The Bulgarian government has cut the tax payable on dividends from 15% to 7%.
According to a spokesman for Bank Austria-Creditanstalt (BA-CA) in Sofia, no dividend tax will be due to investors based in the European Union (EU) if they are EU Member state residential companies; have no tax privileges in their country of residence; are in possession of at least a 20% stake in a Bulgarian company and are the final beneficial owners of the income; they have hold the shares for at least one year prior to the date the dividend is calculated.
In addition, no withholding tax will be applied on interest payments on bonds listed on the regulated market in Bulgaria and/or in another EU member state, though the tax on interest income remains at 15%.
“The changes are especially of benefit to foreign investors from countries which have no Double Tax Treaty in place with Bulgaria or for those with no such favorable rates,” says the BA-CA spokesman.