Bulgaria

Bulgarian tax residents are taxed on their worldwide income. Non-residents are taxed on their income from Bulgarian sources only, through a permanent establishment (PE) and/or via withholding tax (WHT), depending on the case (see the Branch income section).

In general, corporate income is subject to CIT at a flat rate of 10%.

Global minimum tax

The EU global minimum tax Directive was transposed into the Bulgarian Corporate Income Tax Act (on 12 December 2023 Bulgaria’s National Assembly passed amendments to the Corporate Income Tax Act, allowing the country to transpose the EU minimum tax Directive into national law). The amendment to the CIT Act was promulgated in the State Gazette, in force as of 1 January 2024.

In addition, amendments in the law were introduced in the Bulgarian Pillar Two legislation in March 2025.

Bulgaria has introduced a full list of Pillar Two collection mechanisms, including a Qualified Domestic Minimum Top-up Tax.

The collection mechanisms entered into force according to the following timetable:

• Income Inclusion Rule (IIR) from 1 January 2024.
• Undertaxed Profits Rule (UTPR) from 1 January 2025.
• Qualified Domestic Minimum Top-up Tax (QDMTT) from 1 January 2024.

For more detailed information and the most recent updates, please visit PwC’s Pillar Two Country Tracker.

Qualified Domestic Minimum Top-up Tax Return

Each Bulgarian constituent entity (as well as other specific types of entities subject to QDMTT, such as JVs) of an in-scope multinational enterprise (MNE) group is required to submit a separate QDMTT Return. The first submission deadline is the last day of the 18^th month (later on by the last day of the 15^th month) after the end of the GloBE tax year. Constituent entities that are part of an MNE group preparing consolidated financial statements on a calendar year basis, must submit their first QDMTT Return for the 2024 tax year by 30 June 2026.

GloBE Information Return

The GloBE Information Return (GIR) submission obligation impacts MNE Groups subject to Pillar Two rules. In principle, each constituent entity within an MNE Group is obligated to file a GIR with the tax authority of its respective jurisdiction (local filing). This local filing requirement does not apply if the GIR is centrally filed with a competent authority (e.g., in Bulgaria this would be the National Revenue Agency) by the ultimate parent entity or a designated entity of the Group and subsequently transmitted via information exchange to partner jurisdictions where the MNE Group has constituent entities (central filing). Bulgaria accepts GIR filings submitted via another country if the GIR has been filed by an eligible ultimate parent entity (UPE) / designated constituent entity and there is an eligible GIR information exchange in place with the relevant GIR filing jurisdiction.

The first submission deadline, similarly to the QDMTT Return is the last day of the 18th month (later on by the last day of the 15th month) after the end of the GloBE tax year. Accordingly, concerning constituent entities part of an MNE group preparing consolidated financial statements on a calendar year basis, the first GIR for the 2024 tax year must be submitted by 30 June 2026.

GIR Notification

Even if the GIR is filed centrally, each local entity is required to inform the Bulgarian National Revenue Agency which entity filed the GIR and where it has been filed. This information is part of the QDMTT return form filed in Bulgaria. Accordingly, Bulgarian constituent entities of MNE groups preparing consolidated financial statements on a calendar year basis, must submit the first GIR Notification information for the 2024 tax year by 30 June 2026 with their first QDMTT return.

Penalties

Failure to file IIR / UTPR return, GIR or QDMTT return in Bulgaria could result in fines between ca. EUR 50k - EUR 100k. In case of repeated violation - fines between ca. EUR 100k - EUR 150k.

Different fines apply in case of omission of circumstances or filings with incorrect data (IIR / UTPR, GIR, QDMTT) leading to under-reporting of top-up tax / QDMTT or to unduly reducing or exempting from tax.

Failure to file GIR notification - fine of ca. EUR 5k and in case of repeated violation - EUR 7.5k.

With respect to GIR - according to the law, penalties for failure to file shall not apply for tax periods commencing on or prior to 31 December 2026 and ending on or prior to 30 June 2028 - to the extent the company can prove that reasonable effort has been made for filing the GIR for the respective tax period.

Alternative tax

Income earned by organisers of gambling games for which the bet is included in the price of a phone or other telecommunication service is subject to 15% alternative tax, applied on the increase in the price of the phone or other telecommunication service (i.e. the difference between the regular price of the service and the new higher price due to the gambling game). A fixed-sum tax is applied to the operation of gaming machines.

Online gambling games are exempt from the alternative tax (and are subject to standard CIT instead), as are a significant part of the other land-based gambling games (i.e. totto; lotto sports betting, including horse and dog racing; and betting on random events or related to the knowledge of facts).

Tonnage tax regime

A special alternative tax regime applies to the operation of commercial maritime vessels, as per their net tonnage, at a rate of 10%.

Local income taxes

There are no provincial or local government corporate income taxes in Bulgaria.