Distribution of Dividends from a Bulgarian Company

Distributing dividends in Bulgaria means paying out part of a company’s profit to its owners, after the corporate tax has been paid. To do it correctly, you must follow specific steps and deadlines.

When Can Dividends Be Distributed?

Dividends can be paid:

Annually
Quarterly
In advance, if the company has current profits

You don’t have to wait until the end of the year. If your company has profit during the year, dividends can be distributed in the same year.

What Are the Conditions for Dividend Distribution?

The company must meet two main criteria:

It must have realized a profit
Its accounting and tax filings must be up to date

What Is the Dividend Distribution Process?

The process includes four key steps:

1️⃣ A shareholders’ resolution is signed for each dividend payment
2️⃣ The accountant calculates the 5% dividend tax and prepares the documents
3️⃣ Dividends are paid to the shareholders
4️⃣ The tax is declared and paid to the National Revenue Agency (NRA) by the end of the following month

Deadlines:

The dividend tax must be paid by the end of the month following the quarter in which dividends were paid. Reports must be submitted quarterly (four times per year).

📌 Example: If you distribute dividends in June, you must submit the declaration and pay the tax by the end of July.

What If You Are a Foreign Shareholder?

If you are not tax-resident in Bulgaria:

Check whether a Double Taxation Treaty (DTT) exists between Bulgaria and your country
This may reduce or eliminate the 5% dividend tax

Risks of Non-Compliance

If the procedure is not followed correctly, you may face:

Fines
Interest charges
Penalties for hidden profit distribution

Need Help? 🔎 The T&G Consulting team can:

Prepare the necessary documentation
Calculate and pay the tax
Submit all declarations on time

👉 With us, you’re guaranteed accurate and timely execution of the entire process. More helpful and interesting information is available on our partners’ channel HERE.