Double Taxation Avoidance Convention between Bulgaria and Norway

(Last Updated On: 01/09/2015)

Bulgaria/August 2015

On 8th of July 2015, the Bulgarian Parliament ratified The Convention for Avoidance of Double Taxation concluded with the Kingdom of Norway.

The convention shall apply to persons who are residents of one or both of the Contracting States and to any substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The existing taxes to which the Convention shall apply are taxes on income, municipal tax on income, tax relating to submarine petroleum income, pipeline transport of petroleum, national tax on remuneration to non-resident artistes, corporate income tax and patent tax.

Taxation of Income

Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. Also, business profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. Profits of an enterprise of a Contracting State from the operation of ships, aircraft, and railway or road transport vehicles in international transport shall be taxable only in that State.

Withholding taxes

According to the Convention, dividends shall be taxed with 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 % of the capital of the company paying the dividends. A tax rate of 15 % per cent of the gross amount of the dividends shall be applicable in all other cases.  Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. Such interest may also be taxed in the State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other State, the tax charged shall not exceed 5 %. Royalties’ withholding tax charge shall not exceed 5 % of the gross amount of the royalties paid.

The Convention shall enter into force on the date of a ratification notification by Norway, which is pending at this stage.

Petar Varbanov, LL.M.
Attorney at Law
Legal & Tax Adviser
Direct tel: +359 2 988 69 75
Email: Petar.Varbanov@eurofast.eu

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