At the end of each year, every business faces the same question: how much tax it owes on its profits. The answer seems simple (10%), but the way the taxable amount is arrived at confuses many owners.
In this manual, an accounting firm Rodi Consult (Varna) explains how corporate tax is actually calculated, what the deadlines and advance payments are - updated for 2026.
In short: The corporate tax in Bulgaria is a flat 10% on taxable profit. Taxable profit is obtained from accounting profit, converted with unrecognized income and expenses. It is declared and paid from March 1 to June 30, and larger companies also make advance payments.
What is corporate tax?
Corporate tax ("profit tax") is the main tax on business activities (CIT). The rate is fixed — 10% on the profit for the calendar year. In the event of a loss, no tax is due.
Accounting profit and tax profit - the difference
- Accounting profit — revenue minus expenses in the financial statements.
- Tax profit — the tax base specified in the declaration.
Tax profit is obtained by accounting profit converts with unrecognized income and expenses. The principle: unrecognized expense increases the profit, and unrecognized income reduces it.
Taxable profit = Accounting profit + unrecognized expenses − unrecognized income
Typical unrecognized expenses: undocumented, unrelated to the activity, missing/marriage. Classic unrecognized income: dividends received.
How it works in practice - examples
Example 1 (unrecognized expense): income €15,000, expenses €12,000 → accounting profit €3,000. If €1,000 of the expenses are not related to the activity, the taxable profit is €4,000, and the tax is 400 € (instead of €300).
Example 2 (unrecognized income): income €25,000, expenses €12,000 → accounting profit €13,000. If €7,000 are dividends (tax-free), the taxable profit drops to €6,000, and the tax is 600 € (instead of €1,300).
Declaration and importation
It is declared with annual tax return from March 1 to June 30; it is also submitted within the same deadline. Until June 30, the declaration can be submitted multiple times, and then a one-time correction until September 30. Late payment carries interest (unrecognized expense).
Advance payments
Larger companies make advance payments based on net income for the year before the previous one (for 2026 - 2024):
- Quarterly — for income from 153,388 to 1,533,876 euros;
- Monthly — over 1,533,876 euros;
- Under 153,388 euros — optional.
Contributions are based on estimated profit. If the actual tax significantly exceeds the advances paid, the NRA charges interest on the excess — that is why the estimate is important and can be adjusted.
Tax loss carryforward
In the event of a loss, no tax is due, and the loss is deducted from future profits. up to 5 years forward. The right is exercised in the first year at a profit. Related reading: annual financial report.
FAQ
How much is the corporate tax in Bulgaria?
Corporate tax in Bulgaria is flat — 10% on the taxable profit of the company. The rate is the same for all companies. When a loss is realized during the year, corporate tax is not due.
What is the difference between accounting and tax profit?
Accounting profit is the difference between income and expenses in the financial statements. Taxable profit is obtained by converting accounting profit with income and expenses not recognized for tax purposes. Only taxable profit is used to calculate the corporate tax due.
When is corporate tax due and paid?
The annual tax return is filed from March 1 to June 30. The tax due is also paid within the same period. After June 30, the law allows a one-time correction of the return until September 30. In case of late payment, interest is due for late payment.
When does the company make advance payments for corporate tax?
The obligation depends on the net sales revenue for the year before the previous one. Quarterly installments are due for revenue from 153,388 to 1,533,876 euros, and monthly installments are due for revenue above 1,533,876 euros. Below 153,388 euros, advance installments are made only on an optional basis.
Can I carry forward a tax loss to subsequent years?
Yes. The tax loss is deducted from future taxable profits consecutively over the next 5 years. The right is exercised in the first year with a positive result — if you miss it then, you lose the right to carry forward this loss.
The conclusion
The rate is simple — 10% — but the complexity lies in determining taxable profit and advance payments. Mistakes lead to higher tax and interest.
Is the deadline for the annual declaration approaching? Explore Rodi Consult accounting services or is contact us. Phone: +359 893 474 576.
This article is for informational purposes only and does not constitute accounting or tax advice. Please consult an accountant for your specific situation.
