On 26 October 2007, Bulgaria and Estonia initialled a first-time income tax treaty. It is expected that the treaty will be signed next year. Estonia is the only EU Member State with which Bulgaria does not have a tax treaty. The initialled version provides for: -   exemption method for the avoidance of double taxation, except in cases of passive income, where the credit method would be applied; and -   5% tax at source on passive income, with exemptions for certain types of dividends and interest.