Dividends

Notification of the terms and conditions for payment of a 6-month gross dividend for the first half of 2020

Sofia, Bulgaria, September 25, 2020 – In accordance with the requirements of art. 115c, para. 4 of LPOS “Sopharma” AD notifies all shareholders of the Company about the decision of the Extraordinary General Meeting of shareholders of “Sopharma” AD that took place on September 25, 2020 from 11:00 a.m. (UTC 8:00 a.m.) regarding the amount and type of dividend distributed and the terms and conditions for its distribution:

The General Meeting of shareholders approves the proposal by the Board of Directors for the distribution of 6-month gross dividend at the amount of 0.04 BGN /four stotinki / per share.

The persons eligible for dividend are those present in the register of the “Central Depository” AD 14 days after the day of the General Meeting on which the 6-Month Financial Report for the first half of 2020 was approved and the decision for dividend was taken, namely October 9, 2020 (record date) – ex dividend date October 8, 2020.

The dividend payment will start on November 23, 2020 (Monday). In accordance with the Regulations of the “Central Depository” AD, the dividend shall be paid out as follows: for shareholders with client accounts at an investment intermediary – through the investment intermediary, for shareholders without accounts at an investment intermediary - through the branches of “Eurobank EFG – Bulgaria” AD /Postbank/ in the country.

Notification of the terms and conditions for payment of an annual gross dividend for 2019

In accordance with the Regulations of the Central Depository, the dividend shall be paid out as follows: for shareholders with client accounts at an investment intermediary – through the investment intermediary, for shareholders without accounts at an investment intermediary - through the branches of Postbank in the country until October 30, 2020 (after that date, shareholders who have not received their dividend in the appropriate order may do that at the cash desk of the Company in Sofia, 16 Iliensko Shose Str. every business day between 10:00 a.m. - 12:00 p.m. and 14:00 p.m. - 16:00 p.m., tel. 02/ 8134 283). 

Notification of the terms and conditions for payment of a 6-month gross dividend for the first half of 2019

16 January 2020

Sofia, Bulgaria, January 16, 2020,  Sopharma AD notifies that the Company will initiate gross dividend payment of the voted on the EGM held on December 13, 2019 dividend of 0.05 BGN per share on January 22, 2020. The persons eligible for dividend are those present in the register of the Central Depository 14 days after the date of the AGM, i.e. December 27, 2019.

In accordance with the Regulations of the Central Depository, the dividend shall be paid out as follows: for shareholders with client accounts at an investment intermediary – through the investment intermediary, for shareholders without accounts at an investment intermediary - through the branches of  Postbank in the countryuntil April 30, 2020 (after that date, shareholders who have not received their dividend in the appropriate order may do that at the cash desk of the Company in Sofia, 16 Iliensko Shose Str. every business day between 10:00-12:00 and 14:00-16:00, tel. 02 8134 283).

Historical information on dividends paid by the public companies of Sopharma Group

 2019 201820172016201520142013201220112010
Sopharma AD 0.12 0.05 0.11 0.10 0.07 no dividend 0.07 0.07 0.07 0.085
Sopharma Trading AD 0.30 0.30 0.30 0.30 0.30 0.27 0.23 0.2 0.17 0.15
Momina krepost AD no dividend no dividend no dividend no dividend no dividend no dividend no dividend no dividend no dividend no dividend
Sopharma buildings REIT no dividend no dividend no dividend no dividend no dividend no dividend no dividend 0.0172 0.23268 0.009

Information on tax treatment for dividends

This statement is a general guideline and is only informative for some key aspects of the tax treatment of income from financial instruments and in particular income in the form of dividends distributed by “Sopharma” AD (the Company), and should therefore not be considers it legal or tax advice to any shareholder, nor investment advice. The Company recommends that shareholders and potential investors consult with tax advisors (including investment advisers at their discretion) on the overall tax implications and treatment by the Bulgarian authorities of the acquisition, ownership and disposal of shares. 

Shareholders of the Company and potential investors interested in the shares of the Company - securities traded on a regulated market (Bulgarian Stock Exchange - Sofia AD; Warsaw Stock Exchange) should keep in mind that the tax legislation of the country whose they are a local person and the state of incorporation of the Company (Republic of Bulgaria) may influence the income received from the securities.

 In the Republic of Bulgaria the income from securities is subject to taxation under conditions and in amount depending on the grounds for realization of the income (capital gain, dividend, liquidation share) and the characteristics of the recipient of the income (natural or legal person, local or foreign person).

 The information presented below is in accordance with the regulations in force as of September 2020 and the Company is not responsible for subsequent changes in the regulations of the taxation of income from shares.

 “Sopharma” AD is a local legal entity of the Republic of Bulgaria for tax purposes (Article 3, paragraph 1 of CITA). The income from dividends and liquidation shares from participation in local legal entities are from a source in the Republic of Bulgaria (Art. 8, para. 4 of the Personal Income Tax Act; Art. 12, para. 4 of CITA).

 LOCAL LEGAL ENTITIES are legal entities and non-personalized companies established under Bulgarian law, as well as European joint stock companies established under Regulation (EC) № 2157/2001 and European cooperatives established under Regulation (EC) № 1435/2003, whose registered office is in Bulgaria and which are entered in a Bulgarian register.

 LOCAL INDIVIDUALS are natural persons, regardless of citizenship, with a permanent address in Bulgaria or who reside in Bulgaria for more than 183 days in each 12-month period. Also local are the persons whose center of vital interests (which is determined by the family, the property, the place of employment, professional or economic activity or the place from which the person manages his property) is located in Bulgaria, as well as persons sent to abroad from the Bulgarian state, its bodies and / or organizations, Bulgarian enterprises and their family members.

 FOREIGN PERSONS (legal and natural) are persons who do not meet the above two definitions.

 DIVIDENT

Final tax is levied on taxable income from:

1. dividends for the benefit of a sole trader;

2. dividends for the benefit of:

a) local or foreign natural person from a source in Bulgaria;

b) a local individual from a source abroad;

c) foreign legal entities, except for the cases when the dividends are realized by a foreign legal entity through a place of business in the country;

d) local legal entities that are not traders, including municipalities.

There are exceptions to the tax rule in cases where dividends are distributed to the benefit of the:

1. a local legal entity that participates in the capital of a company as a representative of the state;

2. contract fund;

3. a foreign legal entity that is a resident for tax purposes of a Member State of the European Union or of another state party to the Agreement on the European Economic Area, except in cases of hidden distribution of profits.

 Dividend income distributed by the Company is subject to withholding tax in the amount of five percent (5%) on the gross amount of dividends (Article 194, paragraph 1 in conjunction with Article 200, paragraph 1 of the Corporate Income Act). taxation and Article 38, paragraph 1 in conjunction with Article 46, paragraph 3 of the Personal Income Tax Act i), as:

1. Dividend income distributed by the Company for the benefit of local legal entities.

Income as a result of distribution of dividends by local legal entities, such as the Company, is not recognized for tax purposes according to Art. 27, para. 1, item 1 of CITA, for the purposes of corporate taxation. Therefore, dividend income distributed for the benefit of local legal entities is exempt from corporate tax. According to Art. 194, para. 1 of the CITA, dividends distributed (personalized) by local legal entities, such as the Company, for the benefit of local legal entities that are not traders, including municipalities, are taxed at source. The tax rate is 5% and is calculated on the gross amount of dividends, with the tax withheld by the payer of income. Dividends distributed for the benefit of local legal entities participating in the capital of the Company as a representative of the state, as far as is admissible, as well as for the benefit of mutual funds are not subject to taxation at source.

2. Dividend income distributed by the Company for the benefit of foreign legal entities.

Income as a result of distribution of dividends by local legal entities, such as the Company, is not recognized for tax purposes according to Art. 27, para. 1, item 1 of CITA, for the purposes of taxation with corporate tax on the profit of foreign legal entities, realized through a place of business in the country. Therefore, income from dividends distributed for the benefit of foreign legal entities, when operating through a place of business in the country, is exempt from corporate tax.

According to Art. 194, para. 1 of CITA, dividends distributed (personalized) by local legal entities, such as the Company, for the benefit of foreign legal entities are taxed at source, except for the cases when the dividends are distributed for the benefit of a mutual fund, a foreign legal entity that is a resident for tax purposes of a Member State of the European Union or of another state party to the Agreement on the European Economic Area, except in cases of hidden distribution of profits, or if the dividend income is realized by a foreign legal entity through a place of economic activity in the country. The tax rate is 5% and is calculated on the gross amount of dividends, with the tax withheld by the payer of income.

 According to Art. 201, para. 1 of CITA, there is a commitment for declaring the dividends (accrued for the benefit of foreign legal entities), as well as for declaring the tax withheld on them, only the Company - which distributed the dividends.

 3. Dividend income distributed by the Company for the benefit of local individuals.

According to Art. 38, para. 1 of the Personal Income Tax Act, income from dividends from shareholding in local legal entities, such as the Company, distributed for the benefit of local individuals is taxed with final tax. The tax rate is 5% and is accrued on the gross amount of the dividend determined by the decision for its distribution (on the gross amount of the amounts representing hidden distribution of profit, in case of dividend in the form of hidden distribution of profit), the tax being deducted from the payer of the income.

The natural persons - sole traders, on the grounds of art. 38, para 1 of the Personal Income Tax Act are subject to taxation at the source for their dividend income, distributed by the Company, according to CITA, with a tax of 5%, accrued on the gross amount of dividends, the tax being deducted by the payer of the income.

Dividends accrued by local legal entities for the benefit of local individuals are not subject to declaration in the annual declaration under Art. 50 of the Personal Income Tax Act (Art. 52, para. 1, item 4 of the Personal Income Tax Act).

In accordance with Art. 73 of the Personal Income Tax Act, only the Bulgarian Company - which distributed the dividends - has a commitment to declare the dividends (accrued for the benefit of local or foreign individuals), as well as to declare the tax withheld on them.

4. Dividend income distributed by the Company for the benefit of foreign individuals

According to Art. 38, para. 1 of the Personal Income Tax Act, income from dividends from shareholding in local legal entities, such as the Company, distributed for the benefit of foreign individuals is taxed with final tax. The tax rate is 5% and is accrued on the gross amount of the dividend determined by the decision for its distribution (on the gross amount of the amounts representing hidden distribution of profit, in case of dividend in the form of hidden distribution of profit), the tax being deducted from the payer of the income.

 USE OF TAX REDUCTIONS

The foreign owner of shares may be subject to exemption, refund or credit of all or part of the Bulgarian tax, if between Bulgaria and the country for which he is a resident, an agreement on avoidance of double taxation (DTT) is in force. The procedure for applying the tax reliefs for foreign persons provided for in the entered into force DTTs is regulated in Chapter Sixteen, Section III of the Tax and Social Insurance Procedure Code (TSPC). When the total amount of the realized income exceeds BGN 500,000, the foreign person should certify to the Bulgarian revenue authorities the existence of grounds for application of the DTT. The foreign shareholder has the right to use the respective tax relief by submitting a request for a sample, accompanied by evidence certifying: a) that he is a resident of the country with which Bulgaria has concluded the respective DTT (by submitting a certificate issued by the tax authorities of the country concerned, or otherwise, in accordance with the usual practice of the foreign tax administration); b) that he is the holder of the dividend from the shares (by submitting a declaration); c) that it does not have a place of business or a certain base on the territory of the Republic of Bulgaria, with which the dividend income is actually related (by submitting a declaration); and (d) that all applicable requirements of the relevant DTT have been met (by presenting an official document or other written evidence). Separately, additional documentation certifying the type, amount and grounds for receiving dividends should be submitted to the Bulgarian revenue authorities, such as the decision of the General Meeting of Shareholders on the distribution of dividends and a document certifying the number of shares held (eg depository receipt). The request for application of DTT, accompanied by the necessary documents, must be submitted to the Bulgarian Tax Administration (Bulgarian Revenue Authorities) for each foreign holder immediately after the adoption of the decision by the General Meeting of Shareholders of the Company approving the distribution of dividends. If the Bulgarian tax administration refuses exemption from taxation, the Company is obliged to withhold the full amount of 5% of the tax due for the paid dividends. A shareholder whose request for exemption from taxation has been refused may appeal the decision. In case the total amount of dividends or any other income paid by the issuer does not exceed BGN 500,000 for one year, the foreign holder is not obliged to submit a request for application of DTT to the Bulgarian tax administration. In the latter case, however, he must certify to the Company the existence of the above circumstances and submit (within the period specified by the Company) the documents described above, certifying the existence of the grounds for application of the DTT by the Company.

The above information has been prepared only as an added value for the shareholders and potential investors of “Sopharma” AD.

For information on withholding tax exemptions, you can contact Maria Dacheva, tel. +3592/8134160, email: MDacheva@sopharma.bg  

IR