Bulgaria US Tax Treaty: the details

Bulgaria has signed double taxation treaties with over 70 countries, guaranteeing a better tax scheme for foreign investors that will not have to be subject to paying tax twice.

These treaties are part of what makes Bulgaria an attractive destination for natural or legal persons who operate in multiple countries and are looking to maximize their profit by keeping their taxes manageable. 

The United States is among the countries that have signed the treaty to avoid double taxation in Bulgaria. In fact, thanks to the economic, cultural and environmental benefits that Bulgaria offers, more and more Americans are choosing to settle themself or their company in the country.

So if you are interested in moving and opening a company in Bulgaria, here is all you need to know about Bulgaria – US tax Treaty.

What is a Double Taxation Treaty?

As the name already suggests, a double taxation agreement is a contract signed by two sovereign states regarding, in this case, double taxation, or in fact, the avoidance of double taxation for companies or individuals generating income in either of these states. 

Double Tax Treaties have the goal of minimizing or alleviating territorial double taxation of the same income by two different countries. 

Bulgaria Double Taxation Treaties: which countries?

These are the countries that have double taxation agreements with Bulgaria:

Albania, Algeria, Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Democratic People’s Republic of Korea, the Republic of Korea, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malta, Morocco, Qatar, Moldova, Mongolia, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Spain, Singapore, Slovakia, Slovenia, South Africa, Sweden, Switzerland, Syria, Thailand, Turkey, Ukraine, the United Arab Emirates, the United Kingdom, the United States of America, Uzbekistan, Vietnam, Yugoslavia, Zimbabwe.

Read more about Bulgaria Freelance Tax: the complete Guide

Bulgaria US Tax Treaty: overview and details

The United States is on the list of countries with which Bulgaria has signed double taxation treaties. 

This agreement was signed in 2007 and it applies to individuals that reside in either of the contracting states. 

The tax under the scope of this agreement is income tax. Though the treaty also helps to prevent fiscal evasion with both countries collaborating toward this goal. 

For Bulgaria, the agreement talks about income tax or corporate tax and it considers the origin state where the income that a person or company makes.

In the case of the US, the double taxation treaty covers the federal income tax, by the Internal Revenue Code, and taxes on income generated from the investment made by foreign private foundations. 

When it comes to companies, the treaty covers permanent establishments, including branches opened by American companies in Bulgaria, and Bulgarian subsidiary companies opened in the territory of the United States. 

Read more Bulgaria Self Employed tax Calculator: Why you need an Accountant

Americans in Bulgaria: why rely on a Bulgarian accountant

If you find yourself or your company under the scope of this treaty, the wisest decision is to find an accountant who can deal with the requirements, deadlines and details the process of declaring your taxes under the double taxation treaty implies. 

We recommend opting for an accounting company in Sofia with a reliable reputation and valuable experience that can be invested in your business and translated into growth. Accountancy Bulgaria is our number one choice. 

Not only does Accountancy Bulgaria have years of experience (more than 30!) in the financial world but also has multilingual experts who can take care of all your accounting needs, from bookkeeping to tax reports, company formation, and tax advisory, ensuring you can focus on your business.