Switzerland and Bulgaria Signed Revised Tax Agreement

Switzerland and Bulgaria Signed Revised Tax Agreement

Recently in Sofia the representatives of Switzerland and Bulgaria have signed a new version of bilateral double taxation agreement in the area of income and capital tax.

The new agreement replaces the agreement of October 28, 1991, and contains provisions on the exchange of information according to the internationally agreed standards of the OECD.

In the agreement both countries agreed that they may levy withholding tax of no more than 10% on dividend amounts. The dividends to be exempted from withholding tax if a beneficial company holds a stake of at least 10% in the capital of the distributing company for at least one year. Dividends paid to the national banks or pension funds of both countries are also exempted.

Both countries to charge withholding tax on interest payments at the rate tax not exceeding 5%. Interest payments between associated enterprises where one of them holds a stake of 10% in the capital of another for at least one year are not subject to withholding tax. Royalty payments are also exempted from withholding tax.

The new version of the agreement will come into force after it would be approved by parliaments of both countries.

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