On 22 July 2014, officials from Bulgaria and Norway signed a new income tax treaty. Once in force and effective, the treaty will replace the 1988 tax treaty between the two countries.
The treaty covers Bulgarian personal income tax, corporate income tax and patent tax, and covers to the following Norwegian taxes:
When a person, other than an individual, is a considered resident of both Contracting States, the competent authorities of both States will determine its residence for treaty purposes through mutual agreement. If no agreement is reached, the person will not be considered a resident of either State for the purpose of claiming any benefits provided by the treaty.
A service PE will be deemed constituted when an enterprise from one Contracting State furnishes services in the other State through one or more individuals present in that other State for the same or connected project for an aggregate period of 183 days or more in any 12 month period.
Both countries apply the credit method for the elimination of double taxation.
The tax treaty will enter into force once the ratification instruments are exchanged, and will generally apply from 1 January of the year following its entry into force. However, Article 26 Assistance in Collection will not apply until written confirmation is provided that Bulgaria is able to provide such assistance.
Once in force and effective, the treaty will replace the 1988 income and capital tax treaty between the two countries, which currently applies.
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