Bulgaria’s government has proposed to parliament to ratify a new agreement with Romania on avoiding double taxation and prevention of tax evasion.

The agreement, signed in April 2015, provides a system for the distribution of taxation between the two neighbouring EU member states, which will contribute to the development of bilateral economic ties, the government said in a statement following its weekly meeting on Wednesday.

The new accord will help Bulgarian and Romanian companies do business in the neighbouring country by providing them with relieved tax regulations, according to the statement.

The existing agreement on avoiding double taxation was signed in 1994 in a radically different economic environment.

Bulgaria and Romania both joined the European Union in 2007.

Romania is among Bulgaria's main export destinations alongside Germany, Turkey, Italy and  Greece. It is also one of the largest sources of Bulgaria's imports alongiside Russia, Germany and Italy.

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