Tax valuations of property will rise by 30% in 2027 and by 35% in each of 2028 and 2029. Banks, insurers and several other sectors will pay a 33% windfall tax for 2027. These are the changes to tax laws that the Council of Ministers approved today, the government press office said.

Before the meeting, the press office said the agenda had seven tax and finance laws, including the law on local taxes and fees.

More on this story: Cabinet to consider changes to seven tax laws and compensation for parents

Valuations go up for buildings, land, improvements and farmland. The same law drops the rules on the patent tax on income that companies earn from restaurants and entertainment venues. In an opinion, the European Commission classed this scheme as state aid.

Families with children will get bigger tax breaks. These will be €5,000 for one child, €10,000 for two children and €15,000 for three or more. For a child with a disability, the break is €12,000.

A new child development break of €2,000 per child will cover health, education and sports activities. People will be able to claim the breaks in advance during the year, which the government says raises families' disposable income.

Banks, insurers, telecom firms, currency exchange offices and quick-loan firms will pay the windfall tax. Food traders will pay it if their net sales revenue for 2026 is at least €5m. Firms can write off up to 30% of the tax for certain purposes, such as investment or reserves.

The government press office says the new tax does not change corporate taxation and does not affect tax on standard profit.

Every employee will be able to get food vouchers from their employer worth up to €200 a month. Until now the cap was €102.26 (200 leva), and amounts above it will face a final tax of 7%.

Firms will be able to deduct tax losses over 10 years, not 5 as now. The cabinet is also adding a limit: the deduction cannot exceed 70% of the positive tax financial result.

Artificial intelligence technology, high-performance computing equipment and server infrastructure will be written off faster, at double the annual rate but not above 100%. The threshold at which an item or right counts as a long-term asset for tax purposes becomes €1,000. It was 700 leva (€357.90).

A new procedure will set how benefits in kind are taxed when a firm provides its own assets, or assets it rents or gets from someone else, for personal use. The government says the aim is to tax personal spending paid for by a firm more fairly and consistently.

The VAT registration threshold will rise in three steps, from €60,000 in 2027 to €70,000 in 2028 and €75,000 in 2029. Small firms with turnover below the threshold will keep the right to opt into the general VAT regime.

The government puts the rise down to inflation, economic growth and current economic conditions. The cabinet says the three-year schedule gives business certainty and a chance to plan further ahead.

The current threshold has applied since 1 April 2025. It was lowered then to ease the burden on business. The statement says its effect quickly wore off because of accumulated inflation and rising turnover at small and medium-sized firms.

The statement also says that under EU law each country sets its own VAT threshold. It takes into account its economy, the administrative burden, the costs to business and to the administration, budget revenue and other factors. The cabinet says the new threshold will let the tax authority put more resources into fighting tax fraud, evasion and avoidance. It says there will also be resources for better service and for more effective VAT collection from large firms.

Owners of passenger cars with an internal combustion engine of 250 kilowatts (340 horsepower) or more will pay a new excise duty. The amount depends on power: €500 for 250 to 300 kW, €1,500 for 301 to 350 kW, €3,000 for 351 to 500 kW and €6,000 above 500 kW.

Fully electric cars and special service vehicles, such as ambulances, fire engines and vehicles with a special traffic regime, are exempt. For hybrids, only the power of the combustion engine counts, as shown on the EC certificate of conformity or another official document. The government says the duty is needed to bring extra revenue into the budget.

The excise law also sets a deadline for selling tobacco products and alcohol with the old tax stamp after a new design is introduced. It also provides for steps to make customs checks more effective and to stop excise evasion. The rules on moving, storing and using energy products, electricity and other excise goods change, to cut uncertainty and give effective control without a new burden on honest operators.

Fines and property penalties in several laws are being updated because of inflation and social and economic changes in recent years. Some fines under the Personal Income Tax Act have stayed the same since 2007. The government wants higher penalties to deter offenders and encourage voluntary compliance with the law.

The changes also set out who declares and pays taxes when firms are restructured, and how and by when. This covers the transfer of property to a sole trader, withholding tax on dividends, liquidation shares and income of foreign persons, the tax on expenses and the alternative tax. The deadline for declaring is also stated explicitly where the restructuring takes place before the deadline for the previous year's annual return and that return has not yet been filed.

The form that pension insurance companies and insurers use to exchange information with EU countries will be published on the website of the National Revenue Agency (NRA), not in the State Gazette.