Bulgaria Company Taxes for Non-Residents: 10%, 5% and Treaties

Bulgaria company taxes for non-residents: the company is always Bulgarian

Plenty of founders run a Bulgarian EOOD without living in Bulgaria. The first question is always the same: does it matter for tax that the owner is not Bulgarian?

For the company itself, no. An EOOD or OOD incorporated under Bulgarian law is a Bulgarian resident company under Art. 3 of the Corporate Income Taxes Act (ЗКПО, often abbreviated CITA in English), taxed on its worldwide profits. The test is where the company was incorporated, not who owns it or where they live. The books, the returns and the corporate tax are exactly what a company owned by someone in Sofia would have.

What changes is the moment money leaves the company for you: as a dividend, as interest on a loan you made to it, or as a management fee. At that point the company is paying Bulgarian-source income to a non-resident, and the law makes it responsible for withholding tax and paying it to the National Revenue Agency (NRA, Bulgaria's tax authority). Those payments are what this guide is about.

Whether you are personally a Bulgarian tax resident is a separate question, answered by the 183-day rule and the centre of vital interests test. We covered it in full in a separate guide.

Bulgarian tax residency: the 183-day rule and the 10% flat tax →

10% corporate income tax and the annual return

Corporate income tax is 10% of taxable profit (Art. 20 CITA), one of the lowest headline rates in the EU. The annual corporate tax return under Art. 92 CITA is filed between 1 March and 30 June of the following year, and the tax is paid by 30 June, net of any advance installments already made (Art. 93 CITA).

Advance installments only bite once the company has real turnover. For 2026 they apply only if 2024 net sales revenue exceeded €153,387.56, and newly incorporated companies are exempt for the year they are formed and the year after (Art. 83(2) CITA). If you do owe them, the Art. 87a declaration goes in between 1 March and 15 April, and you can revise the amounts with an Art. 88 declaration until 15 November.

None of this depends on where you live.

Advance corporate tax payments in Bulgaria: who owes what →

Bulgaria dividend withholding tax for non-residents: 5% or 0%

When the company distributes profit, the Bulgarian withholding tax depends on who receives the dividend:

• A non-resident individual, from any country including EU member states: 5% final tax on the gross dividend set in the distribution resolution (Art. 38(1)(2) and (2), and Art. 46(3) of the Personal Income Taxes Act, ЗДДФЛ). The company withholds it.
• A company resident in the EU or EEA (the EU plus Norway, Iceland and Liechtenstein): no withholding, except for hidden profit distributions (Art. 194(3)(3) CITA). The statute sets no minimum shareholding or holding period.
• A company outside the EU and EEA (a US LLC or corporation, a UK Ltd since Brexit, a Swiss AG, a UAE free-zone company): 5% final withholding tax (Art. 194(1)(1) and Art. 200(1) CITA), unless a treaty gives a lower rate.

A round-number example. Your EOOD makes €100,000 of taxable profit and pays €10,000 corporate tax. You distribute the remaining €90,000. If you hold the shares personally, the company withholds €4,500 and you receive €85,500, a combined Bulgarian burden of 14.5%. If your shares sit in a Dutch BV or a German GmbH, the BV receives the full €90,000 with nothing withheld in Bulgaria. If they sit in a UK Ltd, you are back to 5%.

To use the EU exemption the company has to be able to show that the shareholder is tax resident in an EU or EEA country. The safest evidence is a certificate of tax residence from the shareholder's own tax authority. Get it before the payment and keep it on file.

The deadline runs from the resolution, not the payment. The tax is due by the end of the month following the quarter in which the distribution was resolved (Art. 202(1) CITA for companies, Art. 65(2) ЗДДФЛ for individuals), with the return filed by the same date: Art. 201 CITA for foreign companies, Art. 55 ЗДДФЛ for individuals. A resolution on 20 May 2026 means tax and return by 31 July 2026, even if the money only goes out in December.

Double tax treaties: how to claim the lower rate

Bulgaria has 70 double tax treaties in force covering 71 countries, according to the NRA, and where a treaty says something different from domestic law, the treaty wins (Art. 13 CITA, Art. 75 ЗДДФЛ).

A treaty can only reduce Bulgarian tax, never raise it. For dividends that rarely changes much: most treaty dividend rates are 5% or higher (for example 5% or 10% with the United States, 5% or 15% with Germany and the United Kingdom), and the domestic rate is already 5%. Treaties matter far more for the 10% payments in the next section and for the credit you claim at home.

The procedure is in Arts. 135 to 142 of the Tax and Social Security Procedure Code (ДОПК). The foreign recipient has to establish four things (Art. 136): that it is resident in the other country under the treaty; that it is the beneficial owner of the income, meaning it controls the income and is not a conduit company (Art. 136a); that it has no permanent establishment in Bulgaria the income is connected to; and that it meets any special conditions in that treaty.

• Up to €255,645.94 a year from one payer: you prove this to the Bulgarian company itself, with no application to the NRA (Art. 142(1) ДОПК). In practice that means a certificate of tax residence from your tax authority plus declarations on beneficial ownership and the absence of a permanent establishment. The company withholds at the treaty rate and reports the payments and the relief it applied by 31 March of the following year (Art. 142(5) ДОПК).
• Above that amount: the recipient files an application with the NRA, with evidence of the income (for a dividend, the distribution resolution, under Art. 138). The NRA has 60 days to respond, and silence counts as confirmation that the treaty applies (Art. 141 ДОПК).
• If full tax was already withheld, the treaty relief is claimed afterwards as a refund under Art. 129 ДОПК (Art. 142(3)).

Interest, royalties and management fees: 10% withholding

Interest on a shareholder loan, a management fee or a service invoice from your own foreign company carry a different rate.

• Paid to a foreign company: interest, royalties, fees for technical services, and fees for management or control of a Bulgarian company are Bulgarian-source income (Art. 12(5) CITA) and carry 10% withholding tax (Art. 195 and Art. 200(2) CITA).
• Paid to a non-resident individual: interest, royalties, technical services and income from management and control carry a 10% final tax on the gross amount (Art. 37(1) and Art. 46(1) ЗДДФЛ).

The deadline here is different from dividends: the tax is due by the end of the month following the quarter in which the income was accrued (Art. 202(2) CITA, Art. 65(1) ЗДДФЛ).

This is where EU law and treaties actually cut the bill. Interest and royalties paid to an associated EU company are exempt where the holding is at least 25% and has been held for at least two years. The US treaty caps tax on interest and royalties at 5%. Example: you lend your company €50,000 at 5% a year. That is €2,500 of interest, and the company withholds €250. Under a 5% treaty rate it withholds €125, but only if the paperwork from the previous section is in place before the payment.

VAT: being a non-resident owner changes nothing

For VAT, what counts is the company, not its owner. A Bulgarian company must register once its annual domestic turnover exceeds €51,130 (Art. 96(1) of the VAT Act, ЗДДС), and can register voluntarily below that.

A dividend is a distribution of profit, not payment for a supply, so it carries no VAT and needs no invoice.

Watch the services your Bulgarian company buys from your foreign company: management, IT, consulting. For business-to-business services the place of supply is generally where the customer is, and the Bulgarian company owes the VAT under the reverse charge (Art. 82(2)(3) ЗДДС). If your company is not VAT registered, it must register under Art. 97a ЗДДС, with the application filed at least 7 days before the VAT on that service becomes chargeable.

So one management fee invoice from your own foreign company can trigger two separate Bulgarian taxes: reverse-charge VAT and the 10% withholding tax under CITA. One does not cancel the other.

Art. 97a VAT registration: when a foreign service triggers it →

What you pay in your home country

This part is governed by your home country's law, so only the broad shape here. Bulgarian withholding tax is final in Bulgaria. Your country of residence then taxes the income under its own rules.

• As an individual, you normally report the dividend at home. For passive income such as dividends, Bulgarian treaties most often use the ordinary tax credit method, according to the NRA: the 5% paid in Bulgaria is credited against your home tax, and if your home rate is higher you pay the difference there.
• As an EU parent company, you fall under the Parent-Subsidiary Directive (2011/96/EU): your member state either exempts the dividend or taxes it while crediting the tax paid (Art. 4), subject to a minimum holding of 10%.
• Controlled foreign company rules. Every EU member state applies Art. 7 of the Anti-Tax Avoidance Directive (2016/1164). If a company holds more than 50% of a foreign subsidiary and the tax that subsidiary actually pays is lower than the difference between the tax it would pay at home and the tax actually paid, part of its undistributed profit can be taxed at home. With a 10% Bulgarian rate, that test can be met in any country with a corporate rate above 20%. EU and EEA subsidiaries escape it if they carry on a substantive economic activity supported by staff, equipment, assets and premises.

One more risk, covered in our residency guide: if the company is in practice run from your home country, that country may argue it is managed there or has a permanent establishment there. For everything in this section, you need an adviser in your own jurisdiction.

The annual filing calendar for a non-resident owner

On top of the standard obligations of any Bulgarian company, a foreign owner adds a few dates:

• End of the month after each quarter: withholding tax and the Art. 201 CITA or Art. 55 ЗДДФЛ return, if that quarter had a dividend resolution or accrued interest, royalties or management fees to non-residents.
• By 28 February: the Art. 73 ЗДДФЛ annual report of income paid to individuals, including non-residents, except income already reported under Art. 142(5) ДОПК.
• By 31 March: the Art. 142(5) ДОПК return, if treaty relief was applied directly.
• 1 March to 30 June: the Art. 92 CITA annual return and payment of corporate tax.
• By 30 September: publication of the annual financial statements in the Commercial Register (Art. 38 of the Accountancy Act).
• By the 14th of every month: the VAT return, if the company is VAT registered.

How FreeMe.bg helps

The most common mistake with foreign-owned companies is not the wrong rate, it is the missed date: a dividend resolved in May, paid in October, with the tax due back in July. FreeMe.bg tracks distribution resolutions and payments to non-residents, calculates the withholding tax, files the returns with the NRA, and tells you which documents to collect before the money goes out.

See how we handle VAT and tax filings →
Setting up a Bulgarian company from abroad? See how →

This guide is general information, current as of October 2026, and not individual tax advice. Holding structures, several countries or large distributions deserve a proper conversation with an accountant before you sign the dividend resolution.