3 September 20265 min read
Italian SRL profits are taxed at 24% IRES plus IRAP and INPS gestione separata contributions. A Bulgarian EOOD pays 10% corporate tax and 5% on dividends. Here is the full 2026 comparison, including exit tax and CFC rules.
Italian founders pay some of the highest combined business and personal tax in the EU. Between IRES, IRAP, INPS contributions and personal income tax on dividends, an SRL owner drawing profits often gives up close to half of what the company earns. A Bulgarian EOOD taxes the same profit at 10%, then 5% on dividends, for a combined effective burden of 14.5%.
This guide compares the two structures with 2026 rates, then explains the rules that decide whether the Bulgarian company will actually be respected by the Agenzia delle Entrate.
| Item | Italy SRL | Bulgaria EOOD |
|---|---|---|
| Corporate income tax | 24% IRES | 10% |
| Regional production tax | ~3.9% IRAP (varies by region) | none |
| Dividend tax on the owner | 26% substitute tax | 5% withholding |
| Combined on distributed profit | ~48% to 52% | 14.5% |
| Minimum share capital | EUR 1 (SRL semplificata) to EUR 10,000 | BGN 2 (about EUR 1) |
| VAT registration threshold | EUR 85,000 for the forfettario regime, otherwise immediate | BGN 100,000 (about EUR 51,100) |
| Annual accounting cost | EUR 2,000 to EUR 4,000 | EUR 600 to EUR 1,800 |
Italian SRL. IRES at 24% takes EUR 36,000. IRAP at roughly 3.9% on the production value adds around EUR 5,800. That leaves about EUR 108,200. Distributing it triggers the 26% substitute tax on dividends, another EUR 28,100. The founder keeps roughly EUR 80,100, before the INPS gestione separata or artigiani/commercianti contributions that usually apply to an active administrator.
Bulgarian EOOD. Corporate tax at 10% takes EUR 15,000. The remaining EUR 135,000 is distributed with a 5% withholding of EUR 6,750. The founder keeps EUR 128,250, plus a small monthly manager social contribution if they draw a salary in Bulgaria.
The gap on a single year of trading is close to EUR 48,000. Over five years it funds a great deal more than the setup cost.
The 14.5% number is only real if the Bulgarian company is genuinely Bulgarian. Three Italian rules decide that.
If the company is managed and administered from Italy, Italy treats it as Italian tax resident regardless of where it is registered. The test looks at where board decisions are taken, where the administrator lives and works, and where the operational centre sits. An Italian resident running a Bulgarian company from a Milan flat is exposed.
Even with the company outside Italy, controlled foreign company rules can attribute its income back to the Italian shareholder when the effective foreign tax is below half the Italian rate and more than one third of income is passive. Bulgaria's 10% rate sits below the threshold, so the safe harbour depends on demonstrating genuine economic activity: staff, premises, contracts signed locally.
If you transfer an existing Italian business or move tax residence while holding substantial shareholdings, an exit charge on latent capital gains can apply. Structuring a new Bulgarian company for new business is usually far cleaner than migrating an existing SRL.
The practical conclusion for most Italian founders is the same one we give German and French clients: either you relocate personally, or you build real substance in Bulgaria with a local director, an office and staff. See our document checklist and the registered office guide for what substance actually looks like in practice.
Bulgaria applies a flat 10% personal income tax. An Italian founder who moves tax residence, deregisters with AIRE and spends more than 183 days in Bulgaria typically ends up with:
EU freedom of movement means no visa is needed. Registration is an EU residence certificate at the migration directorate, an address, and health insurance registration.
Registering the EOOD takes about five business days once documents are signed. If you cannot travel, a notarised and apostilled power of attorney lets us handle the entire filing. Expect:
Our annual costs breakdown has the full running-cost picture.
If you sell services B2B to Italian companies, the reverse charge applies and you invoice without VAT once you have a validated VIES number. Selling B2C into Italy pulls you into the OSS regime once you pass the EUR 10,000 pan-EU distance selling threshold. Our VAT registration guide explains registration triggers and the monthly filing cycle.
Yes, and many founders do. The usual split is to keep Italian-market work in the SRL and place international clients in the EOOD. The two must trade at arm's length and the Bulgarian entity needs its own substance, otherwise the arrangement risks being unwound.
No. Closing is a separate decision with its own liquidation tax consequences. Talk to your commercialista before winding anything up.
Yes. Bulgaria is an EU member state and issues standard VIES VAT numbers. Payment and invoicing work exactly as they do with a German or Dutch supplier.
Usually seven to ten days from signing: about five business days for the Commercial Register entry, then a bank account. Read the formation timeline for the stage-by-stage detail.
Corporate tax is a flat 10% with no regional surcharge and no IRAP equivalent. The costs people forget are accounting, the registered address and social contributions on a manager salary, all covered in our hidden costs article.
If you want the numbers for your own revenue, run them through our tax calculator, then book a free consultation. We will tell you honestly whether relocation is required in your situation or whether a substance-based structure works.
We've helped 750+ EU founders. Setup in 5 business days, fully remote, English throughout.
Germany's exit tax under §6 AStG catches most founders off guard. The three structures that actually work, the 7-year instalment plan, and how to time the move.
Read articleBulgaria dividend tax in 2026: the 5% individual rate, 10% plus 5% worked example, quarterly filing deadline, EU parent exemption, and cross-border traps.
Read articleSwedish AB profits face 20.6% corporate tax plus 3:12 rules on dividends, and salary can reach 55%. Bulgaria totals 14.5%. The 2026 numbers, exit rules and what has to move.
Read article