site.btaReligious Denominations Exempted from Rent Income Tax

By amendments to the Corporate Income Tax Act passed conclusively on Friday, Bulgaria's Parliament exempted from corporate tax the income accruing to religious denominations from renting real estate.

Under the adopted provisions, the profit from renting real estate owned by a religious denomination registered under the Religious Denominations Act will not be subject to corporate tax if the denomination concerned has received a state subsidy in the relevant year, the rent income is spent on religious, social, educational or healthcare activities, and the property is not used for unrelated business purposes.

In connection with the implementation of the National Recovery and Resilience Plan, the National Assembly also introduced a more favourable tax depreciation treatment for electric cars, with the annual tax depreciation rate not exceeding 50%. The measure will apply to electric vehicles acquired on or after January 1, 2026.

The legislature also approved a tax incentive for research and development activities, allowing taxable entities, under certain conditions, to have an additional 25% of their expenses recognized for tax purposes, including when R&D activities result in the creation of a fixed intangible asset.