Income Taxes in Bulgaria

The level of corporate taxation is very important for doing business in the country where the business is conducted. There is an official ranking of the level of the profit tax in all European countries, including Russia. The highest rate of this tax is in France it is 38%. The lowest rate is in Bulgaria, only 10%. No wonder Bulgaria together with Cyprus, where the tax is 12.5%, has recently become a favorite country for investment among Russian-speaking businessmen.

What will tell the ranking of tax rates?

Any business is created and conducted for profit. The results of the rating of the profit tax clearly demonstrate the level of tax pressure from the state on profit made in different countries. Of course, such data do not relate to the overall performance of the integrated taxation, it does not say that the state is trying to stimulate a business. And yet this figure allows us to draw certain conclusions.

States have in two cases the maximum rate of the profit tax. The first category is the economically developed countries, where, respectively, increases a social burden aimed to the business. The other category is troubled Eurozone countries that are trying to compensate for the budget deficit at the expense of the business.

The lowest rating of such tax usually has a country whose economy is evolving and the business is supported by tax incentives. A low tax rate allows you to avoid moving part of business in the «shadow sector» of the economy: this problem is actually for many countries. This period in the country is the most favourable time for investments and business development. And the Bulgarian economy is going through such a period of development.

According to European experts at the beginning of 2015 Bulgaria rose by 6 points in the Index of the economic freedom to the 55 place in the world. For comparison, Russia is located on 153, and Ukraine – on 162. Although the IMF gives forecasts about deflation and slower growth of the Bulgarian economy Bulgaria is in a winning position compared to the recession, which is expected in several European countries.

The modern Bulgarian economy is based on the free economic market initiative, which involves the development of private business and the decrease in the number of businesses that are owned by the state. Due to the advantageous geographical position and stable financial state of the economy, the Bulgaria is becoming a promising place for doing business, including for entrepreneurs from other countries.

Manufacturing, tourism and construction are the most attractive for investors. Indicators of the business climate in these areas, according to the National Statistics Institute (INE) show a gradual increase. Foreign entrepreneurs that choose Bulgaria for investment highly appreciated the Bulgarian natural resources, economic freedom, and the tendency of the development of business projects in the country. All of these factors contribute to the stability of life in Bulgaria, and in fact the peace and the stability so lacking for businessmen, who came from CIS countries with their corruption, pressure from tax authorities and a complex unstable environment.

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