On January 1, 2026, Bulgaria adopted the euro as its official currency, following the positive assessment contained in the Convergence Report 2025 by the European Commission and the European Central Bank, within the framework of Article 140 of the Treaty on the Functioning of the European Union (TFEU). With this, Bulgaria fully integrates into the Economic and Monetary Union (EMU) and becomes part of the Eurosystem.
The replacement of the Bulgarian lev (BGN) with the euro is not merely a formal change of legal tender, but also entails automatic legal effects on contracts, accounting systems, financial structures, and cross-border operations.
The adoption of the euro is governed by primary and secondary European Union law, in particular:
- Article 140 TFEU.
- Regulation (EC) No 974/98 on the introduction of the euro.
- Regulation (EC) No 1103/97 on certain provisions relating to the introduction of the euro.
- National adaptation legislation adopted by Bulgaria to regulate the transitional period.
The conversion rate was irrevocably fixed at 1 EUR = 1.95583 BGN. In accordance with the principle of continuity of contract (Article 3 of Regulation 1103/97), the introduction of the euro does not in itself alter the validity of contracts nor constitute grounds for termination, modification, or breach.
This principle is particularly relevant in:
- Long-term supply contracts.
- Financing and loans.
- Finance leases.
- Intragroup framework agreements.
- Agreements with currency revision clauses.
With the irrevocable fixing of the conversion rate, the risk of exchange rate fluctuations in transactions between Bulgaria and other euro area Member States disappears.
From an accounting and reporting perspective:
- Conversion differences in consolidation are eliminated (IAS 21 / equivalent local accounting standards).
- The need for hedging instruments associated with NGB/EUR transactions disappears.
- Volatility in consolidated financial statements is reduced.
- The valuation of assets and liabilities previously denominated in NGB is simplified.
For international groups, this can have a direct impact on financial ratios, bank covenants, and internal risk management policies.
The transition requires:
- Updating accounting and ERP systems.
- Reconfiguration of base currencies in subsidiaries.
- Review of internal treasury policies.
- Adjustments to consolidated financial reporting.
Furthermore, during the dual circulation period, it is essential to ensure consistency in invoicing, rounding, and conversion in accordance with applicable European regulations.
The adoption of the euro does not modify the substantive tax framework, but it can generate technical effects on:
- Historical tax bases expressed in NGB.
- Accounting adjustments with tax implications.
- Transfer pricing documentation.
- Structures with permanent establishments.
In multinational groups, currency harmonization can facilitate consistency between local tax reporting and group consolidation, reducing discrepancies arising from conversion differences.
How can Feliu N&I help you?
If your company already operates in Bulgaria or is considering doing so, we will provide close and structured support throughout the entire process, ensuring that the transition to the euro and any implementation project are managed with security and a strategic vision.
In implementation or expansion projects, it is crucial to properly define the entry strategy, the most efficient corporate and operational structure, and the articulation of intragroup relationships, taking into account the new monetary environment and its impact on treasury management, invoicing, and consolidated reporting.
Our goal is to enable you to make informed decisions and execute your international strategy with security and efficiency.
