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💰 In today’s video, I’ll explain how to declare dividends from your Bulgarian company.
How to Declare Dividends from a Bulgarian Company
Dividends are the profit your company distributes to its owners after corporate tax is paid. In Bulgaria, you don’t have to wait until the end of the year — dividends can be distributed quarterly, even in advance, as long as your company has generated enough profit.
To distribute dividends, your company must:
- Show a positive financial result (profit)
- Be up to date with tax filings and accounting records
Here’s how the process works:
- 1️⃣ A shareholder resolution is signed to approve the dividend distribution (this is done for each dividend distribution)
- 2️⃣ Your accountant prepares the documents and calculates the 5% withholding tax
- 3️⃣ The dividends are paid to the shareholder(s)
- 4️⃣ The withholding tax is declared and paid to the NRA by the end of the month following the quarter
Dividend income and the 5% tax are reported to the Bulgarian tax office every quarter. The tax is paid no later than the end of the month following the quarter in which dividends were distributed. If you’re a foreigner, check if there’s a double taxation treaty between Bulgaria and your country — this may reduce or eliminate the tax on dividends.
It’s important to follow the correct process. Improper or undeclared distributions can lead to fines and interest and can be considered as hidden distribution of dividends.
If you want to distribute dividends from your Bulgarian company, our team at ASB can take care of the full process — accurately and on time.
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