site.btaBulgaria Is Only EU Country Which Has Introduced 15% Global Minimum Tax without All Tax Breaks

Bulgaria Is Only EU Country Which Has Introduced 15% Global Minimum Tax without All Tax Breaks
Bulgaria Is Only EU Country Which Has Introduced 15% Global Minimum Tax without All Tax Breaks
"The Misimplementation of the Global Minimum Tax in Bulgaria" (Source: Expert Club for Economics and Politics)

Bulgaria is the only EU Member State which has introduced the 15% global minimum tax rate for multinational companies but has not put in place all tax breaks, according to a study by Plamen Donev and Stoyan Panchev of the Expert Club for Economics and Politics.

The authors found that Bulgaria is the only EU country which has not applied in full the substance-based carve-out and the de minimis exclusion. This puts the country at a disadvantage for attracting foreign investment and stimulating the leading Bulgarian industrial groups to expand internationally, according to the study. 

The rate of taxation is a key factor in attracting significant investments, the authors say and note that there is often a misconception in Bulgaria that the 10% corporate tax rate is low and therefore the problem is elsewhere. While there can be various investment barriers, it should be noted that 54% of the profits of large multinationals are taxed at an effective rate of less than 10%. Therefore, even a flat tax rate of 10% is higher than the effective rate multinationals pay on more than half of their profits, the Expert Club argued. 

The authors suggest that the introduction of the full tax break package should be a priority for the legislature and the executive in 2024. This will provide new tools and incentives for significant investment in Bulgaria. The report recommends revisions of three articles of the Corporate Income Tax Act which would introduce the full package of tax breaks and put Bulgaria on a level playing field and even give it some tax advantages in attracting multinational investments.

/DS/

news.modal.header

news.modal.text

By 01:01 on 25.05.2024 Today`s news

This website uses cookies. By accepting cookies you can enjoy a better experience while browsing pages.

Accept More information