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Treaty for Avoidance of Double Taxation

A Convention between the Government of The Republic of Bulgaria and the Government of The United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (referred to hereafter as the 'CADT') was signed in Washington D.C. on February 23, 2007, by the Minister of Finance of Bulgaria Plamen Oresharski and the Deputy Secretary of the U.S. Department of Treasury, Robert M. Kimmitt. The CADT entered into force on December 15, 2008.  A Protocol amending the CADT was signed at Sofia on February 26, 2008, and entered into force on December 15, 2008.

The CADT applies to direct taxes only (Article 2, Para. 1 of the CADT) and excludes indirect levies, such as value-added and excise taxes, as well as all social contributions (Article 2, Para. 3 of the CADT).  The CADT applies to all sources of income that residents of either state have received "at source" in the other state (Article 2, Para. 2 in connection with Article 6, Para. 1 et al. of the CADT).  The CADT will reduce the tax burden for residents of both states, which will stimulate cross-border trade and investment. The CADT may not increase the tax burden on a resident of a Contracting State beyond the burden determined under domestic law. 

For more information about the tax benefits offered by the CADT and for answers to frequently asked questions, please see here.

To view the text of the CADT, please see here.

If you have additional questions about the CADT, please send them to: sofia@usembassy.bg