Romania Crypto Tax

Cryptocurrencies are not considered legal tender in Romania, and the tax authorities have not yet published detailed guidelines on the taxation of cryptocurrencies. At this time, crypto activities carried out in/to Romania are taxed under the general rules of taxation, which is quite friendly for small and innovative businesses and harmonized with EU regulations.

Taxes in Romania are managed through the National Agency for Fiscal Administration. In the case of crypto, entrepreneurs recently have begun to be more closely eyed by the relevant authority in terms of ensuring conformity with national tax legislation requirements. Different crypto-related investment activities include trading, mining, and staking; declarations of revenues obtained by means of this kind of activity have been subject to repeated inspections. Thus, you should give more serious thought to your liabilities related to taxes before planning to carry out any kind of crypto-related economic activity in Romania.

Corporate Income Tax

Under Article 116(1) of Law 227/2015 regarding the Fiscal Code, income obtained from cryptoasset exchanges represents income from other sources. The basic Corporate Income Tax rate is 16%. The fiscal year is the calendar year and it starts from the 1st of January until the 31st of December. However, the taxpayers are allowed to use an alternative financial year instead of the calendar year and for them, the taxation year would match the fiscal year.

The following shall, as a rule, be liable to Corporate Income Tax:

1. Romanian companies
2. Non-Romanian companies carrying on economic activities through one or more permanent establishments in Romania
3. Non-Romanian companies whose place of effective management is in Romania
4. Companies set up under the law of any of the European states and whose registered headquarters are in Romania
5. The foreign companies making profits from the transfer of ownership or other rights over real estate located within Romania

However, regardless of its form, the following crypto activities are generally exempt from paying taxes, namely:

• Obtaining crypto-assets in return for leu or euros
• The holding of crypto-assets
• Transfers of crypto-assets between wallets owned by the same owner

Small enterprises are eligible to apply the microenterprise regime, having an income tax rate of 1%. For a Romanian company to fall under the respective regime, the following conditions have to be fulfilled as of the 31st of December of the previous year:

• Sourced revenues not in excess of the Romanian leu equivalent of 500,000 EUR;
• At least 80% of the total revenues are sourced from other than consulting and management activities
• At least one full-time employee or management contract with at least the minimum gross salary, with the exception of newly founded companies, which may enjoy an additional 30 days from the date of registration of the business to comply with this condition. The company is not in dissolution stage, followed by liquidation, registered at the Trade Registry or the courts.
• Associates/shareholders that hold more than 25% of the value/number of participation titles or voting rights, in no more than three Romanian micro-companies
• The share capital is owned by persons other than the state or administrative divisions

Tax Incentives for Innovation

Romania is innovation-friendly, and this can be seen in tax incentives that crypto entrepreneurs also can take advantage of once their activities meet certain conditions.

According to the Romanian Fiscal Code, the reinvested profit in technological equipment assets used for performing the following activities will be exempt from the Corporate Income Tax:

• Activities of productions, processing, and refurbishing
• Electronic computers and peripheral equipment
• Cash registers and machinery and control and invoicing machinery and devices
• Software produced and or acquired, including under financial leasing contracts, used for implementing economic activities

This also means that businesses can claim a deduction for 50% of the qualifying expenses incurred by their R&D activities. Besides this, businesses can also claim accelerated depreciation of such devices and equipment used for performing the R&D activity. In claiming this, such activities of applicative research and/or technological development are thereby performed in Romania or within any other EU/EEA state.

Value-Added Tax

In Romania, the standard VAT rate is 19%. It outworks on the products and services sold within Romania. Crypto companies can also be obliged to pay VAT, depending on the specificities of economic crypto activities. A company should be registered for VAT within 10 days of the end of the month in which a business becomes liable for payments of VAT.

If a crypto company is established in another EU country and sells its products and services to consumers in Romania, the VAT registration threshold would be 118,000 RON (approx. 23,957 EUR) per year. For other foreign businesses, no threshold applies.

Because Romania is a member of the EU, for VAT purposes, digital currencies are also considered fiat money. The Court of Justice of the European Union observed back in 2015 that Bitcoin transactions are exempt from VAT in accordance with a provision concerning transactions relating to currency, banknotes and coins used as legal tender.

Capital Gains Tax

Romania does not provide for a specific Capital Gains Tax, and capital gains obtained from the transfer of cryptoassets are taxable as Individual Income Tax at a rate of 10% when such capital gains exceed the annual threshold of 600 RON (approx. 122 EUR). The taxable amount shall be calculated based on the difference between the sale price and the acquisition price of the cryptoassets. Transaction fees in connection with the crypto sale are tax-deductible.

Withholding Tax

Dividends distributed between companies, both Romanian residents and non-residents, are subject to taxation at 8%. Dividend tax is exempted if there is a participation in the share capital of at least 10% held for an uninterrupted period of at least one year. For non-resident companies not operating through a PE, a 16% rate is applied for income derived in Romania, such as interest and royalties, or revenues from services, commissions, and revenues from liquidating a Romanian company.

Since Romania implemented the Interest and Royalties Directive, interest and royalties payments made by a Romanian company to another company which is a resident of another EU country, are exempt from tax, provided that the non-resident company held for at least two continuous years at least 25% of the share capital of the Romanian Company prior to the date of the payment.

Social Contributions

Social Contributions are payable by employers and employees for the employees’ salaries. The same is the case when any crypto company hires staff in Romania. Employers must calculate and withhold Social Contributions when paying the salaries, and they declare and pay them to the relevant state budgets by the 25th of the month following the month for which a salary is paid.

Standard rates are as follows:

• Pension insurance contribution – 25%, paid by employees
• Health insurance contribution – 10%, paid by employees
• Labour insurance contribution – 2.25%, paid by employers

EU-wide Tax Rules

The taxation system of Romania is in tune with and constantly being updated according to the standards of the European Union, promising an increase in efficiency, consistency, and transparency relating to taxation. Such directives as the Directive on Administrative Cooperation serve to ensure fairness and efficiency in taxation across member countries.

It enables reporting and information exchange by EU tax authorities on income or revenue realized via cryptoassets by residents within the EU. First, it is in tune with the Markets in Crypto-Assets Regulation (MiCA) and Crypto-Asset Reporting Framework, or CARF, approved recently by the Organization for Economic Cooperation and Development.

Romanian crypto entrepreneurs can be confident that their businesses receive all the opportunities to grow under a modern, fair, and transparent framework of taxation.

How can I pay taxes on crypto in Romania in 2024?

In 2024, taxation of cryptocurrency income remains one of the hottest topics among investors, traders, and everybody who receives income as a result of transactions involving digital assets. Romanian tax law responds to the development of the cryptocurrency market with clear regulations in respect of declaring and paying income received from such assets. Below, a closer look will be taken into how revenues from cryptocurrencies are taxable in Romania.

Qualification of Income Derived from Cryptocurrencies

Cryptocurrency-derived income in Romania can, under the Tax Code, be qualified as “income from other sources.” Consequently, any income arising from trading or investing in cryptocurrencies is subject to taxation and should be declared through a tax return.

Tax Rates

Beginning with 2024, the value of the income for the tax year is taken into consideration for determining the tax rate applicable to income from cryptocurrencies in Romania:

The income that does not exceed 600 lei is tax-exempt.

Between 601 lei and 60,000 lei, the income is subject to a tax of 10%.

Over 60,000 lei, special rules may apply with respect to its taxation.

Declaration Process

Everything has to be properly documented: Records of all cryptocurrency transactions, dates, amounts, and exchange rates of the transactions are required for the proper computation of the base of taxation.

Determination of the Tax Base: The tax base is determined by the difference between the amount of the sale and the amount of the purchase of cryptocurrency. All the expenses related to purchasing and selling cryptocurrency must be considered accordingly.

Filing of the Tax Return: Income from a cryptocurrency transaction needs to be declared in the annual tax return and filed within the deadlines established by the Romanian Tax Service.

Tax Deductions and Facilities

Romanian law on taxation allows some partial deductions and facilities for crypto investors, like the possibility of deducting from the tax base expenses related to acquiring cryptocurrency. On the other hand, to apply such deductions, it is required to precisely document all related expenses.

Taxation of cryptocurrency income is definitely a topic that requires great care regarding documentation and declaration of income in Romania. To this end, it is of the utmost importance to understand the level at which tax rates stand, with the basic rules to avoid any sort of mistake related to taxes, by optimizing your level of tax burden. It is highly recommended to consult a professional tax advisor who can provide you with more detailed information and personal advice, considering the fact that every 1st of January, changes could occur in the tax legislation. It is in this respect that the obligation of taxes on revenues derived from cryptocurrencies, armed with the proper preparation and knowledge, may be efficiently performed without useless complications.

Table of basic tax rates applicable in Romania for the year 2024: Personal income tax rates, corporate income tax rates, value-added tax, and further mentions of a tax on incomes from cryptocurrency.

If you are serious about your success in Romania, optimizing your taxes, then we are here for you. The highly qualified and experienced legal consultants of Regulated United Europe (RUE) will be happy to help. We understand and follow very well all the local and international taxation rules applicable to crypto businesses, doing our best to have our customers not only in compliance with the local regulations but working in a tax-efficient manner. Besides that, we can help you open a new crypto business in Romania with crypto licensing and accounting. Book your personal consultation now.

Also, lawyers of the company Regulated United Europe perform legal support of cryptocurrency projects and assist with adaptation to MICA regulations.