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5.4. Tax Base for Non-Resident Entities

Non-residents with a PE in Bulgaria are taxed in much the same way as resident companies. Non-residents without a PE in Bulgaria are subject to withholding tax on the gross amount of specific Bulgarian source income types. However, a non-resident established in an EU or EEA member State who is not in a position to obtain full credit for the Bulgarian withholding tax in his country of residence, may elect to be assessed to Bulgarian corporate tax on the net amount of the relevant income stream. The difference between the corporate tax on a net basis and the withholding tax on a gross basis is then refunded to the non-resident up to the amount non-creditable in the relevant EU/EEA Member State.