Tax Rate for Corporations in Bulgaria: the complete Guide

bulgaria corporate tax rate

Table of Contents

Bulgaria has become a tax haven in recent years. This is due to the advantageous tax rate for corporations, an optimistic business environment, and an array of benefits meant to appeal foreign investors. 

Bulgaria is without a doubt an emerging destination for businesses looking to have a European base. 

This is mainly because of the low flat corporate tax rate of 10%, considered one of the lowest in Europe, not to mention a skilled and cheaper work force and many opportunities for foreign businesses.

The basic of Bulgarian taxes for corporations

The Bulgaria tax scheme for corporations is one of the main reasons companies, small businesses and even freelancers gravitate towards opening a company in Bulgaria. Either starting from scratch, registering a new company in Bulgaria (a process rather simple and quick) or even opting for buying an already-made company, there are many options for foreign investors looking to maximise their profits thanks to the tax rate for corporates in Bulgaria.

We will talk about all different aspects of the taxes regulation in Bulgaria and how you or your company can benefit from it.

Something worth mentioning is the fact that while the tax system in Bulgaria is simple and straightforward, with no loopholes or strange rules, you or your new company will need a reliable accounting service in Bulgaria that can take care of the company’s yearly reports and day to day bookkeeping tasks and responsibilities.

Accountancy Bulgaria is a trustworthy agency that can take care of all of your company’s accounting requirements, from consultancy to yearly reports, audits, and even company registration in Bulgaria. With a lead that counts with more than 35 years of experience in the financial world, Accountancy Bulgaria allows you to focus on your business while they take care of the rest.

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Taxes for different types of corporations in Bulgaria

When registering a new company in Bulgaria, there are certain aspects that will determine the kind of corporation that this activity will have. 

We will discuss the most common types of corporations in Bulgaria.

  • EOOD or OOD: Limited Liability Company, these types of corporations do not hold the shareholders liable for any financial responsibilities. These kinds of companies had a very small initial capital, and in the case of an EOOD, only one shareholder is required. 
  • A Bulgarian Joint Stock Company, or AD, is a company type more suited to big businesses. The initial capital at incorporation is a lot higher.
  • Freelancers in Bulgaria. Also known as a single entrepreneur company, in this case the owner is liable for the company debt (his assets are not considered separated from the company assets) as well as allowed to enjoy its profits.

How do taxes for corporations work in Bulgaria?

The 10% flat rate for corporate income is simple and straightforward. Every year, companies must present a yearly report where income is detailed as well as deductible costs. Out of the net amount, 10% is due in taxes. 

The company’s accounting agency will take care of presenting the appropriate reports.

Benefits of the tax scheme in Bulgaria for Corporations

There are many benefits for businesses establishing in Bulgaria and we have mentioned some already.

A beautiful country, interesting culture and history… we could mention all those, but truly, what has placed Bulgaria in the mind of many around the world looking to settle in this country, is their tax scheme. A flat rate of 10% on all corporate and personal income tax makes Bulgaria a lot more attractive than other European countries, where corporate taxes are usually over 25% reaching almost 35% in some. 

Choosing to invest in Bulgaria, it’s a step in the right direction to save a lot of money and maximise the profits of your company.

Additionally, to the 10% tax, we can mention a few other benefits Bulgaria offers corporations:

  • Investment opportunities: 

The lower tax system attracts investors, and this brings money into Bulgaria and creates even more financial opportunities.

  •  Low cost of living: 

This is another interesting fact that many consider, as life can be up to 50% cheaper than in other countries, like the US.

  • Cheaper well-educated workforce.

This is an important aspect to consider for companies that are looking into settling in Bulgaria. Here, the work force is often multilingual, experienced, and more affordable.

  • More profit:

Companies will find themselves with more profit to allocate to other areas of their business that may guarantee their success and growth.

  • Bulgaria belongs to the European Union.

Bulgaria is in the European Union. Registering a company in Bulgaria will give you access to over 500 million consumers across the EU. For non-European businesses, this is the best entryway to start expanding in Europe. 

  • Simple bureaucracy:

Finally, Bulgaria has made it clear they welcome foreign businesses and has simplified the bureaucracy related to opening a company in Bulgaria, registering for VAT taxes, how to do reports, audits, etc. This is a breath of fresh air for companies looking to establish in Bulgaria. 

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