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4.1. Domestic PE of a Foreign Entity

Unless a tax treaty provides otherwise, a non-resident person is deemed to have a permanent establishment (PE) in Bulgaria if it has therein at its disposal a fixed place of business from which it carries out, wholly or partly, its business. This includes:

  • A place of management;
  • A branch;
  • An office, a plant;
  • A factory;
  • A workshop, retail shop, wholesale storage facility, service or sales outlet;  
  • A mine, quarry, prospecting drill, oil or gas well, spring or any other place of extraction of natural resources;
  • A building site or construction site or installation project;
  • A dependent agent having the authority to conclude contracts on behalf of the non-resident; or
  • In the absence of a fixed place of business or dependent agent, the continuous performance of commercial transactions in Bulgaria.

Bulgarian domestic law does not specifically include in its permanent establishment (‘PE’) definition the constitution of service PE on the completion of a specific number of days. However, certain Bulgarian treaties (for e.g., those with Armenia, China, Czech Republic, United States of America) provide specifically for service PEs, all of which require the physical presence of employee or personnel of the non-resident company for a prescribed period (ranging between 6 and 12 months) within any 12-month period in Bulgaria. Certain tax treaties (e.g., those with Austria, France, Germany, India) do not contain a specific service PE clause.