Management & permanent establishment
Actual central management and fixed business facilities can create German tax exposure; a foreign registered address is not sufficient.
Sections 10 / 12 AO ↗
Residence & Relocation
Bulgaria · Residence & EOOD
Personal residence and a local company in one plan, with activity, contributions and actual management in view.
Where it fits
The location must fit the plan.
For entrepreneurs with a genuine Bulgarian home or business connection. An EOOD may fit a distinct operating business.
Scope
From context to execution.
- Review of ownership, activity, residence and countries involved.
- Agreed responsibilities, document checklist and open specialist questions.
- Coordination of company or residence documents, banking preparation and local professionals within the agreed scope.
- Document handover and a schedule of ongoing obligations.
The general personal income-tax rate is 10% on the applicable base; exceptions and contributions remain separate. As of 09/2026.
Corporate tax is generally 10%, with 5% on covered dividends, subject to recipient status and exceptions. As of 09/2026.
Bulgaria adopted the euro at the start of 2026. As of 09/2026.
Requirements & Substance
What needs to be clear first.
Actual residence and work matter more than registration alone. Governance, accounts and contracts must reflect the business.
Timing
A sequence with clear dependencies.
Document review, specialist clearance, filing and account or status decisions follow separate processes. Once the documentation and scope are clear, we agree a schedule. Authority and bank decisions cannot be guaranteed.
Ongoing Duties & Cost Drivers
The structure must work day to day.
Social and health contributions, accounting, VAT and registry duties create ongoing obligations. Personal and company payments remain separate.
German connections
From a German perspective.
Review actual tax burden and any preferential treatment under section 2 AStG. Corporate CFC rules may also apply; an EU address does not replace genuine economic activity.
Controlled foreign companies
Control, income type and actual taxation matter. The low-tax threshold is below 15% (as of 09/2026); EU/EEA substance rules require evidence.
Sections 7–13 AStG ↗Foreign-interest reporting
Foreign businesses and shareholdings may trigger notification duties. Conditions, thresholds and deadlines need review.
Section 138(2) AO ↗Exit taxation
Departure or restrictions on German taxing rights can trigger taxation of unrealised gains on covered interests, subject to personal conditions.
Section 6 AStG ↗Remaining German interests
German nationals meeting all relevant conditions may face extended limited taxation for up to 10 years after the departure year (as of 09/2026). Preferential taxation alone is insufficient.
Section 2 AStG ↗Tax treaties
Residence, income, entitlement and the current treaty text determine relief. The existence of a treaty is not a blanket exemption.
Treaty status ↗This overview does not replace case-specific review by directly appointed, qualified legal and tax professionals.
Read on
Guides and terms for this country.
Formation21 September 202617 min
Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question
The right country is not the cheapest one but the one that fits your business, customers and residence. For location-independent entrepreneurs that is usually the US LLC: affordable, online, and without US income tax where there is no US business activity. The article shows who it suits permanently, and when Cyprus, Bulgaria, Estonia or Poland are the better choice.
Read the articleResidence21 September 202616 min
Exit tax: how to plan your move with a GmbH shareholding
Exit tax slows down entrepreneurs who want to move, but it can be planned well and in many cases avoided altogether. This article explains who it concerns, how the value is determined, how to pay in seven interest-free instalments or be released entirely under the return rule, works through a move to Cyprus and sets out the sequence in six steps.
Read the articleResidence21 September 202616 min
Moving your residence properly: how to end your tax liability in Germany
Deregistration is just a form; the clean tax break comes from facts you create yourself. This article shows how to move your home and your presence, how visits to Germany remain possible, why life as a perpetual traveller is a recognised model too, and how Cyprus’s 60-day rule helps frequent travellers.
Read the article
Terms in the glossary
- CFC taxation (Hinzurechnungsbesteuerung)
- Low taxation (Niedrigbesteuerung)
- Substance test (Substanznachweis)
- Extended limited tax liability (erweiterte beschränkte Steuerpflicht)
- Tax residence (steuerliche Ansässigkeit)
- 183-day rule
- Habitual abode (gewöhnlicher Aufenthalt)
- Deregistration of residence (Abmeldung)
Questions & Answers
Worth knowing.
Is an EOOD required for residence?
No. These are separate decisions.
Is the tax rate the total burden?
No. Contributions, tax base and income classification matter.
Can management stay in Germany?
That can create German tax exposure.
Does the euro change tax residence?
No. Actual circumstances and legal conditions remain decisive.
Does section 2 AStG always apply?
No. Nationality, prior residence, tax burden and German interests must be assessed together.