The arithmetic, figure by figure
What is compared is the same thing: a profit of €100, distributed in full, including what the shareholder pays on it.
| Bulgaria | Cyprus, non-dom | Cyprus, domiciled | |
|---|---|---|---|
| Corporate tax | 10 % | 15 % | 15 % |
| On the distribution | 5 % dividend tax | no special contribution | 5 % special contribution |
| GHS | — | 2.65 % | 2.65 % |
| Total burden | 14.50 % | 17.25 % | 21.39 % |
| Net from €100 | €85.50 | €82.75 | €78.61 |
The correction: Bulgaria did not raise its dividend tax
The draft Bulgarian 2026 budget contained an increase in dividend tax from 5 % to 10 %. Several reports from November 2025 present it as adopted.
It was not enacted. For 2026, 5 % still applies.
That changes the arithmetic considerably: at 10 % dividend tax Bulgaria would be at 19.00 % and therefore above Cyprus with non-dom. At 5 % it is below. Anyone reading an overview from late autumn 2025 may be reading the wrong half of this story.
What you pay more for in Cyprus
Four things the rate comparison does not capture.
The treaty network. Cyprus has a considerably larger network of double tax treaties than Bulgaria. That counts as soon as holdings, royalties or interest run across several countries.
Non-dom status. It exempts passive income from the special contribution, that is interest, rents and foreign dividends, for seventeen years. Anyone with investment income alongside business profit calculates differently here. See the guide to non-dom status.
The IP box. Profits from software and patents are 80 % exempt, leaving an effective 3 %. That beats 14.5 % by a long way, but only if the development actually takes place there. See the guide to the IP box.
The language of the legal system. In Cyprus, contracts, register extracts and accounts run in English. That is not a tax advantage and is often the bigger one day to day.
When which country
Bulgaria, when the business is simple: services, customers in the EU, profit distributed, no significant intellectual property, no passive income. Then 14.5 % is simply less than 17.25 %, and there is no reason to pay more.
Cyprus, when one of these applies: software or patents carry the profit; investment income sits alongside the business; several countries are involved; or the working language of the legal system is a practical criterion.
What we could not substantiate
- The exact number of treaties on each side. That Cyprus’s network is larger is generally described. We did not prepare a current head-to-head count for this article.
- The Bulgarian budget position for 2026. One source writes that because of early elections the 2025 budget was extended into 2026; another names a 2026 budget law in the state gazette of 31 July 2026. Both accounts end at 5 % dividend tax; the route there remains unclear.
- Bulgarian employer contributions. For a complete location comparison they belong in it; we did not gather them.
- Cost of living and rents. For Cyprus we have figures, for Bulgaria we do not. The difference is likely to be substantial and to overshadow the tax difference.
Which country fits your case is not decided by anyone from a table: Cyprus setup from one place.
What we offer for this, and what we do not
Volk Accountant does Cyprus bookkeeping: VAT 4, VIES, Cyprus rates, Cyprus deadlines. For a Bulgarian company it is the wrong tool, and we would rather say so up front than after the first invoice.
If Cyprus is the choice, the filings arise from the same books: VAT 4 and VIES, plus the tax estimate at the rate that has applied since 2026.
What a Cyprus company really costs, including rent, is in the guide to the cost of a Cyprus company.