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HMRC internal manual

Double Taxation Relief Manual

Bulgaria: Treaty summary

Treaty summary

The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which Bulgaria is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.

In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on

Portfolio dividends 5% (note 1) Article 10
Dividends on direct investments 0% (note 1) Article 10
Conditions for lower rate on dividends on direct investments The beneficial owner must be a company resident in the other state Article 10
Interest 5% (note 2) Article 11
Royalties 5% Article 12
Government pensions Taxable only in Bulgaria unless the individual is resident in, and a national of, the UK Article 18
Other pensions Exempt from tax in Bulgaria if subject to tax in the UK (note 3) Article 17
Arbitration No n/a






                                                                                                                                                                                                                 Note 1: With the exception of property income dividends, all dividends beneficially owned by a company resident in a contracting state are taxable only in that state regardless of the level of the holding. Dividends beneficially owned by a pension scheme are taxable only in the state in which the pension scheme is resident.

Note 2:  Interest paid in the following circumstances is taxable only in the state of residence of the beneficial owner of the interest:

  • with respect of indebtedness arising as a consequence of the sale on credit of any equipment, merchandise or services;
  • on any loan of whatever kind granted by a financial institution;
  • to a pension scheme;
  • to the Government of that other State, a political subdivision or local authority thereof or to the central bank of that other State; or
  • between companies, where one company holds directly at least 10 per cent of the capital of the other company for at least one year prior to the payment of the interest or where both companies are held by a third company which holds directly at least 10 per cent of the capital of both aforementioned companies for at least one year prior to the payment of the interest.

Note 3: The following payments are taxable only in Bulgaria:

  • Pensions and other similar remuneration paid under a public scheme which is part of the social security system of Bulgaria; and
  • Lump sum payments derived from a pension scheme established in Bulgaria.