Romania Crypto Tax

In Romania, cryptocurrencies aren’t treated as legal tender and the tax authorities are yet to share detailed guidance on crypto taxation. Currently, crypto activities carried out within or from Romania are taxed in accordance with general taxation rules, which are quite favourable for small and innovative businesses and are harmonised with the EU regulations.

The National Agency for Fiscal Administration of Romania administers taxes across the country. With regard to crypto entrepreneurs, the authority has started to dedicate more resources to monitoring crypto activities and ensuring compliance with national tax legislation. The inspectors regularly verify revenue declarations from such crypto investment activities as trading, mining, and staking. Therefore, you should carefully examine your tax liabilities prior to deciding to engage in crypto-related economic activities in Romania.

Corporate Income Tax

Pursuant to Article 116(1) of Law 227/2015 regarding the Fiscal Code, income sourced from cryptoasset transactions falls under the category of income from derived alternative sources. The standard Corporate Income Tax rate is 16%. The tax year coincides with the calendar year and runs from the 1st of January until the 31st of December. However, taxpayers have the freedom to choose a financial year-end that differs from the calendar year, and a taxation year that coincides with their fiscal year.

The following taxpayers are generally subject to the Corporate Income Tax:

• Romanian businesses
• Non-Romanian businesses that carry out economic activities through one or more Permanent Establishments (PEs) located in Romania
• Non-Romanian businesses that have their place of effective management in Romania
• Businesses established in accordance with European legislation and which have their registered offices in Romania
• Non-Romanian businesses that source income from the transfer of ownership or any other rights related to Romania-based immovable property

However, regardless of the business form, the following crypto activities are normally exempt from tax:

• Purchasing cryptoassets for leu or euros
• Holding cryptoassets
• Transferring cryptoassets between wallets owned by the same person

Small companies can avail of the micro-enterprise regime, which boasts a 1% tax rate. To be eligible for the regime, a Romanian company has to meet the following conditions as of the 31st of December of the previous year:

• The sourced revenues not exceeding 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 the minimum gross salary (except for newly founded companies which have 30 days from the date of registration of the business to fulfil the condition)
• The company isn’t going through the dissolution process, followed by liquidation, registered at the Trade Registry or the courts
• Associates/shareholders holding 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 open to innovation and this is demonstrated through tax incentives which crypto entrepreneurs can also benefit from, provided that their activities meet certain conditions.

Under the Romanian Fiscal Code, profits invested in technological equipment assets used for the following activities are exempt from the Corporate Income Tax:

• Production, processing, and refurbishment activities
• Electronic computers and peripheral equipment
• Cash registers and machinery
• Control and invoicing machinery and devices
• Software produced and/or acquired, including through financial leasing contracts, and used for the implementation of economic activities

Businesses can also benefit from the deduction of 50% of the eligible expenses incurred by their research and development (R&D) activities. Also, accelerated depreciation can be applied to devices and equipment used to carry out R&D activities. This deduction is available to businesses that engage in the activities of applicative research and/or technological development which must be performed in Romania or in an EU/EEA member country.

Value-Added Tax

In Romania, the standard VAT rate is 19% and is levied on the products and services sold in Romania. Depending on the specificities of economic crypto activities, crypto companies may also have to pay VAT. A business should register for VAT within 10 days of the end of the month in which it becomes liable for VAT payments.

If a crypto company is based in another EU country but is selling its products and services to consumers located in Romania, there is a VAT registration threshold of 118,000 RON (approx. 23,957 EUR) per annum. For other foreign businesses, there is no threshold.

Since Romania is part of the EU, for VAT purposes, cryptocurrencies are also treated as fiat money. This was clarified by the Court of Justice of the European Union (CJEU) back in 2015 by stating that Bitcoin transactions are VAT-exempt under the provision concerning transactions relating to currency, banknotes, and coins used as legal tender.

Capital Gains Tax

Romania has no specific Capital Gains Tax, and capital gains received from the transfer of cryptoassets are taxable at a 10% Individual Income Tax when capital gains exceed an annual threshold of 600 RON (approx. 122 EUR). The taxable amount is calculated on the basis of 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

The distribution of dividends between Romanian resident and non-resident companies is taxed at the rate of 8%. The tax is waived if there is a shareholding percentage of at least 10% for an uninterrupted period of at least one year. Non-resident companies not operating through a PE are subject to a 16% rate on income generated in Romania, including interest, royalties, revenue from services, commissions, and revenue generated from the liquidation of a Romanian company.

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

Social Contributions

Social Contributions are paid by employers and employees on salaries of the employees. This also applies to any crypto company employing staff in Romania. Employers are required to calculate and withhold the Social Contributions upon the payment of salaries, as well as declare and pay them to the relevant state budgets by the 25th of the month following the one for which a salary is paid.

The 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 Romanian taxation system is aligned with and is consistently improved in accordance with the EU standards, set to increase taxation efficiency, consistency, and transparency. Crypto businesses operating in Romania should be aware of such directives as the Directive on Administrative Cooperation (DAC) which is designed to ensure fair and efficient taxation across member countries.

It facilitates the reporting and exchange of information between the EU’s tax authorities involving income or revenue generated through cryptoassets by EU residents. It’s aligned with the Markets in Crypto-Assets (MiCA) regulation and the Crypto-Asset Reporting Framework (CARF), recently approved by the Organization for Economic Cooperation and Development (OECD). Therefore, Romanian crypto entrepreneurs can be assured that their businesses are given all the opportunities to grow within a modern, fair, and transparent taxation framework.

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

In 2024, the taxation of cryptocurrency income in Romania remains an important topic for investors, traders and anyone who derives income from transactions with digital assets. Romanian tax legislation is adapting to the development of the cryptocurrency market by providing clear guidelines for declaring and paying taxes on income from such assets. This article will provide a detailed overview of the process of paying taxes on cryptocurrency income in Romania.

Classification of Cryptocurrency Income

Income from cryptocurrencies in Romania can be classified as “income from other sources” under the tax code. This means that all income from trading or investing in cryptocurrencies is taxable and must be declared in a tax return.

Tax rates

In 2024, the tax rate for cryptocurrency income in Romania depends on the amount of income for the tax year:

• Income up to 600 lei is not taxable.
• Income between 601 and 60,000 lei is taxed at 10%.
• For incomes over 60,000 lei, special tax rules apply, which may include a higher tax rate.

Declaration process

1. Record of all transactions: Taxpayers need to keep accurate records of all cryptocurrency transactions, including dates, amounts and exchange rates, in order to properly calculate the tax base.
2. Calculation of the tax base: The tax base is determined as the difference between the amount of sale and the amount of purchase of cryptocurrency. It is important to take into account all expenses related to the purchase and sale of cryptocurrency.
3. Tax filing: Cryptocurrency income must be included in the annual tax return and filed within the relevant deadlines set by the Romanian Tax Service.

Tax Deductions and Benefits

Romanian tax legislation may provide for certain deductions and incentives for cryptocurrency investors, such as the possibility to deduct expenses related to the acquisition of cryptocurrency from the tax base. However, in order to apply such deductions, it is necessary to accurately document all related expenses.

Conclusion

Taxation of cryptocurrency income in Romania requires careful attention to documentation and declaration of income. Understanding the tax rates and rules will help you avoid tax mistakes and optimise your tax burden. It is recommended to contact a qualified tax advisor for up-to-date information and personalised advice, especially considering possible changes in tax legislation. With the right preparation and knowledge, tax obligations on cryptocurrency income can be fulfilled efficiently and without unnecessary complications.

Table with the main tax rates in Romania for 2024. This table includes information on the rates of personal income tax, corporate income tax, value added tax (VAT), and also mentions the tax on cryptocurrency income.

If you’re determined to succeed in Romania and are looking to optimise your taxes, highly qualified and experienced legal consultants of Regulated United Europe (RUE) will be pleased to assist you. We very well understand and closely monitor local and international taxation rules applicable to crypto businesses, and strive to ensure that our clients not only comply with local regulations but also operate in a tax-efficient way. Moreover, we’re more than happy to help you with the formation of a new crypto company in Romania, crypto licensing, and accounting. Book a personalised consultation now.

Also, lawyers from Regulated United Europe provide legal support for crypto projects and help with adaptation to MICA regulations.