Euro Adoption in Bulgaria: Accounting – VAT Checklist (2026)

Euro Adoption in Bulgaria: Accounting & VAT Checklist

Bulgaria adopted the euro on 1 January 2026. For businesses, the “big bang” is not just a currency symbol change—it affects invoices, VAT reporting, POS receipts, payroll, contracts, pricing communication, and how your accounting system stores and rounds values. If you operate a Bulgarian company (or a foreign company with Bulgarian VAT obligations), this guide gives you a practical, accountant-friendly checklist you can execute—without guessing what the tax office expects.

This article is written for foreign founders and international teams running operations in Bulgaria, especially those using a virtual office, outsourcing accounting, or managing cross-border VAT. Use it as your internal compliance roadmap for 2026.

Key Euro Transition Facts Businesses Must Apply

Fixed conversion rate and conversion logic

• Official fixed conversion rate: 1 EUR = 1.95583 BGN (use the full official rate, not a shortened version).
• Conversion method: convert BGN to EUR by dividing by 1.95583.
• Rounding: amounts are typically rounded to 2 decimals in EUR using standard rounding rules; some items (especially payroll-related) may have specific “round in favor of the employee” treatment.

Dual pricing and dual circulation (business impact)

• Dual display period: pricing is shown in both BGN and EUR for a defined transition window (important for storefronts, menus, websites, and invoices/receipts in certain cases).
• Dual circulation: during the initial cash transition period, businesses had to handle payments in both currencies while ensuring correct change and cash handling controls.
• Practical takeaway: even after the first month, dual price communication continues to affect customer-facing documents, price lists, and e-commerce UX.

Accounting System Checklist: Your “Must-Do” Configuration

1) Set EUR as base currency and lock conversion settings

• Confirm your accounting software’s functional/base currency is set to EUR as of 01/01/2026.
• Ensure the system uses the fixed rate for historical conversion where required (and does not pull daily FX rates for BGN/EUR after adoption).
• Lock user permissions so staff cannot manually edit the conversion rate or override euro rounding settings.

2) Define rounding rules across modules

• Sales module: invoice line rounding vs. invoice total rounding (decide and document a consistent approach).
• Purchase module: vendor invoice rounding differences and how your system books rounding variances.
• Cash module: receipt rounding and change handling logic (especially important for POS).
• Payroll: confirm salary conversion rounding is compliant and consistently applied per employee.

3) Re-map chart of accounts and reporting templates

• Update all management reports, dashboards, and KPI packs to present values in EUR.
• Ensure statutory reporting templates (trial balance, P&L, balance sheet) are aligned to EUR output.
• If you consolidate with a parent company: confirm the new local currency doesn’t break consolidation mapping or intercompany matching.

4) Master data sanity check (customers, vendors, products)

• Review customer and vendor records for currency fields, price list assignments, and VAT group logic.
• Rebuild price lists carefully (see pricing section) rather than relying on automatic “convert everything” buttons.
• Confirm product VAT codes and exemptions remain correct—currency change does not change VAT nature, but it can reveal historic coding errors.

VAT Checklist: Invoicing, Returns, VIES, OSS, and Audit Risk

1) Invoicing in EUR: what to change immediately

• Issue invoices in EUR with correct formatting for net amount, VAT amount, and gross total.
• Ensure invoice numbering remains continuous and compliant (currency change must not “restart” sequences unless legally allowed and documented).
• Update invoice templates to show:
  • Seller VAT number and mandatory invoice fields.
  • Correct VAT rate and VAT basis in EUR.
  • Where relevant, dual display totals (if your sector or customer-facing documents require it during the transition window).

2) VAT returns (Bulgaria): currency alignment and reconciliation

• Confirm your VAT return preparation uses EUR values consistently across:
  • Sales ledger (output VAT)
  • Purchase ledger (input VAT)
  • VAT payable/receivable control accounts
• Reconcile monthly:
  • VAT return totals vs. sales/purchase ledgers
  • VAT control account movement vs. filed figures
  • Rounding differences posted to a dedicated rounding variance account (transparent audit trail)

3) Cross-border VAT: VIES, Intrastat, and OSS

• VIES listings: verify your ERP exports in the correct currency and that EU customer VAT numbers validate properly.
• Intrastat: review statistical value rules and whether your submission tool expects EUR fields or needs updated configuration.
• OSS/IOSS: if you use One Stop Shop, ensure your platform/accountant maps sales to the correct member state rates and reports in the correct currency format required by the scheme.

4) Credit notes, deposits, and legacy BGN documents

• Define a policy for correcting or adjusting invoices issued pre-2026 in BGN:
  • How credit notes are issued (in EUR), while referencing the original invoice.
  • How partial refunds and deposit offsets are converted and rounded.
• Train staff to avoid “manual conversion in Excel” for VAT-critical documents; conversions should be system-based and traceable.

Pricing and Customer Communication: Dual Display Done Safely

1) Convert prices strategically, not mechanically

• Don’t blindly convert every price and round “nicely”—this can create margin drift and customer complaints.
• Build a conversion table:
  • Old BGN price
  • Exact EUR converted price (full rate)
  • Rounded EUR selling price
  • Difference and margin impact
• Document the rounding and pricing logic so you can defend it if questioned.

2) Update every channel that shows prices

• Website (product pages, checkout, invoices, email receipts)
• Marketplaces (Amazon/Etsy/other platforms, if applicable)
• In-store signage, menus, printed catalogs
• Contracts and offers that reference amounts

3) POS and fiscal receipts

• Confirm your POS/fiscal device is updated for EUR reporting, VAT display, and compliant receipt layout.
• Test real-life scenarios:
  • Discounts applied at line and at total
  • Returns and partial refunds
  • Split payments (cash + card)

Payroll and HR: Salaries, Benefits, and Employment Docs

1) Salary conversion and payslip output

• Update payroll software currency and rounding settings.
• Confirm net pay, social security, and tax computations remain correct after conversion.
• Ensure payslips show values in EUR and that payroll journals post cleanly into the general ledger.

2) Employment contracts and internal policies

• Update salary clauses and any BGN-denominated allowances (meal vouchers, bonuses, travel budgets, per diems).
• Check internal policies where monetary thresholds exist (approval limits, expense caps, procurement rules).

Banking, Cash, and Treasury Controls

1) Business bank accounts

• Confirm your bank accounts are denominated in EUR and that bank statement imports match your accounting software currency settings.
• Review payment templates (SEPA credit transfers, bulk payments) for correct formatting and beneficiary details.

2) Cash handling and petty cash

• Re-count and re-authorize petty cash floats in EUR.
• Update petty cash policies and require receipts compliant with the new currency display expectations.

Contracts, Share Capital, and Corporate Documents

1) Commercial contracts

• Update BGN amounts in ongoing contracts (service agreements, leases, supplier contracts) to EUR and clarify how conversion/rounding is handled.
• For leases, confirm how indexation, deposits, penalties, and service charges are expressed post-2026.

2) Share capital and Commercial Register compliance

• The Commercial Register converted share capital figures automatically, but companies still need to update their internal corporate documents (Articles of Association / Statutes) to reflect euro capital amounts and share values.
• Plan this as a corporate compliance project in 2026, especially if shareholders are abroad and signatures/notarization may be needed.

Audit-Ready Documentation: What to Keep on File

Build a “Euro Changeover” folder (digital + controlled access)

• Accounting system configuration screenshots/settings export (currency, rounding, VAT logic).
• Price conversion methodology and final price list approvals.
• POS test receipts and end-of-day reports proving EUR/VAT correctness.
• Payroll conversion rules and sample payslips/journal postings.
• Board/management approval notes for key policy changes.
• Staff training notes (who was trained, when, and on what procedures).

Operational Checklist Summary (Copy/Paste for Your Team)

Accounting

• Base currency set to EUR as of 01/01/2026
• Fixed rate locked and documented
• Rounding rules defined across sales/purchases/cash/payroll
• Reports and templates updated to EUR
• Rounding variance account created and monitored

VAT

• Invoice templates updated (EUR + VAT fields)
• VAT return reconciliation process updated (EUR ledger to return)
• VIES/Intrastat/OSS exports tested
• Legacy BGN invoice adjustment policy documented

Pricing & POS

• Price lists rebuilt with margin checks
• Dual display implemented across channels where required
• POS/fiscal devices updated and tested for VAT correctness

Payroll

• Payroll system switched to EUR with compliant rounding
• Employment docs and allowances updated
• Payroll journals posting cleanly to EUR GL

Corporate compliance

• Contracts updated to EUR
• Share capital documents scheduled for update within 2026

What can SofiaOffices do for you?

SofiaOffices helps foreign founders and international companies stay compliant in Bulgaria while keeping operations simple. If euro adoption exposed gaps in your invoicing, VAT logic, payroll setup, or corporate documents, we can handle the entire process end-to-end—so you avoid penalties, rejected filings, and costly “fixes” later.

How we support your euro transition and ongoing compliance

• Accounting in Bulgaria (EUR-ready): monthly bookkeeping, reconciliations, management reporting, and clean audit trails.
• VAT services: VAT registration support, monthly VAT returns, VIES/Intrastat coordination, and cross-border VAT handling.
• Company administration: assistance with updating corporate documentation impacted by euro conversion (including share capital documentation).
• Virtual office and registered address: reliable correspondence handling with Bulgarian institutions, including the NRA.

Related SofiaOffices Resources (Helpful Links)

• Change of Share Capital to Euro in the Commercial Register (2026)
• EORI Registration in Bulgaria (2026): Step-by-Step Guide
• Foreign Employer in Bulgaria: All You Need to Know
• How to Register a Company and Open an Office in Sofia
• EU VAT Rates Guide for 2025: Standard, Special & Reduced
• SAF-T in Bulgaria: What It Is and When It’s Required

Final Notes for 2026: Avoid These Common Mistakes

• Mixing manual and system conversions: this creates inconsistent rounding and breaks audit trails.
• Ignoring “small” rounding differences: they accumulate and distort VAT control accounts over time.
• Forgetting templates: quotes, proformas, recurring invoices, and email receipt layouts often keep old currency labels.
• Not testing POS edge cases: discounts, refunds, split payments, and deposits are where VAT mistakes hide.
• Leaving corporate documents for the last minute: shareholder logistics and notarization can turn “simple” updates into a Q4 emergency.

If you want, SofiaOffices can turn this checklist into a tailored implementation plan for your specific business model (B2B services, e-commerce, hospitality, consulting, or mixed activity) and coordinate accounting + VAT execution with one point of contact.