According to the Corporate Income Tax Act (CITA), all legal entities and unincorporated associations, which carry out economic activity in Bulgaria, are subject to the levy of corporation tax at the rate of 10%. For the purposes of this Act, the unincorporated associations are treated as equivalent to legal entities.
Resident legal entities are liable to tax in respect of the profits and income accruing to them from all sources both inside and outside Bulgaria.
Non-resident legal entities are subject to corporation tax only in respect of their economic activity in Bulgaria.
The annual taxable profit must be declared in a tax return on or before 31 March of the following calendar year. The taxable profit is a positive quantity, computed on the basis of the financial result (accounting profit/loss), arrived at as the difference between income and expenditure before assessment of taxes on profit and adjusted according to the procedures established by Chapter Six of CITA. Depreciation expenses are determined to arrive at the taxable profit for tax purposes. The amount of depreciation varies by category of asset and is arrived at by systematic application of the straight-line depreciation method.