Tax residency certificate of a company
Do you need a tax residency certificate for your Bulgarian company?
The subject of this article is to explain the procedure of obtaining a tax residency certificate of a Bulgarian company.
During the last year, most of the financial institutions which open accounts similar to the bank accounts need a tax certificate for the company, issued by the National revenue agency (tax authority). The same certificate is also needed in case you open a bank account of Bulgarian company in a foreign bank in EU.
Few years after the European regulation, Bulgaria changed its tax law and provided the possibility the National revenue agency to issue a tax certificate for a Bulgarian company.
The procedure is new to our legal system and to most of the consultants, incl. lawyers and accountants. Like any other procedure connected with the tax authorities, this one has its own particularity.
The criteria for an entity to be considered a tax resident in Bulgaria are set out in Art. 3 of the Corporate Income Taxation Act. The following entities are considered as tax residents in Bulgaria:
- legal entities established under the Bulgarian law;
- companies established under Regulation (ЕC) No. 2157/2001 of the Council, and cooperative societies established under Regulation (ЕC) No. 1435/2003 of the Council where they have their registered office within the country and are entered in a Bulgarian register.
All starts with an application submitted to the Tax authorities, along with a power of attorney and several certificates. Of course, our practice had shown that most often the tax authorities request more documents and proofs before issuing the certificate.
Usually, the time frame is between 7 and 14 days from submitting the application and it can be extended in case of additional requested documentation.
The tax residency certificate of a company is always issued to be used in a specific country and for a specific year.
Please, keep in mind that the procedures for issuing a tax residency certificate for a natural person and a tax residency certificate for a company are different. If you want to learn more about the tax residency of a natural person, you can find more information here.
Our lawyers can fully assist you with professional advises, along with the preparation of the required documents for the initiation of the tax residency process plus representation in front of the tax authorities.
For any questions and more information about the tax residency of a Bulgarian company, please do not hesitate to contact us.