Bulgaria's so-called "weekend tax" could more than double, rising from 3% to 7%. That's the plan in a draft law on changes to the Corporate Income Tax Act, which the finance ministry put out for public comment on September 23. People can send comments and suggestions until October 23, 2026.

The tax hits the part of a company's costs that covers an employee's personal use of a company car, property, phone, computer or other equipment. It applies to workers, employees, managers and anyone doing personal work for the firm. The name is misleading — it doesn't matter whether someone drives the car on a Saturday or a Sunday.

A company can pick how it measures personal use of a car: by comparing personal kilometres to total kilometres driven, by hours, or by simply taking a fixed 50% of the car's costs. For property, the company works out the share by floor space or by time spent on personal use. For other equipment, 20% of the costs count as personal use unless the company can show a different figure. The ministry says a company must state which method it used in its annual corporate tax return. If a car is used only for work, and the company can prove it, the tax doesn't apply.

Take a company car that costs 20,000 leva a year, with 50% personal use: the taxable amount comes to 10,000 leva. Today that means a tax of 300 leva; at 7% it would be 700 leva.

The ministry argues in its reasoning that the current 3% rate is too low and makes the rule pointless. For a company, the tax is final, but both the expense itself and the tax paid on it get counted when working out the company's taxable profit — so the real cost ends up below the stated 3%. That's one reason the ministry wants to raise it. It hasn't said how much extra money it expects the change to bring in.

The rule dates back to 2016, when it started at 10%. The rate dropped to 3% on January 1, 2022. It followed a long-running argument over company cars, luxury properties and the right to claim tax credit. The goal was to stop businesses deducting VAT in full and writing off the full cost of an asset that technically belongs to the company but often also serves the private life of an owner, manager or employee. Now, after the 2022 cut, the state wants to push the rate back up.

Employers have another option, too. They can treat personal use as income in kind for the employee under the Personal Income Tax Act, adding it to the employee's pay as taxable income. That route means more work — individual calculations, extra paperwork, more accounting — so many firms would rather just pay the flat tax under the Corporate Income Tax Act.

Back in 2018, Petar Kanev, then chairman of parliament's economic committee, asked the finance ministry for data — how much the tax actually brings in from cars, property and other assets, and how much it costs businesses to administer. He wanted to stop businesses carrying a burden that nobody had properly measured.

The proposal is part of a bigger tax package the ministry released in September. It's also taking comments on personal income tax, VAT, local taxes and fees, accounting rules and excise duties. Once the comment period closes, the texts go to the Council of Ministers, then to parliament.