The Bulgaria–Turkey double taxation treaty

Companies and taxes · Last reviewed: 2026-10-10

What the treaty settles, and what it leaves open

The treaty takes each category of income separately and says which state may tax it: for some categories only the state of residence, for others the source state as well, but with a ceiling. The practical result is usually one tax instead of two. What the treaty does not remove is the filing duty — you may still have to file in both states even where tax is due only in one.

Residence comes first

Tax residence is not citizenship and is not proven by an address registration. Each state applies its own domestic definition first; where both claim you, the treaty runs through a sequence of tie-breakers — permanent home, centre of vital interests, habitual abode and finally nationality. The assessment is individual, and an assumption borrowed from someone else's case is the most common way people end up with a retrospective correction.

Categories are treated one by one

• •Employment income — where the work is physically performed and where the employer sits both matter.
• •Business profits — the question is whether a permanent establishment arises in the other state.
• •Rental income — the state where the property is located generally keeps its taxing right.
• •Dividends, interest and royalties — a capped source-state tax is typically allowed.
• •Pensions — public and private pensions sit in different provisions and do not always lead to the same answer.

How relief is actually claimed

1. 1

   Obtain a certificate of tax residence

   In Bulgaria this is issued by the National Revenue Agency; in Turkey by the revenue administration. A payer abroad will not apply the treaty rate before seeing it.
2. 2

   Give it to the payer in advance

   Relief is normally applied at the moment of payment. A certificate produced afterwards leaves only the slower refund route.
3. 3

   Report the foreign tax in your annual return

   Tax paid in the other state is taken into account by the method the treaty prescribes — credit or exemption. The two methods do not give the same figure.
4. 4

   Keep the evidence

   Without proof of the tax withheld abroad, no credit is granted. Keep payment records and the certificates issued by the foreign administration together.

Treaty particulars: Türkiye in НАП's list

The НАП page “List of agreements” sets out the states with which Bulgaria has a double-taxation agreement, with their signing and entry-into-force dates. The row for Türkiye shows signing on 07.07.1994 and entry into force on 17.09.1997; the row carries a link only to the text of the agreement (no consolidated text or protocol). The content of the articles was not part of this reading.

How the treaty is applied to Bulgarian-source income

According to the НАП page “Applying the DTAs”, double-taxation agreements are not applied directly in Bulgaria; the grounds are proved under the procedure in Articles 135 to 142 of the Tax and Social Insurance Procedure Code (ДОПК). The foreign person has to show НАП four things:

• •that it is a resident of the other state within the meaning of the agreement;
• •that it is the beneficial owner of the income from a Bulgarian source;
• •that it has no place of business or fixed base in Bulgaria to which the income is effectively connected;
• •that the agreement's special requirements are met.

The request is accompanied by a certificate of residence for the relevant year or years, a declaration that the person is the beneficial owner of the income and that it was not earned through a place of business in Bulgaria, proof of the signatory's authority (most often an extract from the commercial register), contracts and invoices showing the amount, basis and type of the income, and a power of attorney where applicable. Where a check is carried out, НАП's period for issuing an opinion is 60 days from the request.

Foreign income of a Bulgarian resident and the annual return

According to НАП's page on personal income tax, a local individual files an annual return (Art. 50 ZDDFL) if they received taxable income (a civil contract, rent, sale of property, shares and holdings), want to use tax reliefs, hold shares, holdings or real estate abroad, or received income from abroad subject to final tax such as dividends and prizes. Where a local individual earns income from a foreign source and the payer does not withhold tax (Art. 67(4)), the tax is paid by 30 April of the following year and declared in the annual return. How tax paid abroad is taken into account in Bulgaria — by credit or by exemption — depends on the relevant article of the agreement; it was not read and so is not stated here.

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