General Information on Withholding Tax

Bulgaria levies withholding tax on various types of income (dividends, interest, royalties, capital gains from shares and real estate disposal, management and technical services fees, etc.) payable to non-resident individuals.

The general rate is 10% on the gross amount of the respective income. Dividend and liquidation quota income is subject to 5% withholding tax.

Those rates may be reduced or the income recipient may be exempt from withholding tax under a Double Tax Treaty (DTT) between Bulgaria and the recipient state. Currently, Bulgaria has 68 effective bilateral DTTs (incl. with all European Union countries, the USA, Canada, Japan, China, India, Turkey, Russia, etc.).

EU/EEA Benefits

Some favourable rules are available for income payable to eligible recipients from the EU and the European Economic Area:

  • EU/EEA tax resident recipients are entitled to use the exemptions available to local individuals
  • there is a possibility for a net taxation of certain types of income payable to EU/EEA individuals

Administrative Issues

There are detailed rules for:

  • withholding tax chargeability
  • terms for withholding tax payment and declaration
  • the person liable for withholding, payment and declaring the withholding tax
  • application for a DTT clearance
  • obtaining a certificate for the paid withholding tax