Withholding tax in Bulgaria
Withholding tax (данък при източника) is tax that a Bulgarian payer deducts and pays to the state before handing over the income. The NRA page explains that it applies, under the Corporate Income Tax Act (ЗКПО), to specific payments to foreign legal entities; payments to individuals are not the subject of this page.
Companies and taxes · Last reviewed: 2026-10-08
This is not legal or financial advice
Which payments are taxed
According to the NRA, dividends and liquidation shares distributed by Bulgarian legal entities are subject to withholding when paid to foreign legal entities (unless earned through a place of business in Bulgaria) and to local legal entities that are not traders. The following income of foreign legal entities, earned without a place of business in Bulgaria, is also taxed at source:
- Income from, and dealings in, financial assets issued by Bulgarian legal entities, the state and municipalities.
- Interest, including interest within finance lease instalments.
- Rent or other provision of movable property for use.
- Royalties and licence fees.
- Fees for technical services.
- Fees under franchise and factoring contracts.
- Fees for managing or controlling a Bulgarian legal entity.
- Rent from real estate in Bulgaria and income from disposing of real estate in Bulgaria.
- Penalties and compensation of any kind accrued to foreign legal entities in jurisdictions with a preferential tax regime, except insurance compensation.
Rates, exemption and filing
The NRA page states the rate as 5 percent for dividends and liquidation shares and 10 percent for the other income. Dividends distributed to foreign legal entities that are tax residents of an EU member state or another EEA state are exempt, except in cases of hidden profit distribution; Turkey is not in that group, so the exemption does not apply. Whether a double taxation treaty affects the rates is not on this page; see the related article and ask your accountant. The payer files a declaration for each quarter by the end of the month following the quarter, with a qualified electronic signature, to the NRA territorial directorate where it is registered; if the payer is not subject to registration, the declaration goes to the Sofia directorate. Payment is due by the end of the month after the quarter in which the income was accrued. On request, a certificate is issued for tax paid on a foreign legal entity's income.
Recalculation for EU/EEA residents
A foreign legal entity that is a tax resident of an EU or EEA state may elect to recalculate the withholding tax on certain income; the recalculated tax equals the corporate tax that would be due had a local legal entity earned the income, and any excess is refunded. The annual declaration for this is filed with the NRA's Sofia directorate by 31 December of the year following the year the income accrued. The page does not describe this mechanism for Turkish residents.
This page is not legal or tax advice
Frequently asked questions
What is the withholding rate?
On the NRA page, 5 percent for dividends and liquidation shares and 10 percent for the other income under article 195 of the Corporate Income Tax Act. The effect of a double taxation treaty is not stated there.
Who deducts and pays it?
The payer of the income deducts it, declares it and pays it by the end of the month after the quarter. If the payer is not a taxable person, the declaration may fall to the recipient.
Sources
The information on this page is based on the official sources listed below. Legislation changes — open the links and verify the current position.
- Национална агенция за приходите (НАП) — Данък при източника — https://nra.bg/wps/portal/nra/taxes/danak-pri-iztochnika · 2026-10-08
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