The Bulgarian Tax System in the Context of the European Union Countries: Comparative Aspects

Пресияна Ненкова; Величка Николова; Ангел Ангелов

doi:10.37075/RP.2025.1.01

Authors

Prof. Dr Presiana Nenkova Department of Finance, Faculty of Finance and Accounting, UNWE Author https://orcid.org/0000-0003-2948-6502
Chief Assist. Prof. Dr Velichka Nikolova Department of Economics, Faculty of General Economics, UNWE Author https://orcid.org/0000-0002-2920-4061
Assist. Prof. Dr Angel Angelov Department of Finance, Faculty of Finance and Accounting, UNWE Author https://orcid.org/0000-0002-8578-3934

DOI:

https://doi.org/10.37075/RP.2025.1.01

Keywords:

Tax policy, Taxes, Bulgaria, European union

H20, H24, H25, H62

Abstract

The current study examines the Bulgarian tax system in the context of the European Union countries. Through an analysis of the values of fiscal indicators measuring the tax burden and illustrating the tax structure, and of their change in the period 1995-2022, Bulgaria's position in relation to the countries of the European Union is highlighted and the effects of the tax policy pursued on the structure of tax revenues in Bulgaria are traced. In the course of the study, the applied tax policies in time of crises are also examined with an emphasis on the role and importance of the tax reliefs used. The main conclusions reached are related to the achievement of a lower tax burden in Bulgaria compared to most EU countries, which is mainly due to the taxation stemming from direct taxes, while at the same time there is a higher tax burden on consumption, but also a relatively low share of tax expenditures in GDP and budget revenues.

References

Angelov, A. (2015). Tax Reforms in EU Member States During the Post-Crisis Period. Proceedings of the Eleventh International Scientific Conference of Young Researchers on the Topic: "Economics of Bulgaria and the European Union: Competitiveness and Innovations", pp. 581-589.

Angelov, Angel (2020). Effects of Tax Expenditures. Proceedings of the Fifteenth International Scientific Conference of Young Scholars on the Topic: "Bulgaria's Economy and the European Union: Circular Economy and Corporate Social Responsibility", pp. 155-166.

Brusarski, Rumen (2012). Taxation of Labor Income in Bulgaria (1990-2008). Economic Thought Journal, 3-25.

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, 32006L0112. URL: https://eur-lex.europa.eu/legal-content/BG/TXT/PDF/?uri = CELEX:32006L0112 (accessed 2024-09-21)

Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, 32016L1164. URL: https://eur-lex.europa.eu/legal-content/BG/TXT/PDF/?uri = CELEX:32016L1164 (accessed 2024-12-21)

Directive (EU) 2018/912 of the Council of 22 June 2018 amending Directive 2006/112/EC on the common system of value added tax regarding the obligation to maintain a minimum size of the standard tax rate, 2018/912.

Council Directive (EU) 2020/262 of 19 December 2019 laying down the general excise duty regime (recast text), 32020L0262. URL: https://eur-lex.europa.eu/legal-content/BG/TXT/PDF/?uri = CELEX:32020L0262 (accessed 2024-09-21)

Directive (EU) 2022/2523 of the Council of 14 December 2022 to ensure a global minimum level of taxation of multinational enterprise groups and large national groups in the Union, 32022L2523. URL: https://eur-lex.europa.eu/legal-content/BG/TXT/PDF/?uri = CELEX:32022L2523 (accessed 2024-12-21)

Law on Amendment and Supplement to the Value Added Tax Act, State Gazette no. 55 from 2020. URL: https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat=149040 (accessed 2024-09-21)

Law on Amendments and Additions to the State Budget Act of the Republic of Bulgaria for 2022, published in SG No. 52 of 2022, in force from 01.07.2022, State Gazette no. 52 from 2022. URL: https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat = 174605 (accessed 2024-12-21)

Law on Amendment and Supplement to the Corporate Income Tax Law, State Gazette no. 106 from 2023. URL: https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat=201970 (accessed 2024-12-21)

Law on Amendment of the Law on Local Taxes and Fees, State Gazette no. 71 from 2020. URL: https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat=150353 (accessed 2024-09-21)

Ministry of Finance (2020). Report on Tax Expenditures 2020. Ministry of Finance. URL: https://www.minfin.bg/upload/49305/Doklad+danychni+razhodi+2020+BG.pdf (accessed 18 June 2024)

Ministry of Finance (2021). Report on Tax Expenditures 2021. Ministry of Finance. URL: https://www.minfin.bg/upload/53218/Doklad_danachni_razhodi_2021.pdf (accessed 18 June 2024)

Ministry of Finance (2022). Report on Tax Expenditures 2022. Ministry of Finance. URL: https://www.minfin.bg/upload/56604/Doklad+pa+danacnite+razhodi+2022.pdf (accessed 18 June 2024)

Ministry of Finance (2023). Report on the Execution of the State Budget of the Republic of Bulgaria for 2022. Ministry of Finance. URL: https://www.minfin.bg/upload/56071/Doklad_2022.pdf (accessed 27 September 2024)

Ministry of Finance (2023). Forecast for Tax Expenditures for 2023. Ministry of Finance. URL: https://www.minfin.bg/upload/56445/Tax+Expenditure+Forecast_2023_BG.PDF (accessed 18 June 2024)

Ministry of Finance (2024). Forecast for Tax Expenditures for 2024. Ministry of Finance. URL: https://www.minfin.bg/upload/57297/Tax%2BExpenditure%2BForecast_2024_BG_Jan%2B2024.pdf (accessed 18 June 2024)

Ministry of Finance (2024). Resolution No. 16 of the Council of Ministers of January 12, 2024, on Approval of Changes to the Updated Medium-Term Budgetary Forecast for the Period 2024-2026, Approved by Resolution No. 830 of the Council of Ministers of 2023. Ministry of Finance. URL: https://www.minfin.bg/upload/57176/24RH016pr_merged.pdf (accessed 18 June 2024)

Ministry of Finance (2024). Data on Consolidated Fiscal Program (annual). Ministry of Finance. URL: https://www.minfin.bg/upload/57297/Tax%2BExpenditure%2BForecast_2024_BG_Jan%2B2024.pdf (accessed 18 June 2024)

Regulation (EU) 2020/261 of the Council of 19 December 2019 amending Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties, in connection with the content of electronic registers, 32020R0261. URL: https://eur-lex.europa.eu/legalcontent/BG/TXT/PDF/?uri = CELEX:32020R0261- (accessed 2024-12-21)

Decision (EU) 2020/263 of the European Parliament and of the Council of 15 January 2020 on the computerisation of the movement and control of excise goods (recast text), 32020D0263. URL: https://eur-lex.europa.eu/legal-content/BG/TXT/PDF/?uri = CELEX:32020D0263 (accessed 2024-12-21)

Angelov, Angel (2024). Tax and Social Insurance Burden on Labour Force in Bulgaria and The European Union. Economic Archive, 77(2), 21-46. DOI: https://doi.org/10.58861/tae.ea-nsa.2024.2.02.en

Angelov, Angel & Nikolova, Velichka (2021). The impact of tax burden and tax structure on the economic growth of the Balkan region. Finance, Accounting and Business Analysis (FABA), 3(1), 31-40.

Baldesi, N., Brusini, I., & Profeta, P. (2023). National tax Measures in response to the COVID-19 crisis: Assessment of their impact and results lessons to be learned for future crises. European Parliament.

European Commission (2025). Data on Taxation Trends, Data on Taxation, Tax Revenue – Tax Revenue by economic function, Tax Revenue by type of tax. European Commission, Taxation and Customs Union. URL: https://webgate.ec.europa.eu/taxation_customs/redisstat/databrowser/view/TAX_EC_FUNC/default/table?lang=en (accessed 22 September 2024)

European Commission (2025). Data on Taxation Trends, Data on Taxation, Tax Revenue - Tax Revenue by type of tax. European Commission, Taxation and Customs Union. URL: https://webgate.ec.europa.eu/taxation_customs/redisstat/databrowser/view/TAX_TYPE/default/table?lang=en&category=TAX_REVENUE (accessed 22 September 2024)

European Commission (2011). Taxation trends in the European Union, 2011 edition. European Commission.

European Commission (2025). Joint communication to the European Parliament, The Council, The European economic and social committee and The Committee of the Regions, EU external energy engagement in a changing

world. European Commission. URL: https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:52022JC0023 (accessed 2024-07-22)

European Commission (2023). Taxation and Customs Union. Data on Taxation Trends – Methodological and Explanatory Notes. European Commission. URL: https://taxationcustoms.ec.europa.eu/document/download/9392a0fe-fc17-4cb6-b9c9-56e71f-21caec_en?filename=Methodology2023.pdf (accessed 5 September 2024)

European Commission (2023). VAT Gap in the EU, 2023 Report. European Commission. DOI: https://doi.org/10.2778/911698

European Commission (2024). Annual Report on Taxation. European Commission.

European Commission (2022). Taxation and Customs Union, Data on Taxation Trends, Data on Taxation, Indicators, Other indicators, Statutory tax rates. European Commission. URL: https://ec.europa.eu/taxation_customs/document/download/6e2a5960f13c-4aef-b115-60e3ba232966_en?filename=statutory_rates_2022.xlsx (accessed 22 September 2024)

European Commission (2025). Taxes in Europe Database v4. European Commission. URL: https://ec.europa.eu/taxation_customs/tedb/#/home (accessed 4 July 2024)

European Commission (2021). Fit for 55. European Commission. URL: https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55/ (accessed 1 October 2024)

European Commission (2024). GDP and main components (output, expenditure and income). URL: https://ec.europa.eu/eurostat/databrowser/product/view/nama_10_gdp (accessed 1 October 2024)

GTED (2024). Global Tax Expenditure Database. URL: https://gted.taxexpenditures.org/ (accessed 31 May 2024)

D Metalova & P Nenkova (2021). Tax Revenue Structure and Its Components in Bulgaria: Where Does Tax Revenue Come From?. Finance, Accounting and Business Analysis (FABA), 3(2), 120-130. URL: https://faba.bg/index.php/faba/article/view/97/45 (accessed 2024-09-21)

Popova, N. (2017). Effects of the global crisis on tax policy of new EU member states from Central and Eastern Europe. Book of Proceedings of 23rd International Scientific Conference on Economic and Social Development, pp. 155-164.

Wolff, G. B. (2005). Measuring Tax Burdens in Europe. ZEI Working Paper 09.