On 4th of June 2025, the European Commission announced that Bulgaria is ready to adopt the euro. The announcement follows the release of the 2025 Convergence Report, which stated that Bulgaria met all nominal convergence criteria of the EU – price stability, public finances criterion, exchange rate and convergence of long-term interest rates. Furthermore, the Bulgarian legal framework is in conformity with the requirements of the Treaty on the Functioning of the European Union (TFEU) and the Statute of the European System of Central Banks (ESCB).
According to the European Commission in 2025 Bulgaria’s economy and monetary policy are already closely linked to the euro area due to the introduction of the currency board in 1997 and the participation of the country in the Exchange Rate Mechanism II (ERM II) and the Banking Union since 2020.
As a result, Bulgaria will officially introduce the euro on 1 January 2026 entering a transition period during which Bulgaria will continue the practical preparations to ensure that the public and the private sectors are ready for the changeover.
Since euro is the official currency of 20 out of 27 EU member countries it is expected its adoption will be followed by some key benefits for businesses in various directions, such as:
• The euro adoption will place Bulgaria under the supervision of the European Central Bank (ECB), which will strengthen control over the financial sector and contribute to greater financial stability
• Improvement in access to liquidity and financial support mechanisms for the banking sector. Currently, such mechanisms do not exist in BGN currency, even for foreign banks operating in the country. With the adoption of the euro, banks will gain access to all liquidity instruments of the ECB.
• Significant decrease of foreign exchange risk in cross-border transactions and easier audit and reconciliation processes.
• Faster processing of Bulgarian VAT refunds for foreign companies as result of the adoption.
In parallel, the transitional process is related to additional expenses, difficulties and uncertainties. Considering the main principles of the new legislation that aimed to protect the end customer’s rights and to ensure transparency within the adoption process businesses are currently facing challenges in various aspects, such as converting rules, dual circulation of both currencies, dual display of prices, bank accounts adaptation, financial reporting, taxation and social security.
A key aspect is the currency conversion and rounding rules. Generally, within the transitional period the exchange rate applicable before the adoption (1 EUR : 1.95583 BGN) remains unchanged but at the same time there are some specifics in the rounding rules affecting salaries, compensations, social benefits and pensions.
Further, the new legislation prescribes a mechanism for production, supply and distribution of euro banknotes and coins. At the same time, a set of obligations for the traders is implemented, including but not limited to cash payments and reclamations. There are also limitations related to price increasements of goods / services within the transitional period.
Another key challenge is the requirement for dual display of prices that may lead to practical issues and future disputes. For instance, the regulatory framework does not consider the specifics of physical and online commerce, i.e. both types of commerce are regulated by one and the same regime at present.
From reporting perspective, the account balances in BGN shall be converted into euros in accordance with the rules for conversion and rounding. Additionally, as of the date of introduction of the euro the accounting documentation and reporting shall be made in euros. The annual financial statements shall be prepared in thousands of euros, with the data for the previous reporting period being recalculated in thousands of euros in order to ensure comparability between the current and previous periods. Interim and annual financial statements for periods prior to that date shall be prepared in the currency that is the official currency of the Republic of Bulgaria at the end of the reporting period. All primary and secondary accounting documents, registers, reports, declarations, and other similar documents containing accounting information and reflected in the company’s accounting records prior to the date of the adoption shall not be converted into euros.
Specifics exist regarding tax returns that covers periods prior to the euro adoption but shall be submitted after the adoption, such as VAT / INTRASTAT return for December 2025, FY25 CIT return, WHT return for Q4 FY25 etc. – the latter shall be submitted in BGN, but paid in EUR considering the exchange rate applicable. Additionally, tax refund performed after 1st of Jan 2026 for historical periods before the adoption shall be made in EUR.
With respect to the bank accounts as of 1st of January all such accounts in BGN shall be automatically converted in euro under the exchange rate applicable. The same approach will be followed for recalculation of the bank fees. The existing IBANs will remain unchanged but at the same time there is a risk from lack of account integration between different accounts in euro. In the light of the above, closure of accounts shall be carefully considered due to possible risk of historical account information loss, incl. bank statements / payments.
As of 1st of January 2026 all salaries, compensations, social benefits and pensions shall be paid in euro, considering the rounding rules. Automating conversion of the employees’ salaries in EUR will be performed and no amendments of contractual clauses is required in this regard.
In conclusion, the adoption of the euro in Bulgaria will influence significantly both local businesses and future investors. The full effect of these changes is yet to be assessed in the coming years. That is why the support of local experts and specialists applying individual approach is of high importance for business, especially within the transitional period that follows.
