Corporate taxation in Bulgaria consists of corporate income tax, value-added tax, and import duties. The corporate income tax rate is a flat rate of 10%, and the standard VAT rate is 20%. The rates of import duty vary depending on the type of goods being imported and are subject to the EU's common external tariff. There are no export duties in Bulgaria. It is important for businesses operating in Bulgaria to stay informed about changes to tax legislation to ensure compliance and minimize their tax liability.
Corporate Income Tax:
All Bulgarian companies are subject to corporate income tax (CIT) on their profits. The current CIT rate is a flat rate of 10% on taxable profits. This rate was introduced on 1 January 2021 and is applicable to all taxpayers, regardless of their legal form or business activity. Prior to this, the rate was 18%. The CITA also provides for various deductions and exemptions, which can reduce the tax burden for businesses.
Value-Added Tax:
Value-added tax (VAT) is a consumption tax that is levied on the sale of goods and services in Bulgaria. The standard VAT rate is 20% and applies to most goods and services. A reduced VAT rate of 9% applies to certain goods and services, such as books, newspapers, and some food products. Certain goods and services are exempt from VAT, such as healthcare and financial services.
Sales Tax:
There is no separate sales tax in Bulgaria. Sales tax is covered by the VAT system.
Import Duties:
Import duties are taxes that are levied on imported goods. The rates of import duty in Bulgaria vary depending on the type of goods being imported. Bulgaria is a member of the European Union, and as such, is subject to the EU's common external tariff (CET). The CET applies to goods imported into the EU from non-EU countries, and rates vary depending on the type of goods. For example, the CET for agricultural products ranges from 0% to 17%. For industrial goods, the rates range from 0% to 20%.
Export Duties:
There are no export duties in Bulgaria.
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