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Annual Profit of a Bulgarian Company (Profits Tax)


The annual profit is defined as the positive tax financial result /tax profit/. It means that the annual profit is the positive quantity after subtracting company’s expenses from its incomes for the year (accounting financial result), which accounting financial result is further adjusted in accordance with the procedure established by the Corporate Income Tax Act.

The taxable period for determining the corporate tax is the calendar year. Until 31st of March of the next year, the companies shall submit a tax declaration and shall pay the full amount due of the corporate tax.

Also the companies/taxable persons are obliged to make every month or every three months advanced payments of corporate tax based on the estimated taxable profit for the current year, which payments are deducted from the final payment.

Advanced payment is not made by:

  • taxable companies whose net income from sales for the previous year does not exceed 300 000 Bulgarian levs
  • newly established taxable companies for the year of their establishment, except for those that are newly established as a result of transformation

The rate of the corporate tax levied on a company’s annual profit is 10 percent.

Tax reliefs

The taxable persons may reduce their financial accounting result for the taxable year using deductions as specified in the Corporate Income Tax. For example hiring unemployed or disabled people is a valid deduction.

Deductions - expenses: Accounting expenses which are acknowledged for tax purposes include: expenses for donation, made under special conditions of the law; travelling expenses connected with the company's activity; representative expenses; social expenses given in kind; vouchers for food - all of these may be used as deductions when computing the accounting financial result.

Deductions - depreciations and provisions: Depreciation allowances are also allowable deductions.

Generally the expenses on provisions for debts are not acknowledged for tax purposes in the year of their accounting; they are acknowledged in the year of the repayment of the debt.