BULGARIA, EUROPE'S LOWEST TAX RATE
Bulgaria joined the European Union in 2007 and since its accession the corporate tax rate is 10%, the lowest in the entire European Union! However, this has not always been the case. Indeed, the corporate tax rate in 2000 amounted to 32.5% and suffered a very sharp decline to be today at 10%.
All companies subject to tax in Bulgaria will be subject to the 10% tax rate applicable on earnings made over the tax year.
This 10% tax on the benefice is the only levy made by the Bulgarian state on the company since Bulgarian taxation does not affect companies with any other tax (professional tax, communal tax, wealth tax, apprenticeship tax, supplementary contribution, etc.).
COMPARISON WITH OTHER EU COUNTRIES AND SOME NEIGHBOURING COUNTRIES
The corporate tax rate can vary from simple to triple within the European Union and ranges from 10% for Bulgaria to 33.99% for Belgium.
In illustration, the following table summarizes the corporate tax rate in some European Union countries and neighbouring countries of the EU where the corporate tax rate is much higher than corporate tax rate of Bulgaria.
|Country||Normal tax rate %||Possible deductions|
|Luxembourg||22||Exemption from intellectual property income (brands, brevets, drawings...)|
|France||33.33||Reduced to 15% for profits below € 38.120|
Bulgaria is therefore unquestionably the European champion in tax matters.
THE POSSIBILITY OF ADDITIONAL TAX RELIEF IN BULGARIA
The law provides for relief of up to 100% tax exemption if the profit was made by a production company located in a region where the unemployment rate exceeds the average national unemployment rate by 35% (the average national unemployment rate in Bulgaria was 5.3% in February 2018).
The same way, agricultural producers benefit from a tax deduction of up to 60%.