09 January 2024
Introduced 15% corporate income tax for large Bulgarian groups and Bulgarian members of foreign large corporate groups
On 1st of January 2024 became effective the amendment of the Bulgarian Corporate Income Tax Act that regulates the minimum effective taxation of 15% of multinational enterprise (MNE) groups and large-scale domestic groups. The amendment is in relation to the transposition in the national legislation of Council Directive (EU) 2022/2523 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union.
The minimum effective taxation shall apply for constituent entities located in Bulgaria that are members of an MNE group or of a large-scale domestic group which has an annual revenue of EUR 750,000,000 or more in its ultimate parent entity’s consolidated financial statements in at least two of the four fiscal years immediately preceding the current fiscal year. It is envisaged for such constituent entities to be assessed additional top-up tax when in the jurisdiction where they are based their profit is taxed with an effective tax rate lower than 15%.
The new legal provisions elaborate on the main rules and the secondary rules for taxation with top-up tax, the calculation of the effective tax rate, the taxable persons, the assessment of the tax base and conditions under which safe harbors are possible. Introduced are obligations and deadlines for information and tax reporting and payment of the due top-up tax, as well as penalties for non-compliance.