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INTERNATIONAL TAXATION
Individuals, regardless of their citizenship, can find themselves in a situation of double taxation when receiving income from two different countries. For example, if you hold citizenship in one country but earn income from another, both countries may claim the right to tax that income. A similar situation applies to legal entities—for instance, if a company registered in one country conducts business or has a branch in another, both countries may have grounds to tax the income generated from that activity.
This situation can lead to significant financial losses and administrative difficulties. To protect individuals and legal entities from this, many countries have entered into Double Taxation Avoidance Agreements (DTAAs), which regulate how and where taxes should be paid.
In Bulgaria, individuals are required to declare and tax their worldwide income if they are classified as tax residents. The criteria for this are clearly defined in the Personal Income Tax Act (Article 4). A tax resident is a person who has a permanent address in Bulgaria, resides in the country for more than 183 days, is sent abroad by Bulgarian organizations, or has the center of vital interests in Bulgaria. It is important to make a comprehensive assessment of these circumstances because, for example, a person may have an address in Bulgaria but their center of vital interests is in another country, which changes their tax status.
At Stan Consulting BG Ltd., we offer a comprehensive analysis of your tax status in the context of international taxation. We will advise you on which country should be your tax jurisdiction and where you should declare and pay your taxes. If you have paid tax twice on the same income, we will help you recover the excess amounts paid by applying the provisions of the relevant Double Taxation Avoidance Agreements.
Contact us today to receive professional and reliable assistance with international taxation and ensure peace of mind and optimization of your tax obligations.