Bulgaria Withholding Tax : minfin.bg
Organization : Ministry of Finance
Facility : Withholding Tax
Country : Bulgaria
Website : https://www.minfin.bg/en/789
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What is Withholding Tax?
The withholding tax regime is regulated in Articles 194-203 of the Corporate Income Tax Act.
Related / Similar Facility : Bulgaria Corporation Tax
Withholding tax is levied on:
** Any dividends and shares in a liquidation surplus, as distributed (apportioned) by any resident legal person in favour of:
** any non-resident legal persons, with the exception of the cases where the dividends accrue to a non-resident legal person through a permanent establishment in the country;
** any resident legal persons who are not merchants, including any municipalities.
Taxable Amount of Withholding Tax
** The taxable amount for assessment of the tax withheld at source on any income accruing from dividends shall be the gross amount of the dividends distributed.
** The taxable amount for the assessment of the tax withheld at source on any income accruing from shares in a liquidation surplus shall be the difference between the market price of the claim by the relevant shareholder or member and the documented cost of acquisition of the shares or interests thereof.
** The taxable amount for assessment of the tax withheld at source on any income accruing to any non-resident legal persons from interest payments under financial lease contracts, in the cases where the contract does not stipulate the rate of the said interest, shall be determined on the basis of the market rate of the interest.
** The taxable amount for the assessment of the tax withheld at source on any income accruing to any non-resident legal persons from acts of disposition of financial assets shall be the positive difference between the selling price of the said assets and the documented cost of the acquisition thereof.
** The taxable amount for the assessment of the tax withheld at source on any income accruing to any non-resident legal persons from disposition of immovable property shall be the positive difference between the selling price and the documented cost of acquisition of the immovable property.
** For all other cases the taxable amount for the assessment of the tax withheld at source on the income shall be the gross amount of the said income.
Tax Rate of Withholding Tax
** The tax rate on the income covered under Article 194 of CITA (dividends and liquidation shares) shall be 5 per cent.
** The tax rate on all other income covered under Article 195 of CITA shall be 10 per cent.
Recalculation of Withholding Tax
Any non-resident legal person, who is a resident person for tax purposes of a Member State of the European Union or of another State which is a Contracting Party to the Agreement on the European Economic Area, shall have the right to opt for a recalculation of the tax withheld at source on the income under Article 12 (2), (3), (5) and (8) herein. Where the non-resident person opts for a recalculation of the tax withheld at source, the said recalculation shall be made in respect of all income realized thereby under Article 12 (2), (3), (5) and (8) herein during the year.
Where the non-resident person opts for a recalculation of the tax withheld at source on the incomes realized thereby, the tax as recalculated shall be equal to the corporate tax which would have been due on such income if it were realized by a resident legal person. Where the non-resident person has effected any expenses associated with the income referred to in sentence one, whereon a tax on expenses would have been due if the said expenses have been effected by a resident legal persons, the said tax shall be added to the sum total of the tax as recalculated.
Where the tax withheld at source as remitted on any income referred to in Article 195 (1) herein exceeds the amount of the tax as recalculated, the difference shall be refundable up to the amount of the tax withheld at source on any income referred to in Article 195 (1) herein which the non-resident person cannot deduct from the tax due in the State where the person is resident.