Parliament’s Committee on Budget and Finance has voted 13-8, with one abstention, to approve at first reading amendments to the Corporate Income Tax Act introducing a one-off 33% tax on excess profits earned by companies in certain economic sectors. The one-off tax will apply to banks, insurance companies, food retailers with net sales revenue of at least EUR 5 million in 2026, telecommunications companies, currency exchange offices and payday lending companies.
These sectors account for about 60% of the excess profit accumulated in Bulgaria, Deputy Finance Minister Lyudmila Petkova said as she presented the bill. The draft texts do not change the corporate income tax regime and the measure does not affect the taxation of standard profit. Petkova said the temporary mechanism aims to redistribute extraordinary profits accumulated during a period of economic uncertainty by companies in certain sectors. The legislative changes provide for 30% of the tax to be reassigned for specific purposes such as investments or building reserves. The budget effect is expected to reach EUR 800 million after the 30% reassignment, Petkova said. The one-off tax would apply for the 2027 financial year.
Continue the Change (CC) leader Assen Vassilev said CC would not support the proposed bill. He said the mechanism for determining the threshold for excessive profit is flawed and that such a tax could deter investors. Vassilev also asked why the energy sector is not included in the scope of the tax.
Petkova said the energy sector is not included because the proposed reference period for determining excessive profit, 2020-2025, includes periods when energy companies were already subject to a temporary solidarity contribution on excess profit.
Martin Dimitrov of Democratic Bulgaria said that the texts in the bill amount not to a profit tax but rather to a turnover tax on specific companies.
Vladislav Goranov of GERB-UDF said that the powerholders are proposing such measures because they cannot rein in budget spending and are relying on an “emergency one-off act” to convince the European Commission that they are making efforts to reduce the budget deficit.
Tsoncho Ganev of Vazrazhdane noted that corporate tax in Bulgaria is low and that taxing excess profit would benefit the budget, which is why his party would support the proposal. He criticized the EUR 5 million threshold for food retailers, saying it puts small businesses on the same footing as large foreign chains. He said Vazrazhdane would propose doubling the threshold between the bill’s first and second readings. Petkova responded that the threshold could be raised at that stage.
Atidzhe Alieva-Veli said that the MRF would not support the bill because it is a panicked one-off measure, and she also criticized the fact that the energy sector is not included in the scope of taxation.
Stanislav Popdonchev, Vice President and Chief Financial Officer of the Bulgarian Chamber of Commerce and Industry, opposed the proposal, Boyan Mitrakiev of the Confederation of Employers and Industrialists in Bulgaria called for raising the threshold for food retailers to EUR 25 million to protect smaller businesses, and Nina Kolchakova, Director General of the Association of Bulgarian Insurers, suggested introducing tax relief for employers who insure their employees.
Committee on Budget and Finance Chair Konstantin Prodanov of Progressive Bulgaria cited reports by the International Monetary Fund and the Organisation for Economic Co-operation and Development, which say taxing excess profits is a legitimate economic measure. He said other EU Member States have also introduced similar measures, including Spain, Italy, Czechia, Lithuania, Hungary, Slovakia and Latvia.
The approved changes to the Corporate Income Tax Act also provide for raising the maximum monthly value of food vouchers that employers can provide to employees from EUR 102.26 to EUR 200. The amount above EUR 102.26 would be taxed at 7%. The maximum annual quota for food vouchers is raised to EUR 1.5 billion from January 1, 2027. Vassilev and Ganev criticized the proposed taxation.
The bill also introduces accelerated tax depreciation for artificial intelligence technologies, high-performance computer equipment and server infrastructure. Companies would be able to apply double the annual tax depreciation rate for these assets, but not more than 100%.

Parliamentary Budget Committee Approves One-Off Tax on Excess Profits of Banks, Telecoms, Retailers at First Reading THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-11-10 03:20:45

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