On 13 December 2022, the legislation with regard to windfall tax for the fossil fuel sector was gazetted. The new tax applies to companies engaged in the crude petroleum, natural gas, coal and refinery sectors. The windfall tax takes the form of a temporary solidarity contribution of 33% and applies to excess profits generated by EU companies and permanent establishments with activities falling within the scope of the tax.
The contribution will be calculated on the basis of taxable profits, for 2022 and 2023, above a 20% increase in the average taxable profits for the tax periods 2018, 2019, 2020 and 2021, as determined under the Corporate Income Tax Act. The deadline for payment of the temporary solidarity contribution will be the same as the deadline for payment of the annual corporate income tax, i.e. not later than 30 June of the year following the tax year.
The new legislation is in line with Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices.
The full text of the new legislation on the windfall tax was included in the additional provisions to the amendments to the Corporate Income Tax Act and is available here (in Bulgarian only), effective from 8 October 2022.