SolvedDT4102 | Double Taxation Relief Manual: Bulgaria: Treaty summary
From HM Revenue & Customs · Double Taxation Relief Manual
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 gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 5% (Note 1) | 10 |
| Dividends on direct investments | 0% (Note 1) | 10 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner must be a company resident in the other state | 10 |
| Interest | 5% (Note 2) | 11 |
| Royalties | 5% | 12 |
| Government pensions | Taxable only in Bulgaria unless the individual is resident and national of the UK | 18 |
| Other pensions | Taxable only in the UK if subject to tax in the UK (Note 3) | 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
between companies, where one company holds directly at least 10% 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% 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
lump sum payments derived from a pension scheme established in Bulgaria