The Bulgarian Parliament adopted changes to the legislation on corporate taxation which will enable the state to temporarily tax excessive profits generated by companies active in the crude oil, petroleum refining, natural gas and coal industries.
The amendments provide the introduction of 33 % corporate tax on windfall profits applicable in 2022 and 2023. The measure aligns with an EU strategy to alleviate the burden of high energy prices on wholesale and retail end users.
State-owned Bulgarian Energy Holding (BEH), which comprises state-owned energy companies, already contributes regular payments to the Electricity System Security Fund used to cover state subsidies extended to businesses to offset soaring electricity prices. The state will now be able to add revenues from corporate tax to the fund.
Last month, Bulgarian caretaker Government and Lukoil Bulgaria reached agreement on Russian Lukoil transferring its financial operations in Europe to Bulgaria, which will lead to additional contribution of between 300 and 350 million euros in revenues to Bulgaria’s state budget next year.