Quick Answer
From 1 January 2026, Bulgaria introduced a series of structural and technical changes driven largely by VAT reform, labour digitalisation, and euro adoption. The most significant developments include EU-harmonised SME VAT regimes, electronic employment records, euro-denominated payroll and social security thresholds, and targeted tax clarifications for investment income and family-related reliefs.
Corporate Tax (ZKPO): Targeted but important updates
Corporate income tax rates remain unchanged in 2026. The key amendments focus on capital markets and tax-exempt income rather than day-to-day operating expenses.
Corporate income tax in Bulgaria continues to be governed by the Corporate Income Tax Act (CITA). For a structured overview of the 10% rate, tax base adjustments, and compliance framework, see:
👉 Corporate Tax in Bulgaria: 10% Rate & Rules
What changed
- The growth markets tax regime became permanent, replacing the previously temporary framework.
- Legal definitions of growth markets and financial instruments were updated and aligned with EU financial market legislation.
- Certain withholding tax exemptions were explicitly confirmed for qualifying income linked to regulated and growth markets.
What did not change
- Rules on expense deductibility, documentation, asset write-offs, and hidden profit distribution were not materially amended. These areas continue to be shaped mainly by administrative practice and court decisions.
Accurate transaction recording therefore remains critical, underlining the importance of proper bookkeeping and accounting in Bulgaria.
VAT: Structural reform affecting many businesses
VAT is where the most far-reaching changes occurred in 2026. These are explained in detail in our dedicated article on VAT changes in Bulgaria for 2026. At a high level, the reforms include:
- Introduction of EU-harmonised SME VAT regimes:
- National SME regime for Bulgaria (turnover up to €51,130, monitored on a calendar-year basis).
- EU-wide SME regime for cross-border activity (up to €100,000 EU-wide turnover).
- Clear rules preventing parallel use of SME regimes and OSS.
- Shorter VAT registration deadlines and earlier effective registration dates.
- Expanded mandatory VAT registration for EU and non-EU suppliers in certain cases.
- Adjustments to place-of-supply rules for online and virtual services.
- An expanded VAT deferral regime for imports.
These changes significantly affect compliance planning, especially for small and internationally active businesses. EU-level background can be found in the European Commission’s VAT guidance.
Labour Law: Digitalisation and wage framework changes
Labour law changes in 2026 focus on administration, transparency, and euro alignment rather than employment relationships.
Key developments
- The minimum wage for 2026 is set at €620.20 per month (approximately €3.74 per hour), based on a statutory mechanism linked to average gross earnings.
- Under transitional rules, the minimum insurable income remains €550.66, which mainly affects self-insured persons and freelancers, pending final updates under the 2026 State Budget.
- Mandatory euro conversion rules for salaries, using the fixed rate €1 = BGN 1.95583, with legally defined rounding.
- Full transition to a central electronic employment record, replacing paper labour books.
- Employers must complete the transition and return certified paper labour books to employees no later than 1 June 2026.
- New access rules define what employers and employees can see in employment history data.
- The electronic employment record is recognised as legal proof of work experience.
These changes directly affect HR workflows and payroll systems, making payroll in Bulgaria and hiring employees in Bulgaria particularly relevant for employers.
Personal Income Tax (ZDDFl): Investments, reliefs, and euro alignment
For individuals, 2026 brings targeted clarifications rather than rate changes.
What changed
- Personal income tax rules for financial instruments were aligned with corporate tax rules, clarifying tax-exempt income from regulated and growth markets.
- The option to use child tax relief in advance continues in 2026, now expressed in euro amounts.
- Donation-related tax relief references were updated.
Practical eligibility and application are covered in our guide on child tax relief in Bulgaria.
What did not change
- The criteria for treating individuals as carrying out independent economic activity remain unchanged, though still closely monitored in practice.
Social Security and Health Insurance: Euro conversion and continuity
Social security legislation did not undergo structural reform in 2026, but euro adoption has a broad technical impact.
Key points
- All insurance-related thresholds, bases, and benefits were converted from BGN into EUR using the official rate €1 = BGN 1.95583.
- For 2026, the maximum monthly insurable income is €2,111.64, applied under transitional rules based on the converted 2025 parameters.
- Minimum insurable income for self-insured persons is aligned with the transitional base of €550.66, pending final budget adoption.
- Until the final 2026 budgets are adopted, 2025 parameters continue to apply under transitional legislation.
- Contribution rates and the structure of social insurance remain unchanged.
Official administrative guidance continues to be issued by the Bulgarian National Revenue Agency (NRA), while benefit-related rules and payments are administered by the National Social Security Institute (NSSI / NOI).
Legislative status and updates
This article summarises the legislative changes applicable as of January 2026. Some measures are currently based on transitional rules, as the final State Budget and related social security and health insurance budgets for 2026 have not yet been adopted.
Given the dynamic nature of the legislative process, additional adjustments are expected—particularly in areas affecting payroll and social security planning. We will update this overview where changes materially affect businesses, employers, or individuals.
Frequently Asked Questions (FAQ)
What are the most important tax changes in Bulgaria for 2026?
The most significant changes in 2026 relate to VAT reform (new SME regimes and thresholds), labour law digitalisation (electronic employment records), and euro conversion of payroll and social security amounts. Corporate and personal income tax rates remain unchanged.
Did Bulgaria change tax rates in 2026?
No. In 2026, Bulgaria did not increase corporate income tax or personal income tax rates. The standard 10% flat tax remains in place. Most changes affect compliance rules, thresholds, and administrative procedures rather than tax rates.
What is the VAT registration threshold in Bulgaria in 2026?
For 2026, the national VAT registration threshold in Bulgaria is €51,130, monitored on a calendar-year basis. An EU-wide SME VAT regime also applies for businesses with total EU turnover up to €100,000, subject to specific conditions.
What changed in payroll and social security in Bulgaria in 2026?
Payroll and social security changes in 2026 are mainly technical. Salaries and contribution thresholds are now expressed in euro, electronic employment records replace paper labour books, and transitional social security parameters continue to apply until the final 2026 budgets are adopted.
Conclusion
2026 is not a year of sweeping tax rate increases in Bulgaria. Instead, it marks a shift toward EU harmonisation, digital administration, and euro alignment, with the most significant changes affecting VAT compliance, labour administration, and the application of monetary thresholds.
For businesses and individuals, the main risk lies not in higher taxes, but in misinterpreting thresholds, timing rules, or transitional provisions during a fluid legislative period.
How Aidos can help
At Aidos, we continuously monitor legislative developments and translate them into practical guidance for business owners, employers, and internationally active individuals. If you are unsure how the 2026 changes apply to your specific situation, you can contact Aidos to discuss the implications before taking action.
Disclaimer
This article is for informational purposes only and does not constitute tax, legal, or accounting advice. Individual circumstances require tailored assessment.
Last reviewed: February 2026
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