The draft 2026 State Budget introduces stricter VAT software rules, a faster tax depreciation for electric cars, and an increase in withholding tax on dividends.
Bulgaria’s Ministry of Finance has released the draft State Budget Act for 2026 and updated the medium-term budget forecast for 2026-2028, which were published on the Ministry’s website on 3 November 2025.
Draft State Budget Act for 2026
One key measure included in the draft state budget is amendments to the VAT Law that impose stricter requirements on businesses. Any person utilising sales management software in a commercial establishment is obliged to use only software that is officially included in a specific government-approved list. Non-compliance may lead to penalties.
Medium-term budget forecast for 2026-2028
A key policy change proposed is the introduction of a more favourable depreciation regime for tax purposes for electric cars. The measure proposes an annual tax depreciation rate of no more than 50% for electric vehicles.
The updated medium-term budget for 2026-2028 also includes a proposal to increase the tax rate for the withholding tax on income from dividends and liquidation shares from 5% to 10%. The tax increase is planned to take effect from 1 January 2026.
