What Happened on January 1, 2026
Bulgaria officially adopted the euro on January 1, 2026, at the irrevocable fixed exchange rate of 1 EUR = 1.95583 BGN. This was not a gradual transition. On December 31, 2025, Bulgaria operated in levs; on January 1, 2026, the entire economy switched to euros.
For anyone running a business in Bulgaria — or considering starting one — this change affects virtually everything: your bank accounts, tax filings, social security contributions, VAT obligations, share capital, employment contracts, and accounting. This guide covers each area in detail.
Bank Accounts: Automatic Conversion
All BGN bank accounts in Bulgaria were automatically converted to EUR accounts overnight on January 1, 2026. Here is what happened and what it means for you:
- Conversion was automatic. You did not need to take any action. Every BGN balance was converted to EUR at the fixed rate of 1 EUR = 1.95583 BGN.
- IBANs remained unchanged. Your Bulgarian IBAN (starting with BG) stayed exactly the same. No need to update your IBAN with clients, suppliers, or payment providers.
- No conversion fees. Banks were prohibited from charging any fees for the automatic BGN-to-EUR conversion.
- New accounts are in EUR. Any bank account opened after January 1, 2026, is denominated directly in euros.
- Full SEPA participation. Bulgaria is now a full member of the Single Euro Payments Area (SEPA). Euro transfers to and from any of the 36 SEPA countries are processed as domestic transfers — typically settling within one business day at standard domestic fees.
Practical impact: If you run a business serving European clients, SEPA membership is transformative. Your Bulgarian bank account now works exactly like a German, Dutch, or French bank account for euro transfers. No more FX fees, no more "international transfer" surcharges, no more 2-3 day settlement times for cross-border payments.
Cash: Dual Circulation and Exchange
The transition from BGN cash to EUR cash followed a strict timeline:
| Period | What Applied |
|---|---|
| Jan 1 - Jan 31, 2026 | Dual circulation: both euro and lev cash accepted for all payments. Change given in euros only. |
| Feb 1, 2026 onwards | Euro is the sole legal tender for cash payments. BGN cash is no longer accepted by merchants. |
| Until Jun 30, 2026 | Commercial banks exchange BGN banknotes and coins to EUR free of charge. |
| After Jun 30, 2026 | The Bulgarian National Bank (BNB) continues to exchange BGN banknotes and coins indefinitely at no cost. |
Important timing: The dual circulation period ended on January 31, 2026 — not June 30 as some sources incorrectly report. June 30 is the deadline for free exchange at commercial banks, not for dual circulation. If you still have BGN cash, you can exchange it at any commercial bank until June 30, 2026, or at the BNB indefinitely after that.
Tax Declarations: EUR from 2026
The currency for tax filings follows a straightforward rule based on the tax year:
- 2025 annual tax returns (filed in early 2026): Filed in BGN, because the 2025 tax year occurred entirely before euro adoption.
- 2026 tax declarations and onwards: Filed in EUR. This includes monthly VAT returns, advance corporate tax payments, personal income tax returns, and all other filings to the National Revenue Agency (NRA).
- Tax payments: All tax payments from January 1, 2026, are in EUR. The NRA's bank accounts accept euro transfers via SEPA.
The tax rates themselves did not change with euro adoption. Bulgaria maintains its 10% flat corporate income tax and 5% dividend withholding tax, for a combined effective rate of 15% when distributing profits to individuals. Personal income tax remains at 10%.
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Get Free Tax Consultation →Social Security Thresholds in EUR
Social security contribution thresholds for 2026 have been converted from BGN to EUR. These are transitional amounts based on the fixed exchange rate:
| Threshold | 2026 Amount (EUR) | Notes |
|---|---|---|
| Minimum insurable income | EUR 550.66 / month | Transitional amount; applies to all insured persons including self-insured EOOD owner-managers |
| Maximum insurable income | EUR 2,111.64 / month | No social security contributions are due on income above this ceiling |
For self-insured persons (including EOOD owner-managers who pay themselves via the self-insurance route), you must insure on at least the minimum monthly insurable income of EUR 550.66. The contribution rates remain the same as before euro adoption — only the currency changed.
VAT Threshold: EUR 51,130 and Calendar Year Change
The mandatory VAT registration threshold is EUR 51,130 in taxable turnover. But there is an important structural change beyond the currency conversion:
- Calendar year basis. From 2026, the VAT threshold is measured on a calendar year basis (January 1 to December 31) rather than the previous rolling 12-month period. This is a significant simplification.
- Registration deadline. If your taxable turnover exceeds EUR 51,130 in a calendar year, you must apply for VAT registration within 7 days of exceeding the threshold.
- Voluntary registration. You can still register for VAT voluntarily at any time, regardless of turnover. This is often beneficial if your clients are VAT-registered businesses (they can reclaim the VAT you charge).
Practical note: The calendar year change means your VAT obligation resets on January 1 each year. Under the old system, you had to track a rolling 12-month window, which was more complex. The new system is simpler but means you could theoretically reach the threshold faster if your revenue is concentrated in the early months of the year.
Share Capital Redenomination
All Bulgarian companies must redenominate their share capital from BGN to EUR during 2026. This is mandatory — not optional. Here is how it works:
- Timing: The redenomination must be done with your first application to the Trade Registry in 2026. It does not require a separate filing — it is included as part of whatever your first filing happens to be (annual financial statements, change of address, etc.).
- Conversion rate: The fixed rate of 1 EUR = 1.95583 BGN applies. Share values are rounded to the nearest euro cent.
- Minimum share capital: The minimum share capital for a limited liability company (OOD/EOOD) becomes EUR 1 (converted from the previous BGN 2 minimum).
- Rounding adjustment: If rounding creates a small discrepancy between the sum of individual shares and the total capital, the company may adjust by up to +/- 5% without triggering additional capital increase or decrease procedures.
- No state fees. The Trade Registry does not charge fees for the redenomination filing itself.
- Companies registered in 2026: If you register a new company in 2026, your capital is stated directly in EUR from the start. No redenomination is needed.
Do not forget this. The redenomination is mandatory and the Trade Registry will reject other filings if you have not completed it. If your company makes no other filings in 2026, you should file the redenomination as a standalone application. Your accountant or lawyer should handle this as part of the annual compliance process.
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Under Bulgaria's euro adoption legislation, all references to BGN in existing contracts are automatically converted to EUR at the fixed rate of 1 EUR = 1.95583 BGN. This happens by operation of law — you do not need to sign amendments, addenda, or new contracts.
What this means in practice:
- Employment contracts: Salaries stated in BGN are automatically read as the EUR equivalent. An employee earning BGN 3,000/month now earns EUR 1,533.88/month. No amendment is needed.
- Commercial contracts: Prices, payment terms, and any other BGN amounts are converted automatically. A contract for BGN 10,000 is now a contract for EUR 5,112.92.
- Leases: Rent amounts in BGN are converted to EUR. No landlord or tenant action required.
- Loans: Outstanding loan balances, interest rates, and payment schedules denominated in BGN are converted to EUR.
While not legally required, it is good practice to issue updated contracts or addenda reflecting the new EUR amounts — particularly for employment contracts, where clarity about the exact monthly salary in EUR avoids confusion. Most well-organized companies did this in January 2026.
Accounting: EUR Functional Currency
From January 1, 2026, the functional currency for all accounting in Bulgaria is the euro. This affects:
- Financial statements: Annual financial statements for the year 2026 are prepared in EUR.
- Bookkeeping: All journal entries from January 1, 2026, are recorded in EUR.
- Opening balances: The closing BGN balances from December 31, 2025, were converted to EUR opening balances at the fixed rate.
- Invoicing: All invoices issued from January 1, 2026, must state amounts in EUR.
- Dual display: During 2026, some businesses voluntarily show both EUR and BGN equivalents on invoices and financial documents for clarity, though this is not mandatory.
For foreign entrepreneurs: If you were already thinking in euros and converting to BGN for compliance, the euro adoption eliminates that friction entirely. Your accounting, your bank account, your tax filings, and your contracts are all now in the same currency you probably use in your personal finances. This is a genuine simplification.
SEPA and Eurozone Benefits
Beyond the currency change itself, Bulgaria's eurozone membership brings structural advantages for businesses:
- SEPA transfers are domestic. Sending EUR from your Bulgarian bank to a client in Germany, France, or any of the 36 SEPA countries is now a domestic transfer — same speed, same low fees as sending to another Bulgarian bank.
- No more FX risk. If your revenue is in euros (as is common for service businesses with European clients), there is no longer any currency conversion involved. Revenue, expenses, taxes, and salaries are all in the same currency.
- Easier for European clients. Paying a Bulgarian company is now exactly the same as paying a company in any other eurozone country. This removes a psychological barrier for some clients who were hesitant about paying in an "exotic" currency.
- ECB supervision. Bulgarian banks are now supervised by the European Central Bank, adding an additional layer of stability and oversight.
- Deposit guarantee. The EU Deposit Guarantee Scheme protects deposits up to EUR 100,000 per person per bank — the same standard as every other eurozone country.
What Changed for Your EOOD: Practical Checklist
If you own a Bulgarian EOOD, here is what you need to verify or action in 2026:
- Bank accounts. Verify your accounts were converted correctly. Check that your IBAN is unchanged and your online banking shows EUR balances. No action needed — just verify.
- Share capital redenomination. File the redenomination with your first Trade Registry application in 2026. Your lawyer or accountant should handle this. No state fees apply.
- Update employment contracts. While not legally required, issue addenda to employment contracts reflecting the EUR salary amounts. Good practice for clarity.
- VAT returns in EUR. If VAT-registered, ensure your monthly VAT returns are filed in EUR from January 2026 onwards. Your accountant handles this.
- Advance CIT payments in EUR. If you make advance corporate income tax payments, these are now in EUR. Verify with your accountant that the amounts are correctly converted.
- Social security contributions. Verify that your monthly social security declarations and payments use the EUR thresholds (minimum EUR 550.66, maximum EUR 2,111.64).
- Update invoicing. All invoices from January 1, 2026 must be in EUR. If you use invoicing software, verify it has been switched to EUR.
- Update client payment details. While your IBAN has not changed, inform international clients that your account is now a EUR account in the SEPA zone. Some clients may update their payment templates accordingly.
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Disclaimer: This article provides general guidance on the impact of Bulgaria's euro adoption on business and taxation, based on legislation in force as of April 2026. Tax rules, thresholds, and social security contributions are subject to annual changes. This article does not constitute legal, tax, or financial advice. For personalized guidance, consult a qualified Bulgarian tax advisor or lawyer. Last updated: April 7, 2026.