How does the 5% dividend tax actually work when I pay myself from my EOOD?

The mechanics are simple once you see the sequence — and your accountant's caution about interim transfers is protecting you from the one real trap. The sequence: your EOOD's profit is first taxed with 10 percent corporate tax, settled with the annual closing (annual return due by 30 June for the prior year). Once the annual accounts are adopted, you as sole owner sign a resolution to distribute some or all of the retained profit as a dividend. The company — not you — then withholds the 5 percent dividend tax and remits it to the NRA by the end of the month following the quarter of the resolution, along with a withholding declaration. What lands in your personal account is the net 95 percent, and for a Bulgarian-resident individual that is final — no further personal tax, and it does not even go on your annual return. Combined burden: 10 percent plus 5 percent of the remainder, 14.5 percent overall. You can also distribute from accumulated profits of earlier closed years at any point in the year — you do not have to wait for a specific season, only for profits to be formally established by adopted accounts. What Bulgarian practice frowns on is distributing current-year profit before closing. Now the trap: simply transferring company money to yourself between distributions creates a shareholder loan or, worse, a hidden profit distribution — the NRA can hit that with the dividend tax plus a punitive 20 percent sanction and deny deductions. If you need cash mid-year, do a proper documented distribution from prior-year profits or take a salary as manager. The freelancer-versus-company arithmetic, including when dividends beat salary, is laid out at /guides/bulgaria-freelancer-vs-company-eood.