Bulgaria’s National Assembly approved at first reading on Wednesday amendments to the Corporate Income Tax Act introducing a one-off 33% tax on excess profits earned by companies in certain economic sectors. The bill, submitted by the Council of Ministers on November 5, 2026, passed by 127 votes in favour, 75 against and none abstaining.
Parliament also rejected a proposal by Democratic Bulgaria (DB) to gradually introduce a zero tax rate on profits reinvested in machinery, production equipment and other equipment, as well as a proposal by the former caretaker government concerning tax relief for donations supporting the development of sport.
The government bill was supported by 127 MPs from Progressive Bulgaria (PB). Voting against were 19 MPs from GERB-UDF, 15 from the Movement for Rights and Freedoms (MRF), 18 from DB, 12 from Continue the Change (CC) and 11 from Vazrazhdane.
Under the proposed amendments, the one-off tax would 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. The measure would apply for the 2027 financial year and is expected to have a budget effect of EUR 800 million after the reassignment of 30% of the tax for specific purposes.
The bill also raises the value threshold for tangible and intangible fixed assets for tax purposes from BGN 700 to EUR 1,000.
The period during which tax losses may be carried forward would be doubled from five to ten years, subject to a limit of 70% of the positive taxable financial result.
The amendments also update the tax treatment of benefits in kind involving company-owned, leased or otherwise provided assets used for personal purposes. The aim is to ensure fairer and more consistent taxation of personal consumption provided through businesses.
The maximum monthly value of food vouchers that employers may provide to their employees would increase from EUR 102.26 to EUR 200, with the amount above EUR 102.26 subject to a 7% tax.
Accelerated tax depreciation would be introduced 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%.
The amendments would also allow 30% of the tax to be reassigned for specific purposes, including investments and building reserves.
Deputy Finance Minister Lyudmila Petkova said the Finance Ministry did not support the former caretaker government’s proposal, considering it insufficiently justified from the perspective of effective public finance management. She said it did not clearly distinguish the fiscal impact of the proposed measure or adequately contribute to achieving its stated public-interest objectives.
Petkova added that the Ministry also opposed DB’s proposal because it envisaged a permanent measure applicable to all taxpayers without specific conditions or requirements linked to clearly defined objectives.
During the debate, DB MP Vladislav Panev argued that the main problem with the budget was not tax revenue but expenditure. He said DB could not support the government bill because it would expose Bulgaria to a serious risk of recession.
DB MP Martin Dimitrov criticized what he described as the government’s tendency to impose taxes indiscriminately. He argued that the proposed measures would discourage companies from lowering prices by increasing their tax burden, while failing to create incentives for investment.
GERB-UDF MP Vladislav Goranov said the budget was becoming an instrument for financing government spending rather than stimulating economic growth.
He argued that the proposed measures would either hinder growth or fail to support it in the coming year. Goranov also warned that using one-off revenue to finance permanent expenditure was imprudent and suggested that the government should instead consider more ambitious measures to reduce spending.
CC MP Assen Vassilev said public investment was being reduced by EUR 4 billion, while the Finance Ministry expected the reduction to be partially offset by an additional EUR 3 billion in private investment.
He warned that, if the anticipated private investment failed to materialise, the economy could enter a recession accompanied by a sharp slowdown in economic activity.
Vassilev argued that introducing a tax on excess profits was a mistake because the damage to the economy would outweigh the benefit of the expected EUR 800 million in revenue. However, he added that, if such a tax were introduced, it should also cover the energy sector.
PB MP Konstantin Prodanov defended the tax on excess profits as a temporary measure aimed at stabilizing Bulgaria’s public finances in 2027 amid an excessive budget deficit.
He noted that similar taxes had been introduced in other EU countries without causing a decline in foreign investment or overall investment activity.
According to Prodanov, Bulgaria’s entry into the eurozone and the European Central Bank’s interest rate policy constituted the exceptional circumstances justifying the measure. He argued that the tax targeted economic rents exceeding normal profits rather than constituting an additional business expense.
MRF MP Ayten Sabri warned that the tax burden would ultimately be passed on to consumers through higher prices, further increasing inflation.
She said her parliamentary group would not support the bill, citing concerns about the tax on excess profits and the mechanism used to determine which sectors would fall within its scope.
Vazrazhdane MP Tsoncho Ganev said his party would oppose the amendments, describing them as another stage in the government’s policy of increasing taxes. During the dicussions and voting at committee level on Tuesday, Ganev said that his party would support the bill, because according to him taxing excess profit would benefit the state budget.
Vazrazhdane MP Dimo Drenchev questioned why the defence industry was not also being considered for a tax on excess profits, given the substantial profits he said it was making because of the war.

Parliament Approves One-Off 33% Tax on Excess Profits at First Reading THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-11-11 02:52:00

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