The Finance Ministry is proposing a package of tax changes that would raise child tax relief, introduce a new allowance for spending on children’s healthcare, education and sports, increase the VAT registration threshold and impose new taxes on windfall profits and high-powered cars, Deputy Finance Minister Ludmila Petkova said on Wednesday.
Under the proposed amendments to the Income Taxes on Natural Persons Act, the annual tax relief for one child would increase from BGN 6,000 in 2026 to EUR 5,000, for two children from BGN 12,000 to EUR 8,000, and for three or more children from BGN 18,000 to EUR 11,000. The relief for a child with disabilities would rise from BGN 12,000 to EUR 10,000.
A new child development tax relief is also proposed for working parents’ spending on children’s healthcare, education and sports. Up to EUR 2,000 for one child, EUR 4,000 for two and EUR 6,000 for three or more children could be deducted from the annual tax base, Petkova said.
Among the proposed VAT changes is an increase in the mandatory registration threshold from EUR 51,130 to EUR 75,000, aimed particularly at supporting businesses with relatively low turnover. Mandatory VAT registration is also proposed for taxable transactions involving land and buildings as a measure against VAT evasion.
Mandatory electronic invoicing for domestic transactions is also planned. The legislative changes are yet to be adopted, and the measure would take effect in 2028, as the National Revenue Agency needs to build a platform to verify invoices issued by suppliers and confirmed by recipients.
Under proposed Corporate Income Tax Act changes, the annual quota for electronic food vouchers would rise from EUR 818 million in 2026 to EUR 1.5 billion. The maximum monthly amount per employee would increase from the current BGN 200, or about EUR 102, to EUR 200. Following a review of practices in other EU countries, the Ministry also proposes a 7% tax on the vouchers.
A windfall profit tax is proposed for 2027 for banks, insurance and reinsurance companies, retailers operating at least five food stores, telecommunications companies, currency exchange offices and payday lenders.
The reference level would be the average profit for 2020-2025, increased by 20% to reflect what the Ministry considers a normal profit margin. The difference between a company’s taxable profit for 2027 and that reference level would be taxed at 33%, Petkova said.
Amendments to the Excise Duties and Tax Warehouses Act would introduce an excise duty on cars with engine power above 250 kW. Specialized vehicles, ambulances, fire engines and vehicles with a special traffic regime would be exempt. The duty would be payable upon first registration or import into Bulgaria. For new cars, it would amount to EUR 10,000 plus EUR 10 for every kilowatt above 250 kW, and for used cars EUR 5,000 plus EUR 8 per kilowatt above the threshold.
Changes to gambling taxation would raise the quarterly alternative tax on slot machines, gaming tables and other equipment in land-based gambling halls and casinos. For 2027, the tax on a slot machine would rise from BGN 800 to EUR 600, on a gaming table from BGN 22,000 to EUR 13,000, and on other gaming equipment from BGN 5,000 to EUR 3,000.
Contributions for socially responsible gambling programmes aimed at preventing gambling addiction would double. The expected EUR 15 million in proceeds would be split equally among the Youth and Sports Ministry, Health Ministry and Education and Science Ministry.
A new state fee is also proposed for the manufacture, import and distribution of gaming equipment: EUR 50,000 for a five-year licence and EUR 100,000 for a ten-year licence.
Under the Local Taxes and Fees Act, taxable property values used to calculate property and other local taxes would be updated, but the new valuations would not apply to household waste fees. The values are proposed to increase in stages over three years: by 30% in 2027, 35% in 2028 and 35% in 2029, with the aim of doubling them over the period, Petkova said.
The revenue-raising measures are expected to generate EUR 1.4 billion. After accounting for the proposed tax reliefs, the net fiscal effect is estimated at EUR 1.123 billion, Petkova said.
Finance Ministry Proposes Higher Child Tax Relief, New Taxes on Windfall Profits, Powerful Cars THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-09-23 16:24:35
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