January 2026 / Bulgaria

Following the adoption of the euro, in force as of 1 January 2026, the Bulgarian authorities have introduced tax amendments aimed at aligning the corporate income tax framework with the new currency environment and clarifying certain application aspects of the global minimum tax regime (Pillar Two).

The draft law primarily provides for technical and formal amendments to the tax legislation, including the replacement of references to the Bulgarian lev with the euro and updates to the exchange rate rules, now based on the official rates published by the Bulgarian National Bank. These changes are intended to ensure the correct determination of tax bases and tax amounts under the new monetary framework.

With regard to Pillar Two, the proposal introduces editorial and technical clarifications concerning the top-up tax and the domestic top-up tax applicable to multinational groups and large domestic groups, clarifying the scope of application of the regime, the coordination between the different tax instruments and certain key concepts, in line with the OECD Model Rules.

In parallel, the Bulgarian tax authorities have announced operational initiatives to support affected taxpayers, including a dedicated section on their official website and updated forms required for the management of double tax treaties, in force as of 1 January 2026.

Following the adoption of the euro as Bulgaria’s official currency as of 1 January 2026, the Bulgarian tax authorities have issued clarifications on the management of tax and social security obligations during the transition phase.

It has been confirmed that all tax and social security payments must be made exclusively in euro, including during the dual-currency circulation period currently in place until 31 January 2026, as payments to the tax authorities are processed on a cashless basis only.

For reporting purposes, amounts relating to periods up to 31 December 2025 continue to be declared in Bulgarian lev, while amounts relating to subsequent periods are denominated in euro, regardless of the filing date.

Tax liabilities and credits existing at the end of 2025 have been automatically converted into euro in taxpayers’ accounts, in accordance with the applicable conversion rules. Additional guidance has also been provided on the impact of the currency change on electronic services, refunds and the calculation of late-payment interest; the statutory interest rate applicable for the first half of 2026 has been set at 10.15%.

Pending the approval of the 2026 Budget,  the income thresholds for social security contribution purposes, currently considered for indicative purposes only, are set at EUR 550.66 (minimum) and EUR 2,111.64 (maximum), subject to possible subsequent changes.

With the introduction of the euro, in force as of 1 January 2026, one of the most significant financial changes for Bulgarian businesses in recent decades is underway. This transition has required the adjustment of systems, internal policies, documents and processes. The transition has taken on not only a technical, but also an organizational dimension, requiring clear and effective communication.

Key Deadlines

• 8 August 2025: start of the mandatory dual price display period in lev and euro.
• 1 January 2026: official introduction of the euro and payment of salaries and invoices exclusively in euro.
• 1 to 31 January 2026: period of parallel circulation of lev and euro cash.
• 8 August 2026: end of the dual price display requirement.

Internal Organization and Key Roles

The transition phase requires coordinated involvement across the main corporate departments:

• Human Resources: ongoing management of communication with employees, updating internal policies and supporting the conversion of remuneration.
• Accounting: recalculating salaries and account balances, preparing financial statements in euro, and ensuring the correct functioning of accounting systems.
• IT: adapting and testing software systems, including payroll, accounting, ERP, and POS systems.

Company management is responsible for overseeing the process and defining an appropriate communication strategy.

Technological Adaptation and Conversion

All systems must be configured to operate in euro using the fixed exchange rate of 1 EUR = 1.95583 BGN and to correctly apply rounding rules, particularly with regard to salaries. System testing and verification activities have represented a key step in the transition process in order to avoid operational errors in 2026. Employment contracts remain valid without the need for amendments. Salaries for December 2025 were paid in lev, while salaries from January 2026 onward are paid in euro. The 2025 financial statements remain prepared in lev and were converted into euro as of 1 January 2026.

Communication and Risks

Transparent communication with employees continues to be essential in order to reduce uncertainty and concerns related to the currency conversion. Any issues arising during the transition phase may result in calculation errors, reporting issues and operational risks, even in the absence of specific penalties.