Bulgaria's Ministry of Finance opened a consultation on 23 September 2026 on draft amendments to the Corporate Income Tax Act covering euro conversion, tax loss carryforward, a temporary excess profits tax and Pillar Two safe harbours.
Bulgaria’s Ministry of Finance opened a public consultation on 23 September 2026 on a draft law on Amendments and Supplements to the Corporate Income Tax Act (ZID ZKPO), proposing changes covering the conversion of tax thresholds and penalties into euros, an extension of the tax loss carryforward period, a temporary excess profits tax and Pillar Two safe harbours.
The draft would convert financial thresholds, statutory caps and administrative penalties under the Act from Bulgarian Leva (BGN) to Euros (EUR). Limits under Articles 50 and 51 would, for example, be revised from BGN 700 to EUR 1,000, while other administrative fines would be converted into specified Euro amounts.
The proposed amendments would extend the period for carrying forward tax losses from five years to 10 years. Annual tax loss deductions would be capped at 70% of the positive tax financial result before deduction. Where the remaining tax loss is lower than 70% of the profit, the full remaining loss could be deducted.
Temporary excess profits tax
The draft would introduce a temporary tax on excess profits generated in 2027 for banks and credit institutions, insurers and reinsurers, electronic communication service providers, currency exchange operators and food retailers operating at least five retail locations as of 1 January 2027.
The tax base would be calculated as the difference between the 2027 tax profit and the average tax profit for the six-year baseline period from 2020 to 2025, increased by 20%. The proposed tax rate is 33%, and the tax would not be deductible for corporate income tax purposes.
Affected entities would have to declare and pay monthly advance contributions during 2027. Final declarations and payments would be due between 1 March 2028 and 30 June 2028. Entities incorporated during 2027 would be exempt.
Accelerated depreciation
The draft would allow an enhanced tax depreciation rate for factory-new, unused assets acquired and commissioned for Artificial Intelligence (AI) technologies, high-performance computing or server infrastructure.
Taxpayers could apply an annual tax depreciation rate of up to twice the standard rate, subject to a maximum of 100%. The measure would apply to qualifying assets acquired and put into operation on or after 1 January 2027 and would cover the 2027, 2028 and 2029 tax years.
Taxpayers would be required to document the technical specifications and intended use of the assets.
Pillar Two safe harbours
The proposed legislation would introduce permanent and transitional simplified calculation regimes under Chapters 34m and 34n for multinational enterprise (MNE) groups subject to Pillar Two.
Under the proposed safe harbours, top-up tax for a jurisdiction could be treated as zero where an MNE group meets specified tests, including the De Minimis test, the Routine Profits test or an Effective Tax Rate (ETR) test.
The De Minimis test would apply where average revenue is below EUR 10 million and average profit is below EUR 1 million. The ETR test would require an Effective Tax Rate of at least 15%.
The draft also sets out rules concerning deferred tax assets (DTAs), currency hedging, cross-border allocation of profits and adjustments following mergers or acquisitions.
Corporate restructuring and food vouchers
The amendments would establish filing and payment rules for corporate reorganisations. Where a restructuring takes place before the deadline for filing the previous year’s annual tax return, legal successors or newly established entities would be required to file the returns and remit the tax due by 30 June of the transformation year.
The draft would also increase the tax rate under Article 216(2) from 3% to 7%. Amendments to the Personal Income Tax Act would classify social expenses for electronic food vouchers under Article 209a as subject to a 7% final tax on the gross amount, with employers required to withhold and remit the tax monthly.
Most provisions are proposed to enter into force on 1 January 2027. Key international minimum tax provisions and safe harbour rules under Chapters 34m and 34n are proposed to apply from 1 January 2026.
The consultation is being managed by the Tax Policy Directorate. Opinions must indicate whether contributors are acting on their own behalf or defending the interest of another person or group of persons, in accordance with Art. 8, para. 3 and Art. 10, para. 2 of the Act on Transparency in Representation of Interests.
The consultation will close on 23 October 2026.
