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Withholding Tax

With withholding tax are levied:

Dividends and liquidation shares which are distributed by local companies in favour of (i) foreign companies, except for the cases when the dividends are realized by a foreign company through permanent establishment in Bulgaria; (ii) Bulgarian companies that are not traders. In this case the tax rate is 5 percent.

With withholding tax is also levied the following income of foreign companies when this income is not realised trough a permanent establishment in Bulgaria:

  • income from financial assets and transactions with financial assets issued by Bulgarian companies
  • interests payment
  • income from rent
  • author and license fees
  • remunerations for technical services
  • remunerations under franchising and factoring contracts
  • remunerations for managing and controlling a Bulgarian companies
  • income from transfer of rights of immovable property, located in Bulgaria

The tax rate is set at 10 percent.