Corporate Tax in Bulgaria

Corporate Tax in Bulgaria

Quick answer: Bulgaria has a flat 10% corporate income tax — one of the lowest in the EU. Combined with a 5% dividend tax, the effective rate for distributed profits is approximately 14.5%. There is no progressive taxation for companies.

Corporate Income Tax

All companies registered in Bulgaria pay a flat 10% corporate income tax on their profits. This applies to:

• EOOD (Single-Member LLC)
• OOD (Multi-Member LLC)
• Branches of foreign companies

The tax is calculated on the annual profit after deducting all legitimate business expenses. There is no minimum tax — if you have no profit, you pay no tax.

Dividend Tax

When profits are distributed to individual shareholders as dividends, an additional 5% withholding tax applies. This brings the total effective tax rate to:

• Corporate tax: 10% of 100 EUR profit = 10 EUR
• After-tax profit: 90 EUR
• Dividend tax: 5% of 90 EUR = 4.50 EUR
• Total tax: 14.50 EUR (14.5%)

Dividends paid to EU corporate shareholders are generally exempt from withholding tax under the EU Parent-Subsidiary Directive.

Social Contributions

If you're a manager and self-insured person, you pay social contributions on a chosen insurance income:

• Minimum: €477/month (933 BGN equivalent, fixed rate)
• Maximum: €1,918/month (3,750 BGN equivalent, fixed rate)

Monthly contributions at minimum insurance income are approximately 180–230 EUR, covering pension and health insurance.