Bulgarian government has reportedly approved a draft double tax agreement with India on the avoidance of double taxation and the prevention of income tax evasion.

As part of the deal, Bulgarian cabinet has authorised the finance minister to carry out negotiations and to sign the document, subject to ratification, according to The Sofia Globe.

The draft of the new agreement will deal with the distribution of taxation between the two countries that will add to the development of bilateral cooperation.

According to the Bulgarian government, effective implementation will stimulate and deepen the partnership between Bulgaria and India.

Additionally, the new document includes the appropriate Bulgarian tax legislation and modern principles of international taxation mentioned in the model tax convention of the OECD.

Previously, a similar agreement between Bulgaria and India was signed under different economic conditions, and different legal regulations in the area of taxation.

However, this agreement was not effective in resolving issues of international double taxation and did not create sufficient incentives for bilateral economic and investment co-operation between the two countries.