• Switzerland - Bulgaria
    New tax treaty approved by Bulgaria

    27-11-2012

    Switzerland approved the new Bulgaria - Switzerland Income and Capital Tax Treaty on 21 November 2012. Once the new treaty enters into force it will replace the 1991 Income and Capital Tax Treaty between the two countries.

    The treaty will come into force after the two countries exchange ratification instruments. The provisions of the treaty will have effect from 1 January of the year following that in which the treaty enters into force.

    In accordance with the new treaty, the following withholding taxes will apply:

    • Dividends:
      • 0% if the beneficial owner of the dividends is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends for a period of at least 1 year prior to the payment of the dividends.
      • 0% if the beneficial owner of the dividends is a pension scheme.
      • 10% in all other cases.

    • Interest:
      • 0% on interest in respect of a debt arising from the sale on credit of equipment, goods or services.
      • 0% on interest in respect of a loan of whatever kind granted by a financial institution.
      • 0% on interest paid by a company to another company if the latter was related to the company paying the interest for a least 1 year prior to the payment of the interest by a direct participation in capital of at least 10% or if the two companies were owned by a third company which held directly at least 10% of the capital of the two companies for at least 1 year prior to the payment of the interest.
      • 5% in all other cases.

    • Royalties: 5% withholding tax on royalties.
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