Payroll, contracts and statutory books all have to reconcile against the fixed BGN 1.95583 conversion rate. What should be verified independently rather than assumed converted.
- Dividend tax rate in flux
- Fixed, irrevocable conversion rate
- Is the 5% dividend withholding tax rate stable?
Bulgaria applies a flat 10% corporate income tax rate, unchanged since 2007 and the lowest headline rate in the European Union, alongside a 20% standard VAT rate and employer social security contributions of 18.92% to 19.62% of gross salary depending on activity-based work-injury risk. Dividends distributed from 2026 profit are subject to 5% withholding tax, though this rate held only because a proposed increase to 10% lapsed when early parliamentary elections forced the 2025 budget to be extended into 2026. An EOOD or OOD can be formed with nominal share capital of €1 (redenominated from BGN 2); an AD requires €25,000, of which at least 25% must be paid up at formation.
What a company pays in Bulgaria. Every figure below is published on the Bulgaria country page.
| Bulgaria | |
|---|---|
| Corporate tax rate | 10% flat (lowest in the EU) |
| VAT standard rate | 20% |
| VAT reduced rates | 9% (accommodation, e-publications, select baby/infant products) |
| Accounting standard | Bulgarian National Accounting Standards (NAS) or full IFRS as adopted by the EU (SME choice; IFRS mandatory for Public Interest Entities) |
| Currency | EUR (adopted 1 January 2026, replacing BGN at the fixed rate €1 = BGN 1.95583) |
What makes it complex in Bulgaria
- Dividend tax rate in flux — — the 5% withholding rate held for 2026 only because a proposed rise to 10% lapsed with early elections; groups should not assume the rate is settled long-term.
- Fixed, irrevocable conversion rate — — €1 = BGN 1.95583 applies to all contracts, payroll and statutory accounts; salary conversions must round in the employee's favour.
Is the 5% dividend withholding tax rate stable?
It held for 2026 only because a proposed increase to 10% in the draft 2026 budget was not enacted, after early parliamentary elections forced the 2025 budget to be extended. Companies should not treat 5% as a settled long-term rate and should monitor the next budget cycle.
Is Bulgaria still using the lev?
No. Bulgaria adopted the euro on 1 January 2026, at the fixed and irrevocable rate of €1 = BGN 1.95583. Following a one-month dual-circulation period, the lev ceased to be legal tender on 1 February 2026, though lev banknotes and coins remain exchangeable for euro at the Bulgarian National Bank indefinitely, and at commercial banks free of charge until 30 June 2026.
Dividend tax rate in flux is one of the points HTLC Network handles for clients operating in Bulgaria, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In Bulgaria the scope is: Statutory accounts under Bulgarian National Accounting Standards or IFRS, VAT returns, and corporate tax filings, including verification of euro-redenominated ledgers against the fixed BGN 1.95583 conversion rate.
See Accounting & Tax Compliance in Bulgaria for the full scope, or the Bulgaria country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.