Bulgaria is widely considered one of the most tax-efficient EU jurisdictions for IT operations.
The standard tax framework includes:
Corporate taxation:
- 10% flat corporate income tax (CIT) on taxable profit
Dividend taxation:
- 5% withholding tax on distributed dividends
This creates one of the lowest combined corporate-tax burdens in the EU.
Payroll taxation (key structure):
Employment income is subject to:
- 10% personal income tax (flat rate)
- Social security contributions (approx. 32–33% total, split between employer and employee in an 60:40 ratio, subject to caps and thresholds, including a maximum insurable income ceiling (as of July 2026 in the amount of EUR 2111.64), which helps with predictability of labour costs)
R&D incentives:
Recent framework update allowed for:
- +25% additional tax deduction on qualifying R&D operating expenses
- Increased tax depreciation base for qualifying R&D-related capital expenditure
Compared to jurisdictions with special regimes, Bulgaria provides:
- Predictability over conditional tax regimes
- Strong suitability for long-term operational scaling within the EU
