Bulgarian Parliament Ratifies Treaty for Avoidance of Double Taxation

07/12/2007

The Bulgarian Parliament has ratified July 12th 2007 the Treaty for Avoidance of Double Taxation (TADT) between the United States and Bulgaria. The document was signed in Washington on Feb. 23 this year by Bulgaria's Minister of Finance Plamen Oresharski and the U.S. Deputy Secretary for the Department of Treasury, Robert M. Kimmitt.

The list of tax breaks available to residents of either state now includes a reduction from 10% to 5% of tax on copyright and licensing royalties and a tax exemption for cases when the beneficial owner of the dividends is a pension fund that is a resident of either state; a 5% tax on the gross amount of the dividends if the beneficial owner is a company that owns directly at least 10 percent of the voting stock of the company paying the dividends; 10% of the gross amount of the dividends in all other cases. U.S. companies shipped goods worth $490.5 mln to Bulgaria last year while Bulgarian exports to the U.S. topped $438.9 mln.

The Treaty should go for ratification by the U.S. Senate and will come into force as of January 2008.