Parliament has passed at first reading a one-off 33% tax on the windfall profits of banks, insurers, food traders, telecoms, currency exchanges and fast-loan firms. The tax is expected to raise €800m for the budget.
The cabinet approved the changes to the Corporate Income Tax Act at its meeting last Wednesday and sent them to parliament on 5 November, a day later. The budget committee took up the package at an extraordinary session on Tuesday.
The previous development: Budget committee debates 33% windfall tax and vouchers of up to €200
All 127 votes in favour came from Progressive Bulgaria (PB). The 75 votes against came from five groups: 18 from Democratic Bulgaria (DB), 19 from GERB-SDS, 15 from the DPS, 12 from We Continue the Change (PP) and 11 from Vazrazhdane. No one abstained.
Food traders will pay the tax if their net sales revenue for 2026 is at least €5m. They can cut the tax bill by 30% if the money goes into investment or reserves.
Employers will be able to give food vouchers worth up to €200 a month, up from €102.26. Fixed tangible and intangible assets will count for tax purposes from €1,000, up from €357.90 (700 leva). The time limit for carrying forward tax losses doubles from 5 to 10 years, and losses can offset up to 70% of a positive taxable profit.
Artificial intelligence technology, high-performance computing equipment and servers will get faster tax write-offs. A new regime also covers benefits in kind, when a firm's own, rented or lent assets are used for personal needs. The authors of the bill say this will tax personal spending paid through a company in a fairer and more consistent way.
MPs rejected a DB proposal for a zero rate on profit that is put back into machines, production equipment and apparatus. They also dropped the caretaker cabinet's idea of tax breaks for donations to sport. Deputy finance minister Lyudmila Petkova said the ministry backed neither. She said the caretaker cabinet's text was not well enough justified, did not show clearly what it would do to the budget and did not help the aims set out in it. The DB proposal, she said, is a permanent measure for all firms, with no conditions tied to specific goals.
Konstantin Prodanov of PB defended the tax as a temporary step to steady public finances next year, when the deficit will be very large. He said EU countries have used such a tax without a drop in foreign investment or investment activity. In his view, the exceptional factors are Bulgaria joining the eurozone and the European Central Bank's interest rate policy, and the tax hits only profit above the normal level.
Vladislav Panev of DB said the budget's problem is spending, not revenue, and that the bill risks a recession. Martin Dimitrov of DB said those in power want to tax "everything that moves and everything that doesn't move". He said firms lose the incentive to cut prices.
Vladislav Goranov of GERB-SDS said the budget is turning into a tool for government spending, not for growth. He called it unwise to cover permanent costs with one-off revenue.
Asen Vasilev of PP said state investment is falling by €4bn, while the finance ministry expects private firms to invest €3bn more. If that does not happen, a recession follows, he warned. Vasilev called the tax a mistake that will do more harm than the €800m will bring in. He insisted that, if it goes ahead, it should cover energy too.
Ayten Sabri of the DPS said the burden will fall on consumers through higher prices and will push up inflation. Tsoncho Ganev of Vazrazhdane called the law yet another tax rise. His party colleague Dimo Drenchev asked why the arms industry should not pay a windfall tax because of the war.
The bill now goes to a second-reading vote.