Last Updated on October 22, 2023 by Bulgarian attorney
How to avoid double taxation
Avoiding double taxation is the practice of ensuring that the same income or assets are not subject to taxation in two separate jurisdictions. It’s important to note that even if a valid double taxation treaty exists between Bulgaria and your home country, it doesn’t automatically guarantee that you won’t face additional taxation in your home country on income that has already been taxed in Bulgaria.
For instance, in the case of the double taxation treaty between Bulgaria and Italy, Italian citizens who earn income in Bulgaria may need to hold dual citizenship (with Bulgaria as their second citizenship) in order to fully benefit from Bulgaria’s favourable tax rates.
For more information or legal advice on matters relating to Double Taxation and How to avoid Double taxation please do not hesitate to contact us.
Bulgaria Double Taxation Treaties
Bulgaria has signed double taxation treaties with more than70 countries in order to avoid double taxation for foreign investors. This measure offers tax relief for natural and legal persons operating in multiple countries. Along with the double tax treaties, Bulgaria also signed exchange of information protocols in order to have a clear image of the legal entities requesting double taxation relief.
As of October 2023, Bulgaria has signed double taxation treaties (DTTs) with the following European countries:
- Czech Republic
- North Macedonia
- United Kingdom
Middle Eastern countries that have signed double taxation treaties with Bulgaria:
- Saudi Arabia
- United Arab Emirates
African countries that have signed double taxation treaties with Bulgaria:
- South Africa
Asian countries that have signed double taxation treaties with Bulgaria:
- North Korea
If you need help understanding the benefits of becoming a tax resident in Bulgaria or want to learn more about the double taxation treaty between Bulgaria and your home country, please contact us. Our team of experienced professionals can guide you through the complexities of tax residency and double taxation agreements, and assist you in making informed decisions about your financial situation.
Disclaimer: While Bulgaria’s tax residency can offer many benefits, such as low tax rates and access to the European Union market, it’s important to consider individual circumstances before making a decision. Factors such as income level, investment portfolio, and business operations can all impact the advantages and drawbacks of obtaining Bulgarian tax residency. Consulting with a professional can help you determine whether or not it’s the right choice for you.
The entire list of signatory countries can be found on the website of National Revenue Agency.