Reference · 2026
Paying yourself from a Bulgarian company
The 5% dividend tax, how it stacks with the 10% corporate rate, when salary beats a distribution, the resolution and filing steps the NRA expects, and what happens when you are tax resident somewhere else.
- Dividend tax
- 5%
- Corporate tax
- 10%
- Effective total
- 14.5%
Four ways money leaves the company
Each route has a different tax and insurance profile. Most owner-managers use a combination rather than one of them alone.
| Route | How it is taxed | Effective cost |
|---|---|---|
| DividendThe company pays 10% corporate tax on profit, and 5% is withheld when the distribution is paid to an individual shareholder. On EUR 100,000 of profit that is EUR 10,000 corporate tax and EUR 4,500 dividend tax, leaving EUR 85,500. | 10% corporate tax, then 5% withholding | 14.5% total on profit |
| Manager's salarySalary is deductible for the company, so it removes 10% corporate tax, but social and health contributions apply up to the monthly maximum insurable income. Most owner-managers run a modest salary and take the rest as dividends. | 10% flat personal income tax plus social security | Around 30% to 33% all-in on capped bases |
| Self-insured ownerAn owner working in their own company without an employment contract can register as self-insured and pay contributions on a chosen base between the minimum and maximum, which is usually cheaper than a full manager contract. | 10% personal income tax on the insurable base | Lower fixed monthly cost |
| Dividend to an EU parentDistributions to a company resident in the EU or EEA are exempt from the 5% withholding under the Parent-Subsidiary regime, which is why holding structures often sit above a Bulgarian trading company. | 0% withholding | 10% total on profit |
What the numbers look like
Profit before tax, fully distributed to an individual shareholder, before any tax due in your country of residence.
| Profit | Corporate tax 10% | Dividend tax 5% | In your pocket |
|---|---|---|---|
| EUR 50,000 | EUR 5,000 | EUR 2,250 | EUR 42,750 |
| EUR 100,000 | EUR 10,000 | EUR 4,500 | EUR 85,500 |
| EUR 250,000 | EUR 25,000 | EUR 11,250 | EUR 213,750 |
| EUR 500,000 | EUR 50,000 | EUR 22,500 | EUR 427,500 |
Model your own figures, including a salary layer, in the tax calculator.
How to pay a dividend correctly
1. Close the period and confirm distributable profit
Dividends can only be paid out of profit shown in accounts approved by the shareholders. In practice that means annual statutory accounts, or interim accounts prepared and approved specifically for an interim distribution.
2. Cover the statutory reserve if it applies
Where the articles or the Commerce Act require it, an allocation to reserves comes before distribution. Your accountant checks this against the articles of association before any transfer is made.
3. Pass a shareholders' resolution
A written resolution of the general meeting (or the sole owner's decision for an EOOD) states the amount, the period it relates to and the payment date. Without this document the payment is not a dividend and the NRA can recharacterise it.
4. Withhold 5% and pay the tax
The 5% is withheld at source. It is declared and paid by the end of the month following the quarter in which the distribution was resolved, on the quarterly Article 55 return.
5. Transfer the net amount and keep the file
Pay from the company account to the shareholder, referencing the resolution. Keep the resolution, the approved accounts and the tax receipt together; this is the pack your home-country accountant will ask for.
If you live outside Bulgaria
Germany
Bulgarian withholding is capped at 5% by treaty. Germany taxes the dividend at Abgeltungsteuer of 25% plus solidarity surcharge, with the Bulgarian 5% credited against it. Check CFC (Aussensteuergesetz) exposure if the company is passive.
Netherlands
Dividends usually fall in Box 2 at the applicable rate if you hold 5% or more, with credit for the Bulgarian 5%. Substance in Bulgaria matters for how the Belastingdienst views the structure.
Belgium / France / Austria
All three tax personal dividends at a flat or scheduled rate and give credit for treaty withholding. The saving comes from the 10% corporate layer, not from avoiding personal tax.
United States
A US person owning an EOOD faces controlled foreign corporation rules, GILTI and Form 5471 reporting. Distributions interact with previously taxed income, so coordinate with a US CPA before the first payout.
Bulgarian tax resident
The 5% withheld is final. There is nothing further to declare on the dividend itself, which is why owners who actually relocate keep the full 14.5% effective outcome.
Six mistakes to avoid
- Taking money before the accounts are approved. Transfers with no resolution behind them are treated as a loan to the shareholder or as hidden profit distribution, which attracts penalties and can be taxed as employment income.
- Forgetting the quarterly Article 55 declaration. The 5% is due whether or not the return is filed, and interest accrues from the deadline.
- Distributing more than the retained profit. A distribution that exceeds distributable reserves is unlawful and repayable, and it creates a corporate tax problem at year end.
- Assuming 5% is the total tax. If you live in a high-tax country, your own residence taxes the dividend on top, with credit for the Bulgarian 5%. The real advantage is the 10% corporate rate.
- Paying no salary at all while clearly working in the company. The NRA expects an owner-manager to be insured either through a contract or as a self-insured person.
- Ignoring exchange and reporting duties. Larger cross-border transfers can require statistical reporting, and your home bank may ask for the resolution as source-of-funds evidence.
Frequently asked questions
What is the dividend tax rate in Bulgaria in 2026?
5% withheld at source on distributions to individuals and to non-EU companies. Distributions to companies resident in the EU or EEA are exempt. Combined with the 10% corporate tax, the total effective burden on distributed profit is 14.5%.
When is the 5% dividend tax paid to the NRA?
It is declared and paid on the quarterly Article 55 return, due by the end of the month following the quarter in which the shareholders resolved the distribution, not the quarter the cash leaves the account.
Can I pay dividends monthly or quarterly?
Yes, as interim dividends, provided interim accounts show sufficient distributable profit and the shareholders approve each distribution. Most owners do it quarterly to keep the paperwork manageable.
Is salary or dividend better for an owner-manager?
A modest salary plus dividends is usually the best combination. Salary is deductible and gives you social and health insurance, but contributions make it more expensive per euro than the 14.5% dividend route once the insurable base is covered.
Do I pay tax again in my home country?
If you are tax resident elsewhere, yes, but the treaty credit for the Bulgarian 5% applies. The saving comes from paying 10% corporate tax instead of 20% to 30%, so more profit reaches the distribution stage.
Can my holding company receive the dividend tax free?
An EU or EEA resident parent company receives Bulgarian dividends without the 5% withholding. Non-EU parents are subject to the 5%, reduced further only where a treaty provides for it.
What documents prove a dividend was lawful?
Approved accounts for the period, the shareholders' resolution stating the amount and payment date, the bank transfer with a clear reference, and the Article 55 return with the tax receipt.
Want the payout structured properly?
Tell us where you live and how much you expect to distribute, and we will set the salary and dividend mix, prepare the resolutions and file the quarterly returns.
Related references
- Bulgaria tax facts 2026 - every headline rate on one citable page.
- Payroll and employer costs - what a manager salary actually costs.
- VAT registration guide - the other tax that catches new owners.
- Annual filing calendar 2026 - including the quarterly Article 55 deadlines.
- Accounting and bookkeeping fees - who prepares the resolutions and returns.
- EU tax comparison 2026 - how 14.5% compares across the union.