Corporate Tax in Bulgaria
What is taxed
- Bulgarian companies are taxed on their worldwide income; foreign companies only on income from Bulgaria, through a branch or by withholding tax.
- The base is the accounting profit adjusted for tax. Each company files on its own; there is no group consolidation.
- Capital gains are part of taxable profit, except gains on shares traded on regulated markets in the EU or EEA, which are exempt.
- Dividends from Bulgarian, EU and EEA companies are excluded from taxable profit.
- Foreign tax is credited under a treaty or, without one, by a unilateral credit.
Source: Deloitte: International Tax, Bulgaria Highlights 2026; PwC Worldwide Tax Summaries: Bulgaria, corporate income determination1,4
Withholding tax on payments abroad
| Payment | Domestic rate | Notes |
|---|---|---|
| Dividends | 5% | 0% to companies in the EU and EEA |
| Interest | 10% | 0% to EU associated companies under the directive |
| Royalties | 10% | 0% to EU associated companies under the directive |
| Technical services | 10% | Consulting, installation, market research |
| Hidden profit distribution | 5% plus a 20% penalty | — |
Source: Deloitte: International Tax, Bulgaria Highlights 2026; PwC Worldwide Tax Summaries: Bulgaria, corporate withholding taxes1,5
Tax treaties often cut these rates; for example, to 5% on royalties for the United Kingdom and United States. The EU directive exemption needs a holding of at least 25% for two years.5
Filing and payment
| Tax year | Calendar year |
|---|---|
| Annual return and final payment | 1 March to 30 June of the following year |
| Monthly advance payments | If prior-but-one year revenue exceeded €1,533,875.64 |
| Quarterly advance payments | If that revenue was between €153,387.56 and €1,533,875.64 |
| No advance payments | New companies and those below €153,387.56 |
| Limitation period | 5 years, at most 10 |
Source: PwC Worldwide Tax Summaries: Bulgaria, corporate tax administration3
Special rules
- Pillar Two: income inclusion rule and a domestic top-up tax since 2024, under-taxed profits rule since 2025. The first returns for 2024 were due by 30 June 2026.
- Transfer pricing: new rules from 1 January 2026 follow the 2022 OECD guidelines. Smaller companies are exempt from a local file.
- Controlled foreign companies: low-taxed foreign subsidiaries without real activity are taxed in Bulgaria.
- Alternative taxes: shipping companies can pay a 10% tonnage tax; some gambling activities pay a special tax instead of corporate tax.
- Incentives: manufacturers in high-unemployment municipalities can keep up to 100% of their tax if they reinvest it.
Source: PwC Worldwide Tax Summaries: Bulgaria, corporate taxes on income; Deloitte: International Tax, Bulgaria Highlights 2026; Ministry of Finance: Corporation tax and tax reliefs2,1,6
Frequently Asked Questions
What is the corporate tax rate in Bulgaria?
Bulgaria’s corporate income tax rate is 10% of accounting profit adjusted for tax. Groups with revenue of €750 million or more are subject to a minimum 15% rate under EU rules.
Does Bulgaria tax companies on worldwide income?
Bulgarian companies are taxed on their worldwide income, while foreign companies are taxed only on income from Bulgaria through a branch or withholding tax. The taxable base is accounting profit adjusted for tax, and each company files separately without group consolidation.
How long can companies carry tax losses forward in Bulgaria?
Companies in Bulgaria can carry tax losses forward for five years but cannot carry them back.
When are Bulgarian corporate tax returns and payments due?
Bulgarian companies must file their annual corporate tax return and pay the final tax by 30 June of the following year; the filing period runs from 1 March to 30 June. Monthly advance payments apply if revenue in the prior-but-one year exceeded €1,533,875.64, while quarterly payments apply if it was between €153,387.56 and €1,533,875.64.
What withholding tax rates apply to payments abroad from Bulgaria?
Bulgaria’s domestic withholding tax rates are 5% on dividends and 10% on interest, royalties and technical services; hidden profit distributions are subject to 5% withholding tax plus a 20% penalty. Dividends paid to EU and EEA companies are exempt, and EU associated companies can qualify for 0% rates on interest and royalties under the directive. The directive exemption requires a holding of at least 25% for two years.
Sources
- Deloitte: International Tax, Bulgaria Highlights 2026 (PDF)
- PwC Worldwide Tax Summaries: Bulgaria, corporate taxes on income
- PwC Worldwide Tax Summaries: Bulgaria, corporate tax administration
- PwC Worldwide Tax Summaries: Bulgaria, corporate income determination
- PwC Worldwide Tax Summaries: Bulgaria, corporate withholding taxes
- Ministry of Finance: Corporation tax and tax reliefs
Figures checked 13 October 2026. Prepared by InvestBulgaria for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.
