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Canada-Bulgaria Double Tax Treaty

Canada-Bulgaria Double Tax Treaty

Updated on Thursday 09th February 2017

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selling-a-property-in-bulgaria.jpgBulgaria has signed international tax treaties with over 60 countries for the prevention of double taxation. Bulgaria and Canada signed a double tax treaty in 1999. Our law firm in Bulgaria can offer you information about the provisions of this treaty and help you minimize the taxes that must be paid.


Avoidance of double taxation on income and capital in Bulgaria and Canada


The Bulgaria-Canada double tax treaty applies to the following taxes:


•in the case of Canada, the income and capital taxes imposed by the Government of Canada under the Income Tax Act;
•in the case of Bulgaria, individual income tax, corporate income tax and real property tax.

Application and interpretation of international treaties is complicated and it is advisable that professional assistance should be obtained before making any decision based on these treaties. Our attorneys in Bulgaria will be able to advise you on matters relating to Bulgaria-Canada double tax treaty.
 

Exemption or reduction of withholding tax in Bulgaria
 

Dividends payable to a nonresident by a Bulgarian company are subject to withholding tax of 5%.  A 10% withholding tax may be levied on interest, royalties and technical service fees (i.e. fees for the assembly of fixed assets, services of a consultancy nature and marketing research) earned by a nonresident in Bulgaria. Under the Bulgaria-Canada double tax treaty, a different degree of reduction and exemption in withholding tax is available to a Canadian company. Our Bulgarian lawyers specialize in taxation law and are ready to advise you on any enquiries on tax exemption under the treaty.

Under Bulgarian law, capital gains are included in taxable income and taxed at a corporate income tax rate of 10%. According to the treaty, a nonresident is subject to a full withholding tax of 10% on capital gains from the sale of shares in companies, the main assets of which are in real estate situated in Bulgaria through direct or indirect holding. However, gains on the disposal of shares listed on the Bulgarian and EU stock exchanges are exempt.


For more information on the Bulgaria-Canada double tax treaty and other taxation matters, please feel free to contact our law firm in Bulgaria.



 

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