Bulgaria’s Cabinet has greenlighted a draft agreement on the avoidance of double taxation with Germany. Once endorsed, the agreement is set to further encourage direct investments into Bulgaria and in the opposition direction and to guarantee that capital investments from Germany in Bulgaria and vice versa will be tax exempt. At present, Germany is the sixth largest investor in Bulgaria. Since 1996 to date, Germany has invested 1.037 billion euro, half of which have been Greenfield investments. Last year alone, the volume of German investments reached 138.6 million euro.

The new agreement will substitute a 1987 agreement (when Bulgaria was under communist rule and the deal was with West Germany), which no longer corresponds to current realities now that Bulgaria has become a member of the EU.