Taxes for a new company — complete guide for 2026
A newly registered company in Bulgaria enters the regime of corporate tax; when profits are distributed to owners — dividend tax; when thresholds are reached or by choice — VAT; as well as periodic obligations such as advance payments and, for cross-border transactions — withholding tax. In 2026 the key rates for a broad range of small and medium-sized companies remain predictable; what matters is knowing what is paid when and when it makes sense to consult an accountant.
Corporate Tax
The trading company's profit is subject to corporate tax at a rate of 10% (the general regime for most companies without a special licence or relief). This is the tax on the accounting profit after applying the Accountancy Act and tax legislation.
Dividend Tax
When you distribute profits to an individual owner, a dividend tax at a rate of 5% is typically withheld. It is separate from corporate tax and applies to distributions to shareholders/partners.
Effective Combined Burden (Guideline)
If we assume profits are first taxed at 10% corporate tax and the remainder is then distributed as a dividend at 5%, the combined effect for the owner is in the order of about 14.5% on the original profit (10% + 90% × 5% ≈ 14.5%). This is a simplified model; actual amounts depend on expenses, accounting treatment and statutory exceptions.
VAT (Mandatory and Voluntary Registration)
When Registration Becomes Mandatory
Upon reaching a turnover of 51 130 € over the previous twelve months (the threshold under the VAT Act based on the current regulatory framework) you become mandatorily registered for VAT, unless you fall within an explicit exception. Above the threshold you must issue invoices with VAT, file returns and maintain records as required.
Voluntary Registration
Below the threshold you can register voluntarily if you mainly work with companies that want to deduct input VAT, or if exports and the structure of your transactions require it. You can start preparing documents for VAT registration at VAT registration — new application.
For more on the regime and deadlines — Company Taxes in Bulgaria.
Advance Payments (Corporate Tax)
When the statutory conditions are met, companies make advance payments toward corporate tax during the year — based on profits or specific methods for new or small companies. The exact rules depend on turnover, history and the company's category; the accountant determines the amounts and deadlines under the Corporate Income Tax Act and the guidance of the revenue authority.
Withholding Tax
When making payments to foreign counterparts or for certain domestic payments, the law may require withholding tax (e.g. on certain dividends, interest, royalties, etc., under the applicable provisions and double tax treaties). This less commonly affects a purely domestic start-up but becomes important with the first cross-border transactions.
Social Security Contributions for a Self-Insured Manager
A manager of an EOOD/OOD without a primary employment contract elsewhere often insures themselves as a self-insured person — with health and pension contributions on a chosen or minimum insurable income under the applicable regime. This is not a "tax on profits" but it is a significant recurring expense in the founder's budget.
Monthly, Quarterly and Annual Obligations (Summary)
| Type | Examples |
|---|---|
| Monthly | Social security contributions for employees and/or a self-insured manager; VAT for VAT-registered entities |
| Quarterly / periodic | Advance corporate tax payments when conditions are met; VAT returns for registered entities |
| Annual | Annual financial statements, Corporate Income Tax Act return, closing of the financial year |
Local Taxes and Fees (Brief)
Municipalities levy property tax where property is owned, patent tax or vehicle tax for vehicles registered for accounting purposes and other local payments depending on the business address. For purely online services with no property the main focus usually stays on corporate tax, VAT and social contributions, but if you rent an office check the local regulations of the municipality.
Tips for New Companies
- Include the manager's social contributions in the first business plan — they often exceed the expectations of people coming from salaried employment.
- Track the VAT threshold month by month if you are growing fast — delayed registration carries risks.
- Use the NRA's electronic services for deadlines and return templates.
- For the first year an accountant almost always pays for itself through saved fines and missed reliefs.
For a detailed guide see Company Taxes in Bulgaria. Ready to register the company and organise your reporting from day one — start registration with Firmify. When planning your VAT steps you can also prepare via VAT — new application.
Summary: A new company faces 10% corporate tax, 5% dividend tax on profit distribution, effectively about 14.5% combined in a simplified model, plus VAT after the threshold or by choice, advance payments under statutory conditions, withholding on certain payments and social contributions for the manager. Regular reporting is just as important as the choice of legal form.
With Firmify the first step — registration in the Commercial Register — is done with clear documents and without wasting time on manual errors; after that the accountant takes over the tax calendar for your new company.