In short
- Dividends are withheld at 5% by the company; a lower treaty rate is possible but only with the right paperwork, and it depends entirely on your specific double tax treaty.
- A salary or service-contract fee for actual work is taxed at Bulgaria's flat 10% plus social security, the same as for a resident.
- Owning shares in a Bulgarian company does not make you a Bulgarian tax resident — residency turns on physical presence, not ownership.
- You will very likely still owe something at home. A treaty relieves double taxation; it doesn't cancel your home-country filing obligation.
Two mechanisms, one important difference
A dividend is a distribution of already-taxed company profit — it isn't payment for work, and it carries no Bulgarian social security obligation. A salary or a fee under a management or service contract is payment for something you actually do, and it's taxed and insured the same way regardless of where the person doing the work happens to live. The two aren't interchangeable choices you can pick for tax convenience; which one applies depends on whether you're actually performing labour for the company or simply collecting the return on your ownership.
Route 1: dividends
Bulgaria withholds 5% on a dividend paid to an individual — resident or non-resident, the domestic rate is the same. The company withholds and remits the tax; you receive the net amount. Full mechanics of the 5% rate and worked examples: dividend tax calculator.
Where it gets genuinely case-specific: Bulgaria has an extensive network of double tax treaties, and some of them set a reduced withholding rate on dividends below the domestic 5% — but the exact reduced rate, and whether it applies at all, depends entirely on the specific treaty between Bulgaria and your country of tax residence. As one verifiable example, under the Bulgaria–UK treaty, dividends on qualifying direct investment (broadly, a company shareholder meeting the treaty's ownership threshold) can be taxed at 0%, while portfolio dividends remain at 5% — in other words, for an individual shareholder the treaty doesn't automatically improve on the domestic rate. We're not going to guess at rates for treaties we haven't checked for your specific country: if a reduced rate might apply to you, it needs verifying against the actual treaty text and normally requires a tax residency certificate filed with the company in advance of the distribution, not claimed retroactively.
Route 2: a management or service contract
If you actually work for the company — managing it day-to-day, delivering services to it — that's employment or contractor income, not a return on capital, and Bulgaria taxes it as such: a flat 10% personal income tax, plus social security contributions if you're insured through the company (as director under a management contract, or as a self-insured person). This is the same regime that applies to a Bulgarian-resident owner-director; there's no separate, lighter track for a non-resident who happens to be doing the work remotely. Full breakdown: taxes and social security in Bulgaria 2026.
In practice, many non-resident owners use a mix — a modest management-contract salary that satisfies social security registration requirements, topped up with dividends for the rest. Which split makes sense depends on your specific numbers; see salary calculator and dividend tax calculator to compare.
The tax-residency trap: owning ≠ living
This is worth stating plainly because it's a common source of confusion: owning a Bulgarian company does not, by itself, make you a Bulgarian tax resident. Bulgarian individual tax residency is determined by physical presence and personal ties, not by shareholding. The main test is spending more than 183 days within any 12-month period physically present in Bulgaria; residency status then attaches to the calendar year in which the 183rd day is exceeded. There's a second, independent test — having your "centre of vital interests" in Bulgaria (family, home, main economic activity) — which can trigger residency even without meeting the day count, but simply holding shares in an EOOD isn't a factor in either test.
In other words: a founder who runs their Bulgarian company entirely remotely and never sets foot in the country stays a tax resident of wherever they actually live, and Bulgaria's 5% (or 10% + social security) is simply the Bulgarian-source tax on that specific income stream — not a claim on their overall worldwide tax position.
What you still owe at home
Because Bulgaria isn't where you're tax resident, the Bulgarian withholding is very unlikely to be the end of the story. Most countries tax their residents on worldwide income, which means dividends and salary received from your Bulgarian company are likely reportable — and potentially taxable — in your own country of residence as well. A double tax treaty, where one exists between Bulgaria and your country, exists specifically to prevent that from meaning tax twice on the same money: typically by giving you a credit at home for the Bulgarian tax already paid, or by exempting the income at home if it was already taxed in Bulgaria. Which mechanism applies, and how it's calculated, is set out in the specific treaty and in your home country's domestic rules for applying it — it is genuinely not something we can generalise across every jurisdiction a reader might be in. If cross-border treatment of this income matters to your planning, that half of the question belongs with an adviser licensed in your own country, alongside what we can tell you about the Bulgarian side.
Frequently asked questions
What is the withholding tax on a dividend paid to a non-resident owner?
+−
Bulgaria withholds 5% on the gross dividend paid to an individual, resident or non-resident. If a double tax treaty between Bulgaria and your country of residence sets a lower rate, that rate can apply instead — but only with the correct documentation (typically a tax residency certificate) filed in advance.
Does owning a Bulgarian company make me a Bulgarian tax resident?
+−
No. Bulgarian tax residency for an individual is based on physical presence — broadly, spending more than 183 days in Bulgaria within a 12-month period — or having your centre of vital interests there, not on owning shares in a Bulgarian company.
If I take a salary instead of a dividend, what do I owe?
+−
A salary or management-contract fee for actual work performed is subject to Bulgaria's flat 10% personal income tax plus social security contributions, calculated the same way as for a resident. It's taxed as Bulgarian-source income regardless of where you live.
Do I still owe tax at home if I've already paid Bulgarian withholding tax?
+−
Very likely, yes, on the underlying obligation — though a double tax treaty (if one exists between Bulgaria and your country) determines how the Bulgarian tax already paid is credited or exempted, not whether you have to report the income at home in the first place. This depends entirely on your specific treaty and should be checked with an adviser in your own country.
Sources
Corporate Income Tax Act; Personal Income Tax Act; Tax-Insurance Procedure Code; Convention between Bulgaria and the UK for the Avoidance of Double Taxation (2015); nra.bg. Verified 4 September 2026.
Important
Bulsmetka is a private accounting firm licensed to advise on Bulgarian tax matters, not on the tax law of your country of residence. Cross-border treaty questions specific to your case should also be checked with an adviser in your own country.