Application of TADT

The procedure by which the tax reliefs for foreign persons provided for in the double taxation avoidance agreements (DTAs) entered into force are applied, is regulated in the Tax-Insurance Procedure Code.

In order to apply the TADT, certain conditions must be met, which the foreign person must certify to the National Revenue Agency, namely that:

  • is a resident of the other country within the meaning of the relevant TADT;
  • is the holder of the income from a source in the Republic of Bulgaria;
  • does not own a place of business or a certain base on the territory of the Republic of Bulgaria, with which the relevant income is actually connected;
  • the special requirements for the application of the TADT or its separate provisions have been met.
  • In order to implement the TADT, the foreign person or his representative must submit a request on a form to the National Revenue Agency, to which evidence is attached that the grounds for applying the agreement are present.

Submission of the request

The request for the application of the TADT and the documents attached to it are submitted to the territorial directorate for the registration of the payer of the income or to the directorate where he is subject to registration.

When the payer is not subject to registration, the request and the documents attached to it are submitted to the Terrritorial Directorate of the NRA Sofia.

Simplified procedure

When a payer charges a foreign person with income subject to withholding tax, with a total amount of up to 500,000 BGN per year, a request for the application of TADT is not submitted.

When the simplified procedure is applied, the payer of income is obliged to declare by March 31 of the following year the amount of the income paid and the tax benefits granted. The declaration is made by submitting a declaration under Art. 142, para. 5 of the Tax-Insurance Procedure Code in connection with the application of the TADT in the territorial directorate where the payer of the income is registered or is subject to registration.

The following must be attached to the request:

  • Certificate that the recipient of the income is a resident within the meaning of the specific TADT for the relevant year/years in which the income was realized;
  • Declaration by the beneficiary under the agreement that he is the actual recipient of the income and the latter is not realized through a place of business in Bulgaria;
  • Certificate from the competent authorities of the other country proving the representative authority of the person/persons who signed the above declaration (most often this is an extract from the commercial register of the respective country);
  • Contract, invoices and other documents proving the nature and amount of income;
  • A reference from the payer’s accounting records proving that the income has been accrued;
  • Other information and written explanations, in case they are requested by the NRA authorities).

The deadline for receiving an opinion on the application of the TADT is 60 days from the submission of the request.

Long-term contracts

When the income is realized on the basis of long-term contracts or is realized by the same person on the same basis, a request for application of TADT is submitted once. Dividend income is not considered income of this type.

In the event of a change in any circumstance, the foreign person shall notify the territorial directorate within 30 days of the occurrence and.

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