Eurofast, a regional business advisory organization with a presence in over 21 cities across South East Europe, the Middle East, and the Baltics, is uniquely positioned as a one-stop shop for investors and companies seeking professional services. The latest amendments to the Bulgarian Corporate Income Tax Act introduce significant changes, including an additional tax for multinational and large national enterprise groups, effective from January 1, 2024.
Global Minimum Taxation
The cornerstone of these amendments is the implementation of a global minimum level of taxation. This new tax regime applies to both multinational and large national enterprise groups. To fall within the scope of this taxation, a group must have a turnover of at least €750,000,000 according to consolidated financial statements for at least two of the last four tax periods.
Types of Additional Taxation
The Corporate Income Tax Act outlines the procedure for calculating, declaring, and paying corporate tax. Entities subject to the additional tax must submit an informative declaration for each separate jurisdiction. Payment to the National Revenue Agency (NRA) for the national additional tax, primary, and secondary additional tax is due within 15 months after the tax period (18 months for the initial tax period falling under minimum taxation).
Tax Base and Amount
The amended CITA defines the tax base and payable taxes. Calculations involve adjusted included taxes and allowable profit or loss. Based on this, the effective tax rate for a specific jurisdiction is determined. If the effective rate is below 15%, a corresponding additional tax is levied.
European Directive Influence
These amendments align with the European Directive (EU) 2022/2523, which aims to establish a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups within the Union. This directive ensures that all large enterprises contribute their fair share of taxes, thereby promoting a more equitable taxation landscape across Europe.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances regarding taxation.
