Bulgaria’s parliament is considering amendments to the Corporate Income Tax Act that would introduce accelerated depreciation for electric vehicles, enhanced deductions for qualifying R&D expenditure, and a tax exemption for certain rental income of religious organisations, with all measures proposed to apply retroactively from 1 January 2026.
Bulgaria’s National Assembly is reviewing a draft law amending and supplementing the Corporate Income Tax Act, submitted on 13 January 2026. The proposal introduces tax measures aimed at promoting electric mobility and research and development (R&D) activities.
Under the draft law, businesses acquiring electric vehicles (EVs) on or after 1 January 2026 would be eligible for accelerated depreciation at an annual rate of 50%. The measure aligns with the National Recovery and Sustainability Plan and EU Council targets, aiming to avoid potential EU financial sanctions.
The draft also provides enhanced tax treatment for R&D. Taxpayers conducting qualifying R&D activities can claim an additional 25% deduction of eligible expenses in the year incurred, provided the costs are not funded by public aid. Where R&D results in a long-term intangible asset, the development costs included in the asset’s historical cost may be increased by 25%. Outsourced R&D may also qualify if conducted at market prices.
Additionally, the law proposes a tax exemption for rental income earned by religious organisations, recognising their primarily social and charitable functions.
If approved, all measures would take effect retroactively from 1 January 2026.
Earlier, the Council of Ministers approved the draft under Decision № 14 of 2026 and submitted it to the National Assembly for consideration.
