Yes, the zero corporate tax is a fact in areas with high unemployment in Bulgaria. As per Bulgarian Corporate Income Tax Law companies that carry out manufacturing activities in municipalities where the rate of unemployment for the year preceding the current year is by 35 % or more higher than the national average for the same period can benefit from the so called ‘tax retention’ of up to 100 %.
‘Corporate tax retention’ means that the company is entitled not to remit the amounts of corporate tax due to Bulgarian state budget and has the right to keep the amounts in its company capital and to use them for purposes prescribed by law. Broadly speaking, the retained tax must be invested in fixed assets within four years from the beginning of the year for which the tax is retained.This tax relief can be granted for companies that have made their initial investment after 2006 but not later than 2014.