Bulgaria/Greece – Taxation

Doubtless, one of the main criteria in the risk and efficiency assessment of every business investment is the tax system existing in the respective country as well as the particular taxation policy. Those are the circumstances that determine not only the risk, but also the efficiency of a certain business investment since the tax (in any of its forms) by default represents a mandatory obligation funded from the company’s resources payable towards the national/common interest.

Going on with our analysis on the resemblance and difference between Bulgaria and Greece and their investment openness in international terms, we must pay attention to the major taxation levels in both these countries since they are the basis of our further work.

Comparison of Taxation levels in Greece and Bulgaria (2013)

Tax/Country Greece Bulgaria
VAT 19 % 20 %
Corporate tax 26 % 10 %
Dividend tax 10 % 5 %
Interest tax 15 % 10 %

Taking into consideration the above stated data it is obvious that Bulgaria provides far more attractive taxation business environment than Greece. This is due to two major factors:

- The Greek crisis – the world economic and financial crisis repercussions in Greece are much more severe and affect much more deeply the local economy, including the taxation system than that happens in Bulgaria.

- Bulgaria’s catching-up process – Bulgaria’s market economy is in a general catching-up process in comparison to the rest developed European countries and that explains the existence of more attractive taxation conditions aiming at higher investments accumulation.

All this turns Bulgaria into a “tax paradise” in comparison to Greece not only to international investors, but also to Greek businessmen themselves that look for better conditions for business development. The evidence supporting this statement is already available since more and more companies (including Greek ones) choose Bulgaria for a final destination of their business projects.

Nonetheless, the optimism and euphoria shouldn’t be too high as Bulgarian national government still has lots of tasks before them – political, economic, social, cultural, ethnic, etc. And that will determine if the state will confirm its already acquired image of a stable and predictable economy with attractive parameters for almost all types of investments.

November 10th, 2013 Posted by RPNAdmin Filed in: Other