Dividend tax in Bulgaria 2026

Dividends cost a flat 5%, withheld at source and final — among the lowest rates in Europe, and the plan to double it for 2026 was abandoned.

Bonus shares and capitalized profits escape entirely: stock dividends are simply not taxable.

At a glance

Rate	Base	Applies to
5%	Gross	Dividends, profit distributions and liquidation proceeds — final
0%	—	Stock dividends — new shares or increased nominal value from profits
0%	—	Interest on deposits with European Economic Area (EEA) banks; government, municipal and corporate bonds
10%	Gross	Interest paid by cooperatives to members
10%	90% of gross	Rental income — after the 10% fixed deduction (an effective 9%)

Bulgarian payers withhold the 5% at source; residents self-assess the same 5% on foreign dividends with treaty credits.

Non-residents face the identical 5% withholding — no penalty rate — with treaty relief on top.

The bank-interest exemption covers the whole European Economic Area (EEA) — moving deposits inside the zone keeps interest at 0%.
Royalties carry a 40% fixed cost deduction, then join the 10% flat base.
The 5% rate survived the 2026 budget debate — the proposed rise to 10% was withdrawn before adoption.

How are dividends taxed in Bulgaria?

A flat, final 5% withheld at source — and stock dividends (bonus shares) are entirely tax-free.

Is bank interest taxed?

Not if the bank is in the European Economic Area — 0%; bond interest (government, municipal, corporate) is exempt too.

Figures: tax year 2026, compiled from public sources. Not tax advice.