Bulgarian CITA provides for a withholding tax of 10% levied on certain types of income paid by Bulgarian companies to foreign persons (e.g. income interests, technical services fees, consultancy fees, rentals, etc). With withholding tax are levied the dividends and liquidation quotas which are distributed by local legal entities in favour of:
-foreign legal entities, except for the cases when the dividends are realized by a foreign legal entity through permanent establishment in Bulgaria;
-local legal entities that are not traders.
With withholding tax the following income is levied of foreign legal entities, when this income is not realized through a permanent establishment in Bulgaria:
1. Income from financial assets and transactions with financial assets issued by local legal entities, state and municipalities.
2. Interests, including interests that are contained in financial leasing instalments.
3. Income from rent or other consignment of movables for use;
4. Author and license fees.
5. Remunerations for technical services.
6. Remunerations under franchising and factoring contracts.
7. Remunerations for managing and controlling a Bulgarian legal entity.
8. Income from real estate or transactions with real estate.
No withholding tax is levied on the income from disposing stocks of public companies, traded rights on stocks of public companies and stocks and shares of collective investment schemes, when the disposing is made on a regulated Bulgarian market of securities.
