Corporate Income Tax in Bulgaria — Rates, Filing & Payment (2026)

10 % flat corporate tax

Bulgaria applies a flat rate of 10 % corporate tax on profits, regulated by the Corporate Income Tax Act (CITA). This rate is the lowest in the European Union, significantly below average levels:

The 10 % rate has been in effect since 2007, and no legislative changes for its increase have been adopted to date.

Tax base

Corporate tax is calculated on the taxable profit, which is defined as the accounting financial result adjusted for tax purposes under the CITA.

Key adjustments

• Permanent tax differences — expenses not recognized for tax purposes (entertainment expenses, fines, hidden profit distributions, expenses without documentary justification).
• Temporary tax differences — differences between accounting and tax depreciation, provisions, impairments. These differences reverse in future periods.
• Tax depreciation — the CITA sets minimum and maximum tax depreciation rates, different from accounting rates (e.g., 25 % for computers, 4 % for buildings).
• Transfer pricing — transactions between related parties must comply with the arm's length principle.

Withholding tax

Bulgaria applies withholding tax on certain income paid by Bulgarian companies to foreign persons:

Filing and payment

Annual tax return

• Filing deadline: from 1 March to 30 June of the year following the tax year.
• Payment deadline: by 30 June — the tax is paid simultaneously with the filing of the return.
• Format: mandatory electronic filing (with a qualified electronic signature) for all legal entities.
• Currency: from 2026 — in euro.

Advance payments

Depending on net sales revenue for the previous year, companies owe monthly or quarterly advance payments:

Monthly payments are due by the 15th of the current month. Quarterly payments — by the 15th of the month following the quarter (excluding the fourth quarter). Newly incorporated companies are exempt from advance payments for their first year.

Pillar Two / Global Minimum Tax

Bulgaria has transposed Directive (EU) 2022/2523 on ensuring a global minimum level of taxation. The rules have been in effect since 1 January 2024.

Who is affected?

• Multinational groups and large domestic groups with consolidated revenue exceeding EUR 750,000,000 in at least 2 of the last 4 years.
• Does NOT affect small and medium Bulgarian companies that are not part of such groups.

How does it work?

• The effective tax rate for each jurisdiction must be at least 15 %.
• Bulgaria applies the QDMTT (Qualified Domestic Minimum Top-up Tax) mechanism — a supplementary domestic tax collected by the Bulgarian tax administration.
• If the effective rate of a Bulgarian subsidiary of a large multinational group is below 15 %, the difference is paid through the QDMTT.

Tax incentives

The CITA provides several tax incentives that can further reduce the effective tax burden:

• Special purpose investment companies (SPICs / REITs) — subject to 0 % corporate tax when meeting profit distribution requirements.
• Tax relief for high-unemployment municipalities — companies carrying out manufacturing activities in municipalities with unemployment exceeding the national average by more than 25 % may retain up to 100 % of corporate tax (subject to reinvestment and employment conditions).
• Tax loss carry-forward — losses can be carried forward for up to 5 years and offset against future profits. Carry-back is not permitted.
• Tax treatment of donations — donations up to a certain percentage of accounting profit (5–15 %, depending on the recipient) are recognized for tax purposes.

Impact of the euro

With the adoption of the euro on 1 January 2026, the following changes occur in corporate taxation:

• Returns in euro — the annual tax return for 2026 (filed by 30 June 2027) will be in euro.
• Advance payments — calculated and paid in euro.
• Advance payment thresholds — converted from BGN at the fixed rate (1 EUR = 1.95583 BGN).
• Accounting — companies maintain their accounting in euro. Values from previous years are converted at the fixed rate.

Absence of a 2026 budget

As of March 2026, Bulgaria does not have an adopted budget for 2026. The extended 2025 budget is in effect under the Public Finance Act. The reason is the upcoming snap parliamentary elections on 19 April 2026.

This means the following for businesses:

• Tax rates have not changed — corporate tax remains 10 %, dividend tax — 5 %.
• No new tax measures — no new tax obligations or reliefs have been adopted.
• Spending constraints — government spending is limited to 2025 levels, which may affect certain subsidies and programs.

A new government is expected to propose a 2026 budget after forming a parliamentary majority, at the earliest by mid-year.

Frequently asked questions