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Draft changes to Corporate Income Tax Law — Orbitax Tax News & Alerts

On 7 October 2008, the Ministry of Finance announced draft amendments to the Corporate Income Tax Law. If approved by the parliament, they would enter into force as of 1 January 2009. The most important proposed changes are summarized below.

Capital gains exemption

Currently, capital gains on quoted shares realized on the Bulgarian Stock Exchange are exempt, while corresponding losses are not deductible. The exemption also applies to such capital gains realized by non-residents.

The amendment would broaden the scope of the exemption (and the corresponding non-deduction) to transactions effected through the stock exchange of any EEA Member State by a Bulgarian resident or a non-resident that is resident in any EEA Member State.

Capital losses and exemption method

Similar to the current limitation on losses of foreign permanent establishments, the proposal provides for a ban on foreign-source capital losses where a tax treaty provides for the exemption method for the elimination of double taxation on capital gains.


The list of qualifying beneficiaries will be updated to include beneficiaries from the EEA. However, certain types of beneficiaries would be removed from the list of qualifying beneficiaries.

Employment incentive

The proposal provides for the abolition of the employment aid scheme for depressed regions.