Bulgaria Parliament Approves Corporate Tax Breaks for Large Investors / Legal Services in Bulgaria

Bulgaria Parliament Approves Corporate Tax Breaks for Large Investors

by Sofia News Agency www.novinite.com

Bulgaria's Parliament voted Tuesday night amendments to the corporate tax law providing for breaks for large investors. The approved changes state that a company, which invests in the Bulgarian economy over BGN 10 M in one year, or over BGN 50 M in five years, would be allowed to defer the payment of the corporate tax for a period of five years. The decision would benefit investors in the high-tech industry, manufacturing, infrastructure development, processing industry, and the agriculture sectors. Bulgaria presently has a flat-rate corporate tax of 10%. At the same time, however, Bulgaria's Parliament voted Tuesday against the reduction of the value-added tax, which had been proposed by the rightist opposition. The suggested decrease of VAT from the present 20% down to 18% as well as its reduction to 5-7% on medicines, textbooks, printed editions, and food were rejected by the ruling three-way coalition. The MPs also decided to increase the excise tax on cigarettes - from the present BGN 37 per 1 000 pieces plus 35% of the sale price to BGN 40,5 per 1 000 pieces plus 42% of the sale price. The measure was motivated by Bulgaria's commitment to reach the minimum excise tax rates in the EU. Finally, the Parliament decided to give tax breaks to young families with mortgage loans. The measure benefits any married couple below 35 years of age owning only one house or apartment by reducing their taxes by the amount of the annual interest on their mortgage.