Treaty between Bahrain and Bulgaria for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains

Effective from January 2011, we highlight hereafter the main rules provided for by the tax treaty between Bahrain and Bulgaria:

Permanent establishment

The term ‘permanent establishment' means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.

Dividends

Dividends paid by a company which is a resident of a contracting state to a resident of the other contracting state may be taxed in that other state.

However, such dividends may also be taxed in the contracting state of which the company paying the dividends is a resident and according to the laws of that state, but if  the beneficial owner of the dividends is a resident of the other contracting state, the tax so charged shall not exceed 5% of the gross amount of the dividends.

Income from debt claims