Corporate tax rate in Bulgaria is 10 percent – lowest in EU, from January 1st, 2007

The Bulgarian Parliament accepted changes in the Tax Law, which will make the corporate tax rate only 10 % from January 1st, 2007, when Bulgaria joins the European Union.

This makes Bulgaria with Cyprus have the lowest corporate tax rate in the EU.

The finance ministry (headed by anothre friend of mine – Plamen Oresharski, with whom we were candidates for mayors of Sofia in 2003; what a small world!) said that the low rate will make companies come out from the hidden, gray market.

That decision makes the government of socialist leader Sergey Stanishev the most liberal in finances in the last 10 years. More information about it at the International Herald Tribune and The Raw Story.

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5 Responses to Corporate tax rate in Bulgaria is 10 percent – lowest in EU, from January 1st, 2007

  1. Jaanus says:

    are you sure it’s the lowest? in Estonia, it’s 0% (only dividends are taxed, not corporate income as such).

  2. This is what the AFP reported. I guess in Estonia they may have 0 %, if the profit is invested – there are other countries like that, too.

    I found an interesting piece on Estonia here: http://www.free-europe.org/blog/?itemid=246

  3. Alexander says:

    Saying that the estonian tax rate is 0% is cheating as there is a *corporate* tax on dividends which makes the effective tax rate about 20%. There are academic papers written on the estonian system.

    The nice thing about estonia is that since there is no corporate tax, there are no depreciation rules which makes accounting very easy! It is simply a super-simple system that makes doing business very easy.

  4. Ignac says:

    Can one find somewhere the information on how the lowering of CIT influenced budgetary income from this tax?

  5. Inga says:

    There is a corporate income tax in Estonia and the rate is 20%. The only difference from other systems is that the tax
    liability is deferred till the distribution of profits which makes the system easy and transparent.

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