From Lev to Euro (EuroSwitch): Is your business prepared?

On 8 July 2025, the Council of the European Union officially approved Bulgaria's admission to the Eurozone, and the country will adopt the euro from 1 January 2026. Bulgaria thus becomes the 21st member state of the Eurozone.

The transition from the lev to the euro is a strategically important step for businesses and requires timely preparation. It should include analysis and implementation of key actions related to ensuring compliance with the new legal, tax, accounting and payroll requirements, as well as adapting the information systems used in the companies' operations.

How can EY help?

Ensure Regulatory Compliance

• Conduct a dedicated technical workshop for client’s personnel, offering an overview of the key accounting, reporting, tax, payroll, and legal aspects of the Euro transition process. The workshop will also include a Q&A session to address client-specific questions. The workshop duration can be customized to meet the client’s needs (e.g., 2–4 hours). 

• Provide on-call advisory services in response to specific queries related to accounting, reporting, tax, payroll, and legal matters. 

Support Operational Activities

• Perform a comprehensive gap analysis to assess client’s readiness for the Euro transition process. This includes identifying discrepancies between current practices and the requirements for successful euro adoption across key areas such as accounting, financial reporting, IT systems, tax, payroll, and legal compliance. 

• Evaluate existing internal policies, procedures, contracts, and system capabilities to pinpoint areas requiring updates or adjustments. 

• Create detailed operational plan tailored to client’s business specifics with steps, timeline, resources, and milestones for the successful completion of the Euro conversion process. 

• For clients that have already developed Euro conversion operational plans, EY can conduct an independent review to assess completeness and effectiveness, identify potential gaps, and provide tailored recommendations for improvement. 

Support Implementation Process

EY offers hands-on support to assist clients throughout the implementation phase of the euro conversion process, ensuring a smooth and compliant transition. Our services may include: 

• Assistance with Accounting and Reporting 

-          Provide support with the initial conversion of general ledger opening balances as of 1 January 2026; 

-          Provide guidance for accurate accounting treatment during the transition period - including the proper posting of invoices and recognition of foreign exchange differences. 

-          Assist in the preparation of the first euro-denominated financial statements, including restatement of comparative information, and support the update of accounting policies and disclosures to reflect the euro adoption. 

• Assistance with tax matters

-          Assistance with adapting and testing information systems regarding tax returns and tax documents 

-          Conducting employee training on company-specific tax issues

-          Advice on the tax implications of dual pricing 

-          Assistance in compiling tax and social securities documents and declarations or review of already compiled ones

-          Advice and review of compliance with current changes in fiscal receipt/system receipt requirements 

-          Analysis of tax implications related to exchange rate differences and vouchers for previous periods 

-          Comments on the rules for paying state and municipal taxes and fees, as well as social and health insurance contributions 

-          Assistance with necessary adjustments related to tax returns for previous periods 

-          Assistance with objections and requests for reimbursement of unduly paid taxes and social security contributions from the National Revenue Agency, relating to periods before the introduction of the euro 

-          Assistance with other specific tax issues arising from the adoption of the euro as the official currency in the Republic of Bulgaria 

• Legal assistance:

-          Assistance for the conversion of the capital, amendment of the incorporation documents /statutes, Articles of Associations, Incorporation deeds etc./ and record in the Commercial registry.

-          Advice and assistance with compliance with price labels and communication in order to avoid sanctions from the regulators Commission for Consumer Protection (CCP) and the Commission for Protection of Competition (CPC) for misleading, etc. This includes alignment of General Terms and Conditions, communication on websites and platforms, advertising communication, advice on proper planning of advertising activities coinciding during and after the introduction of the euro, preliminary trainings of marketing departments, etc.

-          Review and analysis of documentation and rules related to the remuneration of workers and employees, identification of necessary changes related to the introduction of the new currency, amendment of the internal rules on the structure and organization of the salary, etc.

-          Review and analysis of existing fundings and commercial contracts with suppliers and customers, with a view to the impact on the existing agreements and possible negative consequences or amendments related to changes in payments in euros, adaptation and amendments, if necessary, etc.

• Payroll assistance 

-          Training and guidance for the team involved in payroll and human resources administration processes on the rounding rules applicable to different elements of remuneration, specifics in cross-border situations, payroll-related reporting requirements and the preparation of payroll documentation following the adoption of the euro.

-          Ongoing support and advice on payroll-specific questions during the implementation period.

•   Project Management Support  

-          Assist in coordinating internal and external stakeholders, tracking key milestones, and ensuring timely execution of Euro conversion process in alignment with the client’s operational plan.