Dr. Svetlin Krastanov

1. The lowest personal income tax rate in the EU

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Bulgaria has the lowest personal income tax rate (10%) in the European Union. The 10% rate is flat, i.e. it is applied regardless of the amount of income.

 

2. Stability of the personal income tax rate

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The 10% personal income tax rate was introduced in 2008 and has not been changed since then, i.e. already for 10 years. In addition, there are no plans to change the current regime.

 

3. One of the lowest corporate income tax rates in the EU

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Bulgaria has the second lowest corporate income tax rate (10%) in the European Union.

 

4. Stability of the corporate income tax rate

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The 10% corporate income tax rate was set in 2008 and has not been changed since then. Currently, no changes are envisaged regarding the corporate income tax rate.

 

5. Simplicity of the VAT rates

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Bulgaria has a standard 20% VAT rate and one 9% VAT reduced rate which is applied only to hotel accommodation services. In comparison, many other EU member states have complex systems of one or two reduced rates applied to different supplies which could lead to various challenges.

 

6. Stability of the VAT rates

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The standard 20% VAT rate has been set in 1999 and for 19 years it has not been changed.

 

7. Limited application of excise duties

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Bulgaria applies only the mandatory excise duties for the EU, i.e. on tobacco, alcohol and energy products. In comparison, there are countries in EU that apply also numerous national excise duties on various products.

 

8. Some of the lowest excise duty rates in the EU

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Bulgaria has some of the lowest excise duty rates in the European Union. For some excisable products the rate is 0% - for example, wine, sparkling wine, electricity used for household purposes.

 

9. Availability of various tax incentives

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The Bulgarian tax legislation provides various tax incentives both in the areas of direct and indirect taxation.

 

10. Double Tax Treaty network

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Bulgaria has concluded Double Tax Treaties will 69 countries, including with all other 27 EU Member States.

 

11. One of the lowest tax-to-GDP ratio in the European Union

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According to Eurostat, in 2016 Bulgaria had a tax-to-GDP ratio of 29% which is one of the lowest in the European Union.

 

12. Fiscal stability

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Bulgaria has one of the lowest government debt-to-GDP ratio in the EU. According to Eurostat, the government debt to GDP ratio of Bulgaria at the end of the third quarter of 2017 was 25,6% which is several times lower than the average number for the EU (82,5%).