Double Tax Treaties in Bulgaria - How to Avoid Double Taxation

Interested in the double taxation treaties signed by Bulgaria with countries worldwide? Please explore this article and get in touch with our experts in company formation in Bulgaria for more details.

Quick Facts
What are double tax treaties in Bulgaria?	Agreements between Bulgaria and other countries to avoid double taxation of income
Number of double tax treaties	Bulgaria has signed over 70 treaties with countries around the world.
Purpose of DTTs in Bulgaria	To provide tax relief and prevent the same income from being taxed twice.
Main benefit	Reduction of withholding taxes on dividends, interest, and royalties.
DTTs in Bulgaria with EU countries	Bulgaria has DTTs with all EU member states.
Withholding tax rate	5% on dividends and 10% on interest and royalties, but lower or exempt under specific DTTs.
Types of income covered	Dividends, interest, royalties, business profits, salaries, and pensions.
Tax residency requirement	Tax residency is essential for claiming DTT benefits.
Double tax treaties benefits for foreign entities	Foreign entities can benefit from reduced taxes on Bulgarian-source income.
Tax relief on capital gains	DTTs often reduce or eliminate tax on capital gains from cross-border transactions.
Claiming DTT benefits	Eligible entities or individuals need to apply through the tax authorities in Bulgaria.
Exemptions on dividends	Many treaties allow exemptions or reduced rates on dividend withholding tax.
Domestic tax laws vs DTT	DTTs take precedence over domestic tax laws when there is a conflict.
DTTs and cross-border business	Businesses operating across borders can significantly reduce their tax burdens through DTTs.
Assistance	Our company formation agents offer specialized support in double tax treaties and company incorporation in Bulgaria.

What is the purpose of a double tax treaty?

To prevent double taxation and thus facilitate foreign investments.

Who can benefit from the DTTs signed by Bulgaria?

foreign & multinational companies,
individuals gaining foreign-source income, etc.

How are double taxation treaties known?

DTTs,
Double taxation agreements.

How many DTTs did Bulgaria sign?

More than 70.

NOTE: A new DTT with Andorra was signed on 19 June 2026 (pending ratification).

Here is an infographic that might help you understand better:

What types of income are protected by the DTT’s signed by Bulgaria?

Interest,
Dividends,
Royalties,
Business profits,
Employment income,
Capital gains,
Pensions,
Real estate income,
Director’s fees, etc.

What is the withholding tax on dividends through DTTs signed by Bulgaria?

Ranging from 5% to 15%. Exemptions to this tax also apply, depending on the double taxation agreement signed by Bulgaria.

How is the double taxation eliminated through Bulgaria’s DTTs?

Tax exemption – the income is levied only in the country where it is generated,
Tax credits – if the taxes are paid overseas.

IMPORTANT! The method depends on the type of double taxation agreement signed by Bulgaria and on the income.

What is the tax residency certificate?

A type of document confirming the tax residency of a company or individual. This certificate is normally used to claim treaty benefits and thus avoid double taxation.

What tax convention does Bulgaria follow?

The OECD Model Tax Convention that covers all international tax rules.

Can tax disputes be solved in Bulgaria?

Yes, through the Mutual Agreement Procedure.

How can I apply for tax relief under a double tax treaty after the tax is paid?

In cases where the withholding tax is paid in accordance with the provisions of the applicable double tax treaty, a refund request can be made with the National Revenue Agency.

What are the benefits of DTTs signed by Bulgaria with countries worldwide?

to reduce the withholding tax rates,
to protect from double taxation of company profits,
to relieve cross-border business operations and many more.

Are there any precautions on double tax treaties signed by Bulgaria? Are there any updates?

Yes, Bulgaria continues to expand its DTT network. Plus, the anti-tax avoidance rules will be strengthened.

If you plan to open a company in Bulgaria, our local agents can help you in this endeavor. They can prepare the required documents and register the company for the startup’s tax payments in Bulgaria. You have access to a range of services you can benefit from when you work with our local firm.

Foreign investors who want to learn more about avoiding double taxation under treaties may contact our specialists in company formation in Bulgaria.