In short: a dividend is the part of a company's profit that it decides to pay out to its owners (shareholders or partners), usually as an amount per share.
Simply put: The company first pays corporate tax on its profit. Then the owners decide whether to distribute part of what is left as a dividend or keep it in the company for growth. A dividend is not compulsory: the company can cut it or stop paying it. In most countries dividends received by individuals are taxed.
Example: You hold 100 shares and the company pays €0.50 per share. You receive €50 before tax. With a final tax of 5% (see the Bulgaria box), €47.50 remains.
Watch out: a high dividend today is not a promise of a dividend tomorrow, nor proof that the share price will not fall.
Example: Bulgaria — dividends paid to individuals are subject to a final tax of 5% (Personal Income Tax Act, Art. 46(3)), and company profit to a corporate tax of 10% (Corporate Income Tax Act, Art. 20). Rates change — check with the National Revenue Agency (NRA) at the date of payment.
Check in your country — the tax rate on dividends for individuals and whether it is withheld at source; your national tax authority publishes it.
Source: Bulgaria: Personal Income Tax Act, Art. 46(3); Corporate Income Tax Act, Art. 20 (as amended up to State Gazette No 85 of 2026); NRA — https://nra.bg