Corporate Accounting Obligations in Bulgaria

Published on September 30, 2025 and written by Cyril Jarnias

In a rapidly growing economic context, entrepreneurs looking to establish themselves in Bulgaria must pay attention to various legislative aspects that could influence their operations, particularly in accounting. Compliance with accounting obligations is essential not only to ensure financial transparency but also to avoid legal penalties that could prove costly. This article examines the key elements of the framework governing accounting obligations in Bulgaria, highlighting the specific rules that businesses must comply with, whether small structures or large organizations. Through a detailed exploration, we reveal how these regulations shape the business landscape in Bulgaria and influence the strategies of companies operating in this country.

Understanding Accounting Obligations for Businesses in Bulgaria

Accounting Obligations in Bulgaria

Businesses in Bulgaria are subject to strict accounting obligations aimed at ensuring financial transparency and compliance with international standards. These requirements apply to all commercial entities, regardless of their size, although some provisions vary depending on the company’s size.

Mandatory Accounting Books

Bulgarian companies must maintain three main accounting books:

• The journal: chronologically records all financial transactions
• The general ledger: classifies operations by accounting account
• The inventory book: details the company’s assets and liabilities

These documents must be retained for 10 years and must contain no blanks or alterations. They can be maintained in handwritten or electronic form, with the latter option being the most common today.

Applicable Accounting Standards

Bulgarian companies can choose between two accounting frameworks:

• National Accounting Standards (NAS)
• International Financial Reporting Standards (IFRS)

However, listed companies and financial institutions are required to apply IFRS standards. The choice of accounting framework must be disclosed in the annual financial statements.

Record-Keeping Requirements

Companies must maintain up-to-date and accurate accounting. They are required to prepare annual financial statements including:

• A balance sheet
• An income statement
• A cash flow statement
• A statement of changes in equity
• Explanatory notes

Financial Statement Filing Deadlines

Annual accounts must be filed with several institutions:

• National Statistical Institute: via their website
• Tax administration: before June 30 of the following year
• Commercial Register: before September 30 for LLCs and July 31 for other legal forms

Competent Authorities

Accounting regulation in Bulgaria is supervised by several bodies:

• Ministry of Finance: defines accounting policies
• Institute of Certified Public Accountants: regulates the accounting profession
• Public Oversight Commission of Statutory Auditors: supervises auditors

Audit Requirements

Certain companies are subject to mandatory audit of their annual accounts by an independent accountant. This particularly concerns:

• Listed companies
• Financial institutions
• Companies exceeding certain thresholds for turnover, total balance sheet, or number of employees

Impact on Businesses

These accounting obligations have a significant impact on business management in Bulgaria. For small businesses, they can represent a significant administrative burden, often requiring the use of external accounting services. Large companies, on the other hand, must implement robust accounting systems and dedicated teams to ensure their compliance.

Consequences of Non-Compliance

Non-compliance with accounting obligations can lead to heavy penalties for Bulgarian companies, including:

• Substantial financial fines
• Legal proceedings against managers
• Suspension or removal from the Commercial Register
• Difficulties in obtaining financing or public contracts

These measures highlight the importance for companies to take their accounting obligations seriously and ensure they have the necessary resources to comply scrupulously.

Legal Requirements for Financial Reporting

Overview of the Legal Accounting Framework in Bulgaria

Bulgaria has an accounting regulatory framework aligned with European standards. The Bulgarian Accounting Act constitutes the central pillar of this regulation, complemented by European Union directives on financial reporting. This framework aims to ensure transparency and comparability of financial information for companies operating in Bulgarian territory.

Applicable Accounting Standards

Bulgarian companies must comply with specific accounting standards according to their size and status:

• Listed companies, financial institutions, and large enterprises are required to apply International Financial Reporting Standards (IFRS) in their entirety.
• Small and medium-sized enterprises (SMEs) can choose between IFRS and Bulgarian National Accounting Standards (NAS), which are largely aligned with IFRS but offer simplifications.

Periodic Reporting Obligations

All Bulgarian companies must close their accounting year on December 31 and are subject to annual reporting obligations:

• Preparation of annual financial statements including balance sheet, income statement, cash flow statement, statement of changes in equity, and accompanying notes.
• Filing of annual accounts with the Commercial Register before September 30 of the following year.
• Large companies and public interest entities must have their accounts audited by a certified auditor.

Specific Requirements Based on Company Size

Obligations vary according to company category:

• Micro-enterprises benefit from a simplified regime with streamlined financial statements.
• SMEs can opt for reduced notes and are exempt from certain publication obligations.
• Large companies and public interest entities are subject to the strictest requirements, particularly regarding audit and publication of non-financial information.

Penalties for Non-Compliance

Non-compliance with financial reporting obligations can lead to significant penalties:

• Fines ranging from 200 to 3000 BGN for responsible individuals.
• Penalties for companies can reach 0.5% of net turnover, with a minimum of 200 BGN.
• In case of recurrence, these amounts can be doubled.

Challenges and Common Practices

Bulgarian companies face several challenges in complying with these requirements:

• Adapting to frequent changes in IFRS standards, requiring continuous training of accounting staff.
• Complexity of valuations required by IFRS, particularly for financial assets and impairment testing.
• Managing tight deadlines for preparing and filing annual accounts, especially for SMEs with limited resources.

To overcome these difficulties, many Bulgarian companies turn to specialized accounting firms or invest in advanced financial management software to automate part of the reporting process.

Accounting Standards Applicable to Bulgarian Companies

Accounting Standards in Bulgaria

In Bulgaria, companies must comply with specific accounting standards for the preparation and presentation of their financial statements. The country has implemented a dual system, combining National Accounting Standards (NAS) and International Financial Reporting Standards (IFRS).

National Accounting Standards (NAS)

NAS, also known as Bulgarian Accounting Standards (BAS), constitute the main accounting framework for the majority of Bulgarian companies. These standards are developed by the Bulgarian Ministry of Finance and are largely harmonized with IFRS, while taking into account the country’s economic and legal specificities.

IFRS Adoption

Since 2003, Bulgaria has gradually adopted IFRS for certain categories of companies. Mandatory application of IFRS mainly concerns public interest entities, such as:

• Listed companies
• Financial institutions (banks, insurance companies)
• Pension funds and companies managing them
• State-owned enterprises of national importance
• Large companies exceeding certain thresholds

Criteria for Standard Application

Company size is a determining factor in choosing which accounting standards to apply. The criteria are as follows:

– Large companies: total balance sheet exceeding 8 million BGN, net turnover exceeding 15 million BGN, or average number of employees exceeding 250. – Medium-sized companies: total balance sheet up to 8 million BGN, net turnover up to 15 million BGN, and average number of employees up to 250. – Small companies: total balance sheet up to 1.5 million BGN, net turnover up to 2.5 million BGN, and average number of employees up to 50.

Large companies and public interest entities are required to apply IFRS, while small and medium-sized enterprises can choose between NAS and IFRS.

Regulatory Framework and Competent Authorities

The accounting regulatory framework in Bulgaria is primarily governed by the Accounting Act. This law defines requirements for accounting maintenance, financial statement preparation, and audit.

The main authorities responsible for developing and supervising accounting standards are:

– Ministry of Finance: responsible for developing and updating NAS. – Financial Supervision Commission: supervises standard application for public interest entities. – Institute of Certified Public Accountants of Bulgaria: contributes to the development of accounting and audit practices.

Implications for Bulgarian Companies

The application of these accounting standards has significant implications for Bulgarian companies:

– Improved financial transparency: the use of IFRS for large companies and public interest entities promotes greater transparency and comparability of financial information at the international level.

– Increased complexity for some companies: small and medium-sized enterprises may face challenges in applying NAS or IFRS, sometimes requiring more advanced accounting expertise.

– Attractiveness to foreign investors: alignment with international standards makes Bulgarian companies more attractive to foreign investors, facilitating access to international capital markets.

– Compliance costs: compliance with these standards may result in additional costs, particularly in terms of staff training and updating information systems.

The adoption of these accounting standards contributes to the harmonization of Bulgarian financial practices with those of the European Union, thereby strengthening the country’s economic integration and competitiveness on the international stage.