The amending protocol to the 2010 income and capital tax treaty between Bulgaria and Germany was signed on 21 July 2022. The protocol is the first to amend the treaty and includes the following changes:

• The Title and Preamble are updated in line with OECD BEPS standards;
• Article 3 (General Definitions) is updated in regard to the definition of the term "Germany";
• Article 22 (Elimination of Double Taxation) is updated in regard to Bulgaria, which applies the credit method in general (previously applied the exemption method in general, with a credit for dividend, interest, royalties, and certain capital gains);
• Article 24 (Mutual Agreement Procedure) is updated to add that where a competent authority does not consider a taxpayer's objection to be justified, it shall notify or consult the competent authority of the other Contracting State without delay; and
• Article 28 (Application of the Agreement in Special Cases) is replaced with a new Article 28 (Prevention of Treaty Abuse), providing that a benefit under the treaty shall not be granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the treaty.

The protocol will enter into force once the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.