and other requirements that the 

Financial Institution would have been required to perform if it were a 

Reporting Bulgarian Financial Institution;

e) The sponsoring entity identifies the Financial Institution and includes the 

identifying number of the Financial Institution (obtained by following 
applicable registration requirements on the IRS FATCA registration website)

in all reporting completed on the Financial Institution’s behalf; and 

f) The sponsoring entity has not had its status as a sponsor revoked.

C. Sponsored, Closely Held Investment Vehicle. A Bulgarian Financial Institution 

satisfying the following requirements:

1. The Financial Institution is a Financial Institution solely because it is an 

Investment Entity and is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. Treasury 

Regulations; 

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 

FFI, or Participating FFI, is authorized to act on behalf of the Financial Institution 

(such as a professional manager, trustee, or managing partner), and agrees to 

perform, on behalf of the Financial Institution, all due diligence, withholding, 

reporting, and other requirements that the Financial Institution would have been 

required to perform if it were a Reporting Bulgarian Financial Institution; 

3. The Financial Institution does not hold itself out as an investment vehicle for 

unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity Interests in 

the Financial Institution (disregarding debt interests owned by Participating FFIs 

and deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity 

owns 100 percent of the Equity Interests in the Financial Institution and is itself a 

sponsored Financial Institution described in this paragraph C); and

5. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

b) The sponsoring entity agrees to perform, on behalf of the Financial Institution, 

all due diligence, withholding, reporting, and other requirements that the 

Financial Institution would have been required to perform if it were a 

Reporting Bulgarian Financial Institution and retains documentation collected

with respect to the Financial Institution for a period of six years; 

c) The sponsoring entity identifies the Financial Institution in all reporting 

completed on the Financial Institution’s behalf; and 

d) The sponsoring entity has not had its status as a sponsor revoked. 

D. Investment Advisors and Investment Managers. An Investment Entity established 

in Bulgaria that is a Financial Institution solely because it (1) renders investment 

advice to, and acts on behalf of, or (2) manages portfolios for, and acts on behalf of, a 

customer for the purposes of investing, managing, or administering funds deposited in 
the name of the customer with a Financial Institution other than a Nonparticipating 

Financial Institution.

E. Collective Investment Vehicle. An Investment Entity established in Bulgaria that is 

regulated as a collective investment vehicle, provided that all of the interests in the 

collective investment vehicle (including debt interests in excess of $50,000) are held 

by or through one or more exempt beneficial owners, Active NFFEs described in 

subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. 

Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. 

F. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective investment

vehicle described in paragraph E of this section, the reporting obligations of any 

Investment Entity (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.

2. With respect to interests in: 

a) An Investment Entity established in a Partner Jurisdiction that is regulated as a 

collective investment vehicle, all of the interests in which (including debt 

interests in excess of $50,000) are held by or through one or more exempt 

beneficial owners, Active NFFEs described in subparagraph B(4) of section VI 

of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Nonparticipating Financial Institutions; or

b) An Investment Entity that is a qualified collective investment vehicle under 

relevant U.S. Treasury Regulations; 

the reporting obligations of any Investment Entity that is a Bulgarian Financial 

Institution (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.

3. With respect to interests in an Investment Entity established in Bulgaria that is not 

described in paragraph E or subparagraph F(2) of this section, consistent with 

paragraph 3 of Article 5 of the Agreement, the reporting obligations of all other 

Investment Entities with respect to such interests shall be deemed fulfilled if the 

information required to be reported by the first-mentioned Investment Entity 

pursuant to the Agreement with respect to such interests is reported by such 

Investment Entity or another person.

V. Accounts Excluded from Financial Accounts. The following accounts are excluded 

from the definition of Financial Accounts and therefore shall not be treated as U.S. 

Reportable Accounts.

A. Certain Savings Accounts.

1. Retirement and Pension Account. A retirement or pension account maintained in 

Bulgaria that satisfies the following requirements under the laws of Bulgaria.
a) The account is subject to regulation as a personal retirement account or is part 

of a registered or regulated retirement or pension plan for the provision of 

retirement or pension benefits (including disability or death benefits);

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Bulgaria are deductible or 

excluded from the gross income of the account holder or taxed at a reduced 

rate, or taxation of investment income from the account is deferred or taxed at 

a reduced rate);

c) Annual information reporting is required to the tax authorities in Bulgaria with 

respect to the account;

d) Withdrawals are conditioned on reaching a specified retirement age, disability, 

or death, or penalties apply to withdrawals made before such specified events; 

and

e) Either (i) annual contributions are limited to $50,000 or less, or (ii) there is a 

maximum lifetime contribution limit to the account of $1,000,000 or less, in 

each case applying the rules set forth in Annex I for account aggregation and 

currency translation. 

2. Non-Retirement Savings Accounts. An account maintained in Bulgaria (other 

than an insurance or Annuity Contract) that satisfies the following requirements 

under the laws of Bulgaria.

a) The account is subject to regulation as a savings vehicle for purposes other 

than for retirement;

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Bulgaria are deductible or 

excluded from the gross income of the account holder or taxed at a reduced 

rate, or taxation of investment income from the account is deferred or taxed at 

a reduced rate);

c) Withdrawals are conditioned on meeting specific criteria related to the purpose 

of the savings account (for example, the provision of educational or medical 

benefits), or penalties apply to withdrawals made before such criteria are met; 

and

d) Annual contributions are limited to $50,000 or less, applying the rules set 

forth in Annex I for account aggregation and currency translation.

B. Certain Term Life Insurance Contracts. A life insurance contract maintained in 

Bulgaria with a coverage period that will end before the insured individual attains age 

90, provided that the contract satisfies the following requirements: 

1. Periodic premiums, which do not decrease over time, are payable at least annually 

during the period the contract is in existence or until the insured attains age 90, 

whichever is shorter;
2. The contract has no contract value that any person can access (by withdrawal, 

loan, or otherwise) without terminating the contract;

3. The amount (other than a death benefit) payable upon cancellation or termination 

of the contract cannot exceed the aggregate premiums paid for the contract, less 

the sum of mortality, morbidity, and expense charges (whether or not actually 

imposed) for the period or periods of the contract’s existence and any amounts 

paid prior to the cancellation or termination of the contract; and

4. The contract is not held by a transferee for value.

C. Account Held By an Estate. An account maintained in Bulgaria that is held solely 

by an estate if the documentation for such account includes a copy of the deceased’s 

will or death certificate.

D. Escrow Accounts. An account maintained in Bulgaria established in connection with 

any of the following: 

1. A court order or judgment.

2. A sale, exchange, or lease of real or personal property, provided that the account 

satisfies the following requirements:

a) The account is funded solely with a down payment, earnest money, deposit in 

an amount appropriate to secure an obligation directly related to the 

transaction, or a similar payment, or is funded with a financial asset that is 

deposited in the account in connection with the sale, exchange, or lease of the 

property; 

b) The account is established and used solely to secure the obligation of the 

purchaser to pay the purchase price for the property, the seller to pay any 

contingent liability, or the lessor or lessee to pay for any damages relating to 

the leased property as agreed under the lease;

c) The assets of the account, including the income earned thereon, will be paid or 

otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee 

(including to satisfy such person’s obligation) when the property is sold, 

exchanged, or surrendered, or the lease terminates;

d) The account is not a margin or similar account established in connection with 

a sale or exchange of a financial asset; and

e) The account is not associated with a credit card account. 

3. An obligation of a Financial Institution servicing a loan secured by real property 

to set aside a portion of a payment solely to facilitate the payment of taxes or 

insurance related to the real property at a later time.
4. An obligation of a Financial Institution solely to facilitate the payment of taxes at 

a later time.

E. Partner Jurisdiction Accounts. An account maintained in Bulgaria and excluded 

from the definition of Financial Account under an agreement between the United 

States and another Partner Jurisdiction to facilitate the implementation of FATCA, 

provided that such account is subject to the same requirements and oversight under 

the laws of such other Partner Jurisdiction as if such account were established in that 

Partner Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in 

that Partner Jurisdiction.

VI. Definitions. The following additional definitions shall apply to the descriptions above:

A. Reporting Model 1 FFI. The term Reporting Model 1 FFI means a Financial 

Institution with respect to which a non-U.S. government or agency thereof agrees to 

obtain and exchange information pursuant to a Model 1 IGA, other than a Financial 

Institution treated as a Nonparticipating Financial Institution under the Model 1 IGA. 

For purposes of this definition, the term Model 1 IGA means an arrangement between 

the United States or the Treasury Department and a non-U.S. government or one or 

more agencies thereof to implement FATCA through reporting by Financial 

Institutions to such non-U.S. government or agency thereof, followed by automatic 

exchange of such reported information with the IRS. 

B. Participating FFI. The term Participating FFI means a Financial Institution that has 

agreed to comply with the requirements of an FFI Agreement, including a Financial 

Institution described in a Model 2 IGA that has agreed to comply with the 

requirements of an FFI Agreement. The term Participating FFI also includes a 

qualified intermediary branch of a Reporting U.S. Financial Institution, unless such 

branch is a Reporting Model 1 FFI. For purposes of this definition, the term FFI 

Agreement means an agreement that sets forth the requirements for a Financial 

Institution to be treated as complying with the requirements of section 1471(b) of the 

U.S. Internal Revenue Code. In addition, for purposes of this definition, the term 

Model 2 IGA means an arrangement between the United States or the Treasury 

Department and a non-U.S. government or one or more agencies thereof to facilitate 

the implementation of FATCA through reporting by Financial Institutions directly to 

the IRS in accordance with the requirements of an FFI Agreement, supplemented by 

the exchange of information between such non-U.S. government or agency thereof 

and the IRS.