All you need to know about Bulgaria Company Tax

There are many reasons that have put Bulgaria on the radar of companies looking to reduce costs and maximize profits.

Not only Bulgaria has a stable financial system supported by government policies that have created an attractive business environment in the country, but Bulgaria also has a well-educated, multilingual, and cheaper workforce, not forgetting to mention their famous flat rate tax on corporate income, including double taxation treaties with over 70 countries.

But, that is not all.

Bulgaria is a member state of the European Union, allowing companies access to the European Market. 

For all these reasons, in this article we will concentrate on the Bulgaria Company Tax, one of the most attractive reasons for companies to relocate to Bulgaria or open a branch in this country.

How much is Bulgaria Company Tax?

Also known as corporate tax, or income tax for corporations, Bulgaria company tax is a percentage of all the income a company has made minus deductions of business expenses. 

Before getting into details about numbers, there is a difference worth mentioning regarding the origin of a company in Bulgaria and how said companies are taxed. 

Bulgarian local companies are taxed on their income generated within Bulgaria but also abroad. On the contrary, non-resident companies are only taxed on the income they have generated within the territory of Bulgaria.

Replying to the question “How much is Bulgaria Company tax”, it is 10% flat rate.

This percentage is applied to the profit a company has generated, meaning the result of the corporate income generated in a certain period, minus all the deductions for business expenses. Out of this total, a 10% tax is paid to the Bulgaria government. 

An interesting aspect that has added to Bulgaria’s appealing financial system, is the fact that their tax system is rather simple, when compared with neighboring countries, without complicated schemes, tax rules, or loopholes. 

Read also: Bulgaria Withholding Tax explained.

Filing Bulgaria Company Tax and payments

Bulgaria Company tax is paid once a year. All the company’s income is detailed, as well as the deductions of all professional expenses.

The tax period for the assessment of the corporation tax equals the calendar year.

The companies must submit an annual tax return form following the given standards. This form must be submitted between the first of March and 30th June of the following year directly to the National Revenue Agency.

Opposite to other countries, the Bulgarian tax system only requires prepayments if the company income is above the BGN 300,000 mark.

Also, for a newly registered Ltd company in Bulgaria, no prepayments are necessary for the year of incorporation and for the following year. 

There are certain speculations for quarterly and monthly payments for companies falling in certain income levels. 

We can only recommend new companies and those thinking about registering a new company in Bulgaria, to engage the accounting services of a reputable Tax advisor in Bulgaria. 

We have only praise for Accountancy Bulgaria, an accounting company whose reputation is built from excellence and years of experience, a strong inclination for client success, and the necessary flexibility to tailor to your financial needs. 

If you are looking for a service that will help with bookkeeping, tax reports, financial advisory, and even help you open a company in Bulgaria, Accountancy Bulgaria is your best ally on the path to success. 

Read more about Bulgaria US tax Treaty: the details.

Conclusion

Bulgaria Company Tax is 10% flat rate on all corporate income after deductions.

This tax rate is under the average compared to corporate income tax in other European countries.

Bulgaria Company Tax is paid yearly, with the tax year being equal to the calendar year, between March and June of the following year. This is valid for companies making a total taxable income of under BGN 300,000. 

The best way for established companies or those looking into company formation in Bulgaria, is to engage the services of a reputable accountancy firm that will take care of the company’s accounting needs.

Bulgaria has an advantageous business environment, policies that are attractive to foreign companies to settle in Bulgaria, as well as a well-educated workforce that is also cheaper, with an overall lower cost of living, while part of the European Union. Among other things, these are valuable aspects that have placed Bulgaria as a tax haven in Europe.