Corporate income tax in Bulgaria: you won't find lower

The lowest rate is in Bulgaria, just 10%. It is no accident that Bulgaria, along with Cyprus, where corporate income tax is 12.5%, has recently become a favourite country for investment among Russian-speaking businesspeople.

What does the ranking of tax rates tell us?

Any business is created and run for the sake of profit. The results of the corporate income tax ranking clearly demonstrate the level of tax pressure the state places on profits in different countries. Of course, such data do not relate to the overall indicators of comprehensive taxation, and they do not say that the state is trying to stimulate business. And yet this indicator allows certain conclusions to be drawn.

States have the maximum corporate income tax rate in two cases. The first category is economically developed countries, where the social burden placed on business is correspondingly higher. The other category is the troubled countries of the Eurozone, which are trying to make up their budget deficit at the expense of business.

The lowest ranking for this tax is usually found in countries whose economies are developing and where business is supported through tax incentives. A low tax rate also makes it possible to prevent part of the business sector from moving into the “shadow economy”: this problem is relevant for many states. It is precisely such a period in a country that is the most favourable time for investment and for developing your own business. And it is precisely such a period of development that the Bulgarian economy is going through now.

According to European experts, at the beginning of 2015 Bulgaria rose 6 places in the Index of Economic Freedom, thus taking 55th place in the world. For comparison: Russia is in 153rd place and Ukraine in 162nd. And although the IMF forecasts deflation and a slowdown in the growth of the Bulgarian economy, compared with the recession expected in a number of European countries, Bulgaria is in an advantageous position.

The modern Bulgarian economy is based on free economic market initiative, which implies the development of private business and a reduction in the number of state-owned enterprises. Thanks to its advantageous geographical position and the stable financial condition of its economy, Bulgaria is becoming a promising place for doing business, including for entrepreneurs from other countries.

The manufacturing, tourism and construction sectors are the most attractive to investors. Business climate indicators in these sectors, according to the National Statistical Institute (NSI), show gradual growth. Foreign entrepreneurs who have chosen Bulgaria for investment give high marks to Bulgarian natural resources, economic freedom and the trend of business project development in the country. All these factors ensure stability of life in Bulgaria, and it is precisely calm and stability that businesspeople who have come from CIS countries, with their corruption, pressure from the tax authorities and difficult, unstable environment, lack so much.

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