Bulgaria corporate tax law 2026: all ЗКПО changes explained

With the publication of the Act Amending and Supplementing the Corporate Income Tax Act (ЗИД на ЗКПО) in the State Gazette (ДВ), issue 30 of 27 March 2026, corporate taxation in Bulgaria enters a new stage. The changes apply retroactively from 1 January 2026 and cover five main areas: the switch to the euro, a new tax relief for research and development (НИРД), accelerated depreciation for electric cars, an exemption for religious denominations and changes to international taxation.

For tax practitioners and accountants these changes matter immediately, because the deadline for declaring the advance payments under Art. 87а of the Corporate Income Tax Act (ЗКПО) expires on 15 April 2026, and the annual tax return (ГДД) under Art. 92 ЗКПО for 2025 is filed by 30 June 2026. This analysis looks at each change with specific references to the relevant paragraphs of the amending act, practical examples and recommendations.

Overview of the changes: the ЗИД на ЗКПО (State Gazette No. 30/2026)

The Act Amending and Supplementing the ЗКПО was promulgated (officially published) on 27 March 2026 and enters into force on 1 January 2026 under § 21 of the Final Provisions. The retroactive effect is significant, because taxpayers are already applying the new rules for the current year.

Alongside the ЗКПО, the same issue 30 of the State Gazette also published amendments to the Personal Income Tax Act (ЗДДФЛ), the Accountancy Act (ЗСч), the Local Taxes and Fees Act (ЗМДТ) and the Tax and Social Security Procedure Code (ДОПК). For the full picture of the 2026 tax changes, see also our analysis of the changes to the VAT Act (ЗДДС) in 2026.

Switching to the euro: updated texts

With the introduction of the euro on 1 January 2026, all amounts in the ЗКПО are recalculated and stated in euro. This affects the thresholds for advance payments, the minimum and maximum values in the law, and the way annual tax returns are completed.

Under the transitional provisions, for the 2025 tax period the financial statements and tax returns are prepared in leva, but the tax due is paid in euro. For periods from 1 January 2026 onwards, all statements and returns are prepared and submitted entirely in euro.

Under § 1 of the ЗИД на ЗКПО, Art. 1, item 2 is given a new wording which, alongside the switch to the euro, also affects the taxation of legal entities registered under the Religious Denominations Act. This change is directly linked to the new Art. 181а, discussed below.

Tax relief for research and development (НИРД): Art. 69 ЗКПО

One of the most significant new measures is the tax relief for research and development (НИРД), introduced by § 5 of the ЗИД на ЗКПО. The relief allows taxpayers to reduce their accounting financial result (СФР) by an additional 25% of the reported НИРД costs.

For the purposes of the relief, the new item 78 of § 1 of the Additional Provisions of the ЗКПО defines what counts as НИРД costs. It should be stressed that the relief cannot be applied where the costs are financed with public aid, including European funds.

Accelerated depreciation for electric cars: Art. 55(8)

With § 3 of the ЗИД на ЗКПО a new para. 8 of Art. 55 has been created, which allows an annual tax depreciation rate of up to 50% for electric cars in Category V. This is twice the standard rate for this category (25%).

The transitional rule in § 16 of the Final Provisions clarifies that accelerated depreciation applies only to electric cars acquired on or after 1 January 2026. For electric cars acquired before that date, the standard depreciation rate continues to apply.

Exemption for religious denominations: Art. 181а (new)

Through § 6 of the ЗИД на ЗКПО a new Art. 181а has been created, which provides an exemption from corporate tax on profits from the rental of real estate for legal entities registered under the Religious Denominations Act. This is a targeted measure linked to the amendment of Art. 1, item 2 ЗКПО (§ 1 of the ЗИД).

To apply the exemption, two conditions must be met cumulatively: the denomination must receive a state subsidy, and the rental income must be used for religious, social, educational or health activity. These conditions are subject to verification by the revenue authorities.

Gambling tax: Art. 238 ЗКПО, current position

The current Art. 238 ЗКПО provides for a 15% tax on gambling activity carried out through a telephone or electronic communication service. It should be clarified that the ЗИД на ЗКПО (State Gazette No. 30/2026) does not amend this provision.

The annual tax return (ГДД) under Art. 92 ЗКПО: deadlines and advance payments for 2026

The annual tax return under Art. 92 ЗКПО for the 2025 tax period is filed between 1 January and 30 June 2026. The advance payments under Art. 87а ЗКПО for the current year 2026 are declared between 1 March and 15 April 2026.

Practical tips: a checklist for the tax year-end

Given the changes to the ЗКПО for 2026 and the switch to the euro, the corporate tax year-end for 2025 and the planning for 2026 need extra attention. Here is a practical checklist for tax practitioners.

International taxation: § 11 of the ЗИД

Paragraph 11 of the ЗИД на ЗКПО introduces amendments to Art. 260я21, which concerns the rules for international taxation. These changes are linked to the transposition of the European directives on minimum taxation (Pillar Two) and mainly affect multinational enterprise groups with consolidated revenue above a certain threshold.

For most Bulgarian businesses these amendments have no direct application. They are relevant to tax advisers serving multinational structures with a Bulgarian presence and to the compliance departments of large corporate groups.

For more information on the tax changes for individuals and the ЗДДФЛ, see the guide to the 2026 tax return. For the changes to the ЗДДС introduced in parallel, see the analysis of the 2026 VAT Act changes.

Pravko provides legal information but does not replace consultation with a lawyer. For specific questions about applying the 2026 ЗКПО changes to your organisation, consult a licensed tax adviser or lawyer.