Bulgaria Should Focus on Improving of the Investment Climate Rather Than Tax Hikes

Statement of AmCham Bulgaria on the Corporate Income Tax

AmCham Bulgaria is very concerned about the potential increase of the corporate tax for businesses in Bulgaria via the Corporate Income Tax Law Amendment (under EU directive 2022/2523). The organization is supportive of the application of 15% global corporate tax in Bulgaria. However, there are tools provided in the current legislation to apply some exemptions and to moderate the impact on business of this tax change. We don’t support the current approach of this tax application in Bulgaria. Such an approach gives a very wrong signal at a very wrong moment to both current and new investors.

The strategic objective of AmCham Bulgaria is to work for improvement of the investment climate in Bulgaria. It is a fact that the FDI level in Bulgaria is at extremely low level compared to other EU Countries and even worldwide. It is a fact, that the business environment in Bulgaria has its challenges, however one of the few positive elements of it, that is having consistency over the years, is the current tax rates. It gives the country a competitive advantage to sustain and attract investors. Also, there was general agreement among key Bulgarian stakeholders over the years that tax rate should be kept intact.

Indeed, there are two ways to increase tax collection. The first one is to increase taxes for both business and individuals. The second one is to have the economy grow, which leads to an increase in the amount of collected tax. For AmCham Bulgaria the more sustainable approach is to have economic growth in a favorable investment climate.

The investors – both local and foreign – create added value, and their contribution to the state and local budgets and to the social security system is significant. Thus, they should be stimulated to remain in Bulgaria and to be the ambassadors of Bulgaria before other new investors by speaking about the better business environment here. This will create the conditions for increased tax collection via investment increase.

AmCham Bulgaria, along with other business associations, is part of the stakeholder panels via which organizations such as OECD collects feedback about Bulgaria’s readiness to join OECD. Moreover, in 2023 alone, AmCham Bulgaria engaged with the other two major objectives that our country has – accession to the Eurozone and joining the Schengen space of the EU. In March we organized an international conference on the Eurozone having the BNB Governor as a key-note speaker, and in November together with other bilateral chambers joined the efforts of the Ministry of Economy and Industry in Bulgaria about Bulgaria and Romania’s accession to Schengen.

It was said by Olivier Marquette, AmCham Bulgaria President and Ivan Mihaylov, CEO during today’s press conference with other bilateral chambers such as the German-Bulgarian Industrial and Trade Chamber, Confindustria Bulgaria, Belgium-Bulgaria-Luxembourg Club, and with the Confederation of Employers and Industrialists in Bulgaria at the National Press Club of the Bulgarian News Agency.