Bulgaria Dividend Tax 2026: How to Pay Yourself
Taking profit out of a Bulgarian EOOD or OOD costs 5% in 2026, a final tax the company withholds and pays for you. Combined with the 10% corporate tax, the total burden on distributed profit is roughly 14.5%. What catches people out is the timing rule: the tax is due by the end of the month following the quarter in which the decision to distribute was taken, whichever quarter the money reaches your bank account in.
Current as of 23 September 2026. The 5% rate is set by Art. 46(3) of the Personal Income Tax Act (PITA) for individuals and Art. 194 and Art. 200(2) of the Corporate Income Tax Act (CITA) for non-resident companies. Bulgaria has used the euro since 1 January 2026 at the fixed rate €1 = 1.95583 BGN. Verify with the NRA; this is general information, not tax advice.
The rate, by who receives the dividend
| Recipient | Rate in 2026 | Who pays it over |
|---|---|---|
| Bulgarian resident individual | 5% final tax | the company, on distribution |
| Non-resident individual | 5%, or lower under a tax treaty | the company, on distribution |
| Bulgarian resident company (a corporate partner) | not taxed | nobody |
| Company resident in the EU/EEA | generally 0% under Art. 194 CITA | nobody |
| Company resident outside the EU/EEA | 5%, or lower under a tax treaty | the company, on distribution |
A proposal to double the dividend tax to 10% appeared in the first draft of the 2026 state budget and did not survive. The rate for the whole of 2026 is 5%.
The real number: 14.5% end to end
Bulgaria taxes distributed profit twice: once at the company and once at the shareholder. Work it through with a company that earns €120,000 before tax:
Pre-tax profit 120,000 €
Corporate income tax at 10% -12,000 €
--------------------------------------------------
Distributable profit 108,000 €
Dividend of 80,000 €, tax at 5% -4,000 €
--------------------------------------------------
Reaching the owner 76,000 €
On the slice of profit that actually travelled to the owner, the combined tax is 14.5%: €12,889 of corporate and dividend tax on €88,889 of pre-tax profit. Retained profit stays taxed at 10% only, and the second layer never triggers until you distribute. The corporate side is covered in the Bulgaria corporate tax guide.
Compare that with paying yourself a salary through a management contract. Social security applies up to a monthly insurable income ceiling of €2,300 (from 1 August 2026), then 10% income tax on top; the company deducts the salary as an expense. Neither route is always cheaper. The salary route buys you pension and health cover and reduces taxable profit; the dividend route is flat and simple. Most owners run both, which is why the social security rules for owners and managers matter before you decide the split.
The corporate step you cannot skip
A dividend is not a transfer. It is a corporate decision, and Bulgarian company law puts it in the hands of the shareholders:
- In an OOD, the general meeting adopts the annual report and balance sheet and decides on the distribution of profit and its payment (art. 137(1)(3) of the Commerce Act).
- In an EOOD, the sole owner of the capital decides alone, in writing, on the matters within the general meeting’s competence (art. 147 of the Commerce Act).
Two practical consequences. First, you distribute profit shown in adopted annual financial statements, so your annual financial statements have to be finished and adopted before the decision, not after. Second, the written decision is the document the tax clock runs from. Date it, sign it, keep it.
Distributing the current year’s profit before the year closes is a grey area. The NRA has treated advance distribution of current-year profit as a dividend for tax purposes, and doing it properly requires interim financial statements and a defensible profit forecast. If you need money out mid-year, take advice first rather than moving cash and labelling it later.
The timing rule that trips people up
The company withholds the tax and pays it by the end of the month following the quarter in which the distribution decision was taken (Art. 65(3) PITA for individuals; Art. 202 CITA for non-resident companies). The same deadline applies to the return, the declaration under Art. 55(1) PITA or Art. 201(1) CITA.
| Decision taken in | Return and payment due |
|---|---|
| Q1 2026 (Jan–Mar) | 30 April 2026 |
| Q2 2026 (Apr–Jun) | 31 July 2026 |
| Q3 2026 (Jul–Sep) | 2 November 2026 (31 October is a Saturday) |
| Q4 2026 (Oct–Dec) | 1 February 2027 (31 January is a Sunday) |
Read the table twice if you are planning a distribution now. A decision signed on 30 September 2026 puts the tax in Q3 and due on 2 November. Signing the same decision on 1 October moves it to Q4 and due on 1 February 2027, three months later.
There is one more filing that is easy to forget: the annual information return under Art. 73(1) PITA, listing dividends paid to individuals, is due by the end of February of the following year. For 2026 dividends that is 1 March 2027, because 28 February 2027 is a Sunday.
Non-resident owners: treaty relief in practice
If the shareholder is an individual or a company outside the EU/EEA, the default is 5% withheld in Bulgaria. A double tax treaty can lower or remove it, but relief is not automatic. It runs through the procedure in Art. 135–142 of the Tax and Social Security Procedure Code (TSSPC), and it has two tracks:
- Below the TSSPC threshold (income to that recipient of up to €255,645.94 a year, the euro equivalent of the former BGN 500,000): the company applies the treaty itself, holds the evidence (certificate of tax residence, declaration of beneficial ownership, the contract or distribution decision) and files a declaration under Art. 142(5) TSSPC by 31 March of the following year.
- Above the threshold: advance clearance with the NRA before applying the reduced rate.
The paperwork that fails most often is the certificate of tax residence. It must cover the year of the distribution and it is issued by the shareholder’s own tax authority, so request it weeks before the decision. If you registered the company remotely, see how the identifiers fit together in TIN and Bulstat explained.
Hidden profit distribution: the expensive alternative
Bulgarian tax law has a specific answer for owners who take money out without calling it a dividend, such as the company car used privately, the “consulting fee” to a related party or the loan that never comes back. It is treated as hidden profit distribution, and it costs three times over:
- The expense is not recognised for corporate tax, so 10% is due on the amount.
- 5% dividend tax on the same amount.
- A penalty of 20% of the amount (Art. 267 CITA).
The penalty is not applied if the hidden distribution is declared in the annual corporate tax return under Art. 92 CITA for that year. That only helps if you find the item before a tax audit does.
A clean sequence for a distribution
- Close the year and have the annual financial statements adopted.
- Confirm there is distributable profit after covering prior-year losses.
- Sign the written decision with the date, amount, split per shareholder and payment terms.
- Collect treaty documents if any shareholder is a non-resident.
- Withhold 5% and diarise the quarterly deadline from the decision date.
- File the Art. 55 PITA / Art. 201 CITA return and pay the tax by that date.
- Pay the net amount to the shareholders.
- Note the Art. 73 return, due by the end of February of the following year.
Common mistakes
- Running the clock from the payment date. The trigger is the decision. A December decision paid in March is still a Q4 liability.
- No written decision at all. Sole owners often just transfer the money. Without the decision, the payment looks like a shareholder loan or a hidden distribution.
- Distributing more than the adopted profit. Prior-year losses have to be covered first.
- Assuming an EU parent is automatically exempt. The Art. 194 CITA exemption has conditions on residence and status, so check them for the specific shareholder.
- A residence certificate for the wrong year. Treaty relief is claimed per year of income.
- Forgetting the euro rounding. Amounts are declared and paid in euro; see Bulgaria and the euro.
FAQ
Is the 5% dividend tax final, or do I also declare it at home? It is final in Bulgaria, so the individual does not need to file an annual return for it. Whether your country of residence taxes it again depends on your treaty and your own residence rules.
Can I take a dividend if the company still owes VAT or social security? There is no legal prohibition, but distributing while public liabilities are unpaid is a poor position in an audit and can affect a manager’s exposure. Clear the liabilities first.
How often can I distribute? As often as the shareholders decide, subject to there being adopted, distributable profit. Each decision is its own taxable event with its own quarterly deadline.
Do I pay social security on dividends? No. Dividends are not insurable income. But an owner who actually works in the company owes social security on that basis regardless of how profit is taken out.
What if I hold the shares through another company? Dividends to a Bulgarian resident company are not taxed, and dividends to an EU/EEA resident company are generally exempt under Art. 194 CITA. That is the usual structure for holding groups.
We prepare the distribution decision, run the treaty documentation for non-resident shareholders, file the quarterly return and keep the Art. 73 return on the calendar. See our accounting services and pricing.