The package includes changes affecting businesses and employees, with new limits on the offsetting of tax losses and incentives for technological investment. The measures are still subject to parliamentary approval.
Bulgaria is preparing a revision of its tax rules for 2027. The proposals submitted by the Ministry of Finance concern the personal use of company assets, the carry-forward of tax losses, depreciation and employee food vouchers. The measures also include a temporary windfall tax on certain sectors.
For businesses, the optional regime for taxing benefits in kind related to the personal use of company assets or personnel would increase from 3% to 7%. The change would therefore also apply to company assets used for private purposes in cases falling within the scope of this regime.
The treatment of tax losses would also change: the carry-forward period would be extended from five to ten years, while the amount that could be offset each year would be limited to 70% of the positive taxable result. Where sufficient prior-year losses are available, the remaining 30% would therefore remain taxable. The 30% refers to the portion of taxable profit that cannot be offset, not to a new corporate income tax rate.
On the investment side, the statutory threshold for identifying tax-depreciable assets would increase from the previous BGN 700 to EUR 1,000, subject to comparison with any lower threshold established under the company’s accounting policy.
Accelerated depreciation is also proposed for artificial intelligence technologies, high-performance computing systems and servers. The applicable depreciation rates could be up to twice the ordinary rates, without exceeding 100%.
The most significant proposal for certain sectors is an extraordinary 33% tax on 2027 windfall profits. The tax would apply to the portion of taxable profit exceeding the average taxable profits recorded over the 2020–2025 period, increased by 20%. The year 2026 would be excluded from the reference period. The sectors concerned would include banks, insurance and reinsurance companies, telecommunications operators, currency exchange offices, quick-loan companies and retailers operating at least five food outlets.
The maximum monthly value of electronic employee food vouchers would increase to EUR 200, compared with the current approximately EUR 102, equivalent to the previous BGN 200. At the same time, a final 7% tax would be introduced and withheld from the amount granted to the employee. A EUR 200 voucher would therefore have a net value of EUR 186. The exemption from social security contributions would remain in place.
Finally, the package provides for an update to the financial penalties set out under tax legislation. The amounts and scope of any increases will need to be assessed on the basis of the individual provisions ultimately approved: it would not be accurate to present a general doubling of penalties as already final.
Source: Bulgarian Ministry of Finance