US Proceeds with Treaty Procedures

02/28/2008

A Treaty for Avoidance of Double Taxation (TADT) between the United States and Bulgaria was signed in Washington D.C. on February 23, 2007, by the Minister of Finance of Bulgaria Plamen Oresharski and the Deputy Secretary of the U.S. Department of Treasury, Robert M. Kimmitt. The two sides signed February 26th, 2008, an additional protocol that had to accompany the treaty. The Treaty and the protocol are now back to the U.S. State Department for transmittal to the Senate. The Treaty and protocol must undergo formal ratification procedures in both the U.S. Senate and the Parliament of Bulgaria. Once ratified, they will take effect on January 1 of the following year.

The TADT applies to direct taxes only and excludes indirect levies, such as value-added and excise taxes, as well as all social contributions. TADT applies to all sources of income that residents of either state have received "at source" in the other state. The TADT will reduce the tax burden for residents of both states, which will stimulate cross-border trade and investment.

For more information about the tax benefits offered by the Treaty for Avoidance of Double Taxation and for answers to frequently asked questions, please see More Information. To view the text of the U.S.-Bulgaria treaty, please see Text of the Treaty.

If you have additional questions about the treaty, please send them to: sofia@usembassy.bg.