Dividend Tax

Dividends received by local companies from other local companies are not subject to withholding tax.

Dividends payable by local companies to individuals and certain types of charity institutions, defined by CITA, are taxed with 5% withholding tax.

Dividends distributed by a local company to a foreign EU member-country company is not subject to withholding tax under the conditions that:

• According to the tax legislation of the respective EU member-country the company is considered as local of this country for tax purposes and by force of an agreement for avoiding the double tax levying with a third state is not considered as local person of a state out of the EU
• The company is levied with corporate tax, without having right of choice or exemption from levying with this tax
• The company is the actual possessor of the income and holds at least 15% of the shares/stocks of the local entity
• By the moment of calculating of the dividends the company has owned the shares of item 3 continuously for a period not less than two year.