As of 1 January 2009 several amendments to the international tax law provisions of the Bulgarian Corporate Income Tax Act have been introduced.
Dividends distributed to companies which are tax resident in EU/ EEA countries are exempt from the 5% withholding tax, regardless of the percentage they are holding in the Bulgarian companies and regardless of the period for which this holding has been maintained. In the past, companies receiving dividends from Bulgarian entities had to meet the conditions of the EU Parent – Subsidiary Directive in order to obtain relief from the 5% withholding taxation.
Capital gains deriving from the sale of securities through a regulated stock exchange of an EU/EEA country are now explicitly exempt from taxation.  Since 2007 gains realized from trade of securities on the Bulgarian Stock Exchange have been exempt from taxation and now the same treatment applies with regard to securities disposed of at any regulated stock market of an EU/EEA Member State.
Investors in the sectors of agriculture, manufacturing, high technology and infrastructure will benefit from a 100% tax relief from corporate income tax for five years provided the invested amount in each one of the 5 years is above 5.1 million euro. This new rule extends practically the scope of the already applicable tax relief which, however, was limited to investments in the manufacturing sector in regions with high unemployment.
Tax treaty reliefs from withholding tax on cross-border payments are subject to an advance clearance procedure with the tax authorities in Bulgaria in the event the amounts involved exceed approximately EUR 50 000 a year. Unlike in the past, when the tax authorities were considering as sufficient a beneficial ownership declaration of the payment recipients they now investigate also the substance of the entity receiving the payment and its role in the supply chain. Also transfer pricing aspects are considered to ensure that the treaty benefits do not extend beyond arm’s length prices.