Bulgaria’s Corporate Tax Rate Cut

Bulgaria's corporate tax rate has been cut by five points to 10 per cent, effective from the beginning of this month. Bulgaria’s parliament unanimously voted for the cut in October 2006, and it is hoped that the change will have the effect of boosting the country’s business climate and tackling tax evasion.

Bulgaria's corporate tax rate was cut on 1st January 2007, when it joined the European Union. Bulgaria’s parliament decided on the move, which cut corporate tax by five points to 10 per cent, in October 2006 by a unanimous vote. It is hoped that this will give a boost to the country’s business climate, as the change will put Bulgaria’s corporate tax at one of the lowest levels throughout the EU.

Bulgaria’s Deputy Finance Minister Georgi Kadiev put to lawmakers that the new corporate tax rate would reduce budget proceeds in 2007 by an estimated 290 million Leva, or €148 million. However, he claimed the change would reduce tax evasion by tackling the grey economy, as companies would be less inclined to disguise their full income.

Kadiev added that as Bulgaria’s economy was progressing well, the estimated reduction in budget proceeds could be a lot lower than 290 million Leva in practice.

If you wish to see the original article from the International Herald Tribune click here