site.btaEmployers Threaten Protest over Government Plans for 15% Corporate Income Tax

Representatives of bilateral trade organizations and the Confederation of Employers and Industrialists in Bulgaria (CEIB) held a news conference in Sofia Tuesday to call for an exception to be introduced in the Corporate Income Tax Act that would cushion the effect of a  planned increase in the corporate income tax to 15%.

Pursuant to Directive (EU) 2022/2523 and a decision of the OECD, Parliament adopted on first reading in November a legal revision whereby multinational and large national corporate groups would be subject to an additional tax and/or a national additional tax to make sure they pay at least 15% corporate income tax.

Bulgaria currently taxes them with a flat rate of 10%.

CEIB Board chairman Kiril Domuschiev said during the news conference that if the business demand is not taken into account, his organization will consider protests.

Domuschiev, as well as representatives of the American Chamber of Commerce in Bulgaria, the Belgium-Bulgaria-Luxembourg Business Club, the German-Bulgarian Chamber of Industry and Commerce and Confindustria-Bulgaria, who participated in the news conference, said that their businesses are not against the 15% tax, since it is imposed in the EU, but is against Bulgaria being the only country that lacks this relief for substantial business activity. 

Domuschiev spoke of loss of respect and confidence between the business community and the government, and warned that this country is "headed towards a Greek model, if the government relies only only increased taxes and borrowing".

Tim Kurth, President of the German-Bulgarian Chamber of Commerce and Industry, pointed out that many of the Chamber's members would be affected by the income tax hike and stressed that the organization agrees with the minimum effective taxation of 15%, but not with not having a relief for substantial businesses when there are companies that contribute to the development of labor and invest in tangible assets in Bulgaria. He said this was a concern not only for German companies that had already invested here, but also for future investors. Until now, Bulgaria has been famous for having a good tax model and it would be strange if it remained the only EU country that did not offer a relief for substantial businesses, Kurth said.

The President of AmCham Bulgaria, Olivier Marquette, also pointed out that one of Bulgaria's strengths is its tax system and that there is agreement in society that it should remain as it is in order to preserve this advantage. 

Confindustria-Bulgaria said that they support the introduction of the EU directive, but it is of utmost importance to also introduce reliefs.